Pharma Stocks to BUY, SELL or HOLD: At times like these, when broader equity markets are under pressure, pharmaceutical stocks often emerge as a relatively resilient pocket of the market.
Pharma companies are typically considered defensive bets because healthcare demand remains largely stable regardless of economic cycles. People continue to require medicines and treatments even during periods of volatility, giving the sector more predictable earnings visibility and comparatively lower volatility than cyclical industries.
And 2026 has once again reinforced that trend.
This strength has also been visible across multiple time frames, reflecting sustained investor interest in the sector amid ongoing market uncertainty.
Pharma Sector PerformanceHere’s a look at how Nifty Pharma has performed in recent periods:
| Time Frame | Upside/Downside% |
| 1 Week | -0.24% |
| 1 Month | 9.40% |
| 3 Months | 7.16% |
| 6 Months | 9.35% |
| Since January 1 | 9.14% |
| 1 Year | 15.25% |
| 3 Years | 98.32% |
However, despite the resilient trend and gains seen in the pharma sector, brokerages including Goldman Sachs, Elara Capital, Morgan Stanley and Motilal Oswal have maintained ratings ranging from Neutral to Bullish on pharma stocks such as Sun Pharmaceutical Industries, Torrent Pharmaceuticals, Zydus Lifesciences and Aurobindo Pharma.
The brokerage said the company’s Q4 speciality business grew 20 per cent year-on-year, with Leqselvi and Unloxcyt expected to drive growth in FY27. However, weak pricing in the US generics market remains a key concern.
It added that FY27 earnings estimates were cut by 8 per cent, while FY28 EPS estimates were raised by 43 per cent following the Organon acquisition.
Morgan Stanley noted that Q4 EBITDA came in line with estimates despite this being the first quarter of JB Pharma consolidation. The India business grew 15 per cent, while semaglutide captured a 38 per cent share of the generic market.
The brokerage said Q4 EBITDA beat estimates by 14.5 per cent despite higher R&D spending.
It also highlighted that US revenues stood at USD 323 million, while domestic formulations and consumer wellness revenues rose 13.9 per cent and 61 per cent year-on-year, respectively.
Additionally, management expects revenue growth in the high teens for FY27, with EBITDA margins above 24 per cent.
The brokerage said the quarter remained broadly in line, supported by the company’s highest gross margin in nine years.
Strong performance in Europe offset weakness in US sales, while future growth is expected to be driven by the US product pipeline, expansion in Europe, and the biologics business.
Motilal Oswal expects revenue, EBITDA and PAT to grow at a CAGR of 15 per cent, 16 per cent and 22 per cent, respectively, over FY26–FY28.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
