According to Bernstein's latest analysis, India's pharmaceutical industry is entering a new phase where innovation, rather than traditional generic drugs alone, could become the biggest driver of growth over the next decade. As per CNBC TV18, Nandan Kulkarni, Director–India Healthcare & Senior Research Analyst at Bernstein, emphasized that "innovation is going to be an important pivot that is going to drive this industry leapfrog." The brokerage has initiated coverage on India's healthcare sector with a positive stance, citing strong long-term growth opportunities driven by innovation, expanding healthcare access, and the adoption of artificial intelligence across the pharmaceutical value chain. Among its preferred names, Zydus Lifesciences emerged as Bernstein's top pick with a price target of ₹1,457, implying a 34% upside from Monday's closing price of ₹1,087.6.
Among its preferred names, Zydus Lifesciences emerged as Bernstein's top pick with a price target of ₹1,457, implying a 34% upside from Monday's closing price of ₹1,087.6. As reported by CNBC TV18, the brokerage also assigned 'Outperform' ratings to Lupin and Sun Pharma with targets of ₹2,707 and ₹2,235 respectively, implying potential upsides of 20% and 25% respectively from their closing price on Monday. Aurobindo Pharma received a 'Market Perform' rating with a target price of ₹1,498, indicating a modest 3% upside from Monday's close of ₹1,451.8.
The China-plus-one strategy, which encourages global companies to diversify supply chains away from China, also creates fresh opportunities for Indian firms. According to Bernstein's analysis, demand for complex products and newer drug modalities is also increasing, strengthening India's position in global pharmaceutical manufacturing. The brokerage expects Indian pharmaceutical companies to build the world's largest network of future-ready manufacturing facilities over the next decade, with the adoption of generative AI across research and development and operations could drive nearly 70% of the sector's AI-led profitability gains. These opportunities could add $70 billion to $75 billion to the industry's size over the next decade, helping the Indian biopharma market expand fourfold to nearly $195 billion.
The boardroom narratives are finally and systematically shifting from pure generic copies to a structured innovation bet, according to Bernstein's analysis. This shift is visible not only among large pharmaceutical companies but also across several mid-sized and smaller firms that are investing in specialty therapies, orphan drugs, biosimilars and licensing opportunities. Recent success stories such as licensing deals and new drug discoveries have strengthened confidence in India's innovation capabilities. However, while Bernstein remains positive on the sector overall, it has a more cautious view on Biocon and Mankind Pharma. In Biocon's case, the key challenge is execution, as the company has invested heavily in research and development but investors are still waiting for those investments to translate into stronger commercial outcomes.
Among the sector's large-cap names, Bernstein is also optimistic about Sun Pharma's acquisition of Organon. As reported by CNBC TV18, Kulkarni said the deal combines complementary portfolios, strong market positions and innovation capabilities. He expects the combination to create meaningful synergies and generate stronger cash flows over time. For Mankind Pharma, the concern is more strategic, as Kulkarni believes that a continued focus on domestic acute and chronic therapies could limit exposure to larger innovation opportunities emerging in the US and European markets. The brokerage expects innovation in niche therapies and complex specialty medicines to drive a meaningful acceleration in revenue growth for Indian drugmakers, resulting in a sustained expansion in earnings over the coming decade.
