Best CDMO Stocks in India to Ride the Global Pharma Outsourcing Wave

Introduction: Best CDMO Stocks in India to Watch in 2025

India is fast emerging as a global hub for pharmaceutical outsourcing, and the best CDMO stocks in India are drawing strong investor interest.

CDMOs—Contract Development and Manufacturing Organisations—help pharma and biotech companies by managing everything from drug development to large-scale production. With more global drugmakers outsourcing R&D and manufacturing to reduce costs, India is gaining prominence due to its cost advantage, regulatory standards, and technical talent.

The global CDMO market is expected to double from US$ 160 billion to over US$ 380 billion by 2033. Indian CDMO companies are well-positioned to capture this opportunity, thanks to expanding infrastructure, strategic partnerships, and rising trust from global pharma clients.

In this article, we explain what a CDMO is, why it matters, and what’s driving the growth of India’s pharma outsourcing sector. Most importantly, we highlight the best CDMO stocks in India to keep an eye on in 2025.

What is a CDMO and Why It’s Important

A CDMO, or Contract Development and Manufacturing Organisation, provides end-to-end services to pharma and biotech firms. These services include drug research, development, manufacturing, and packaging.

Instead of doing everything in-house, pharma companies outsource to CDMOs. This helps them save time, reduce costs, and focus on drug discovery. In today’s competitive world, speed and efficiency are critical in launching new medicines.

That’s where CDMOs play a crucial role. They enable faster time-to-market and ensure regulatory compliance at every step.

Moreover, India has emerged as a preferred CDMO hub. It offers lower costs, skilled talent, and globally approved facilities. As a result, many global drugmakers now rely on Indian firms for both development and manufacturing.

Because of this trend, some of the best CDMO stocks in India are drawing strong interest from long-term investors.

In short, CDMOs are helping transform the global pharma landscape—and India is right at the centre of it.

Future Opportunities in India’s CDMO Industry

India’s CDMO market is booming, expected to grow from US$15.63 billion in 2023 to US$44.63 billion by 2029 (CAGR ~14.7%). BCG forecasts India will capture 4-5% of the global CDMO market by 2025, strengthening its position as a preferred pharma outsourcing hub.

Competitive Edge Over China

India offers pharma services about 20% cheaper than China, with 650 USFDA-approved plants, 25% of global approvals outside the U.S. RFPs to Indian CDMOs jumped 50% in 2024 as companies diversify supply chains.

Emerging Drug Modalities

India focuses on advanced therapies with high growth:

• Cell and gene therapy (CAGR 45%)
• Antibody-drug conjugates (CAGR 25%)
• Nucleic acid therapeutics (CAGR 36%)

Global CDMO market was US$242.6 billion in 2024, projected to reach US$465.1 billion by 2032.

Market Forecast (2023–28, US$ Billion)

Country	2023	2028	CAGR
USA	54.21	68.32	4.7%
China	27.12	42.94	9.6%
India	15.63	26.73*	14.7%

*India projected to hit US$44.63 billion by 2029.

Key Investments

• Aurigene: Biologics facility, Hyderabad (2024)
• Aragen Life Sciences: INR 20B (~US$230M) Telangana expansion
• Divi’s Labs: Large-scale manufacturing, Andhra Pradesh (2025)
• Laurus Labs: INR 9.9B (~US$114M) pivot to antiretrovirals
• Jubilant Pharmova: US$370M sterile injectables expansion (North America)

Government & FDI Support

India’s pharmaceutical sector has witnessed a surge in private equity activity, with major players making significant investments. Notably, Advent International acquired a stake in Suven Pharma for US$1.09 billion, while Goldman Sachs invested US$277 million in Aragen. Supporting this momentum, the government’s Production-Linked Incentive (PLI) schemes, amounting to INR 219.4 billion (approximately US$2.5 billion), have provided a strong policy push to enhance domestic manufacturing of drugs and active pharmaceutical ingredients (APIs). Reflecting sustained investor confidence, the sector has attracted a cumulative foreign direct investment (FDI) inflow of US$23.48 billion between 2000 and 2024.

Recent Innovations by Indian CDMO Companies

Aurigene Pharmaceutical Services launched a state-of-the-art biologics facility in Hyderabad’s Genome Valley in mid-2024. It manufactures therapeutic proteins, antibodies, and viral vectors, providing integrated clinical to commercial services.

Aragen Life Sciences is investing INR 20 billion (~US$230 million) in Telangana to expand capabilities across drug discovery, development, and manufacturing. Their focus includes advanced biologics and small molecules.

Divi’s Laboratories is developing a large-scale multi-unit manufacturing complex in Kakinada, Andhra Pradesh. Phase I (200 acres) started commercial operations in January 2025, specializing in custom synthesis and intermediates.

Laurus Labs is expanding with INR 9.9 billion (~US$114 million) towards antiretrovirals and intermediates, shifting focus from APIs. Their revenue heavily relies on US and European markets.

Jubilant Pharmova committed US$370 million to double sterile injectable capacity in North America, expanding in Spokane and Montreal to strengthen their global presence.

Additional Developments:

• Several Indian CDMOs are adopting cutting-edge technologies like continuous manufacturing and single-use bioreactors for biologics.
• Enhanced focus on regulatory compliance and quality systems to meet stringent USFDA and EMA standards.
• Increasing partnerships with global pharma companies for complex modalities including cell and gene therapies.

Best CDMO Stocks in India

Macquarie initiated coverage on four Indian CDMO stocks — Divis Laboratories Ltd, Suven Pharma Ltd, Blue Jet Healthcare Ltd, and Syngene International Ltd — assigning them ‘Outperform’ ratings. The brokerage expects the sector to grow at a high-teens CAGR, supported by regulatory tailwinds like the US Biosecure Act, with the industry projected to reach $22 billion by 2030.

Indian CDMOs currently trade at an average 2-year forward EV/EBITDA multiple of 20x, compared to 16x for regional peers and 15x for global players. Macquarie justifies this premium valuation, projecting up to 2x EBITDA growth and twice the Return on Invested Capital (ROIC) over the next three years.

Divis Laboratories Ltd

Divis Laboratories stands out as a product-led CDMO, focusing on advanced technologies such as antibody-drug conjugates (ADCs), peptides, and oligonucleotides. Macquarie expects Divis to deliver a top-line CAGR of 20-25% and forecasts a target price of ₹7,400, indicating significant upside potential.

Suven Pharma Ltd

Suven Pharma also leads with product-driven innovation in complex drug modalities. It is expected to see robust revenue growth, similar to Divis, with a target price of ₹1,500. Suven’s focus on high-value therapies aligns well with growing global demand.

Blue Jet Healthcare Ltd

Blue Jet Healthcare benefits from the expanding CDMO sector with its strategic investments and service offerings. Macquarie assigns it a target price of ₹1,000, projecting strong growth prospects aligned with sector momentum.

Syngene International Ltd

Syngene International is more service-led and is expected to grow at a mid-teens CAGR. Despite a slower growth rate compared to product-led peers, Syngene remains a key player with a target price of ₹835.

Macquarie forecasts a 1,000 basis point improvement in EBITDA margins and a 1.5-2x increase in ROIC for these companies by FY2030. Over the last two years, these firms have expanded their asset base by a median 42%, temporarily impacting profitability but setting the stage for long-term gains.

India’s cost competitiveness, regulatory compliance, and expertise in APIs, highly potent APIs (HPAPIs), and specialty chemicals position it as a preferred global hub for small molecule development.

Conclusion

India’s CDMO industry is no longer just an outsourcing alternative — it is fast becoming a global force in pharmaceutical innovation and manufacturing. Backed by robust policy support, deep scientific talent, cost efficiencies, and strategic investments, Indian CDMOs are moving beyond traditional generics into complex biologics, ADCs, and nucleic acid therapies. Global confidence is rising, as seen in accelerating foreign investments and bullish brokerage coverage from firms like Macquarie.

With high-growth forecasts, expanding global market share, and leadership in emerging drug modalities, India is poised to challenge global CDMO giants. For investors, this presents a compelling long-term opportunity. As India cements its status as a preferred partner in drug development, the best CDMO stocks in India could deliver substantial value — both to patients worldwide and to savvy investors tracking this transformation.

Invest in the Best CDMO Stocks in India with confidence — start your journey on Angel One today!

FAQs: Best CDMO Stocks in India

What are the best CDMO stocks in India for 2025?
Top picks include Divis Laboratories, Suven Pharma, Syngene International, and Blue Jet Healthcare.

Why are CDMO stocks in India gaining attention?
Global pharma firms are shifting supply chains to India due to cost-efficiency and regulatory strengths.

Is Divis Labs considered one of the best CDMO stocks in India?
Yes, Divis Labs is a leader in API manufacturing and has strong future growth projections.

How is the US Biosecure Act impacting CDMO stocks in India?
It’s prompting pharma firms to diversify away from China, boosting demand for Indian CDMOs.

Are CDMO stocks in India good for long-term investment?
Yes, with rising global contracts and innovation in biologics, these stocks have strong long-term potential.

What makes Suven Pharma a top CDMO pick?
Suven focuses on high-growth areas like ADCs and peptides, with strong margins and global exposure.

What is the forecast for India’s CDMO market?
India’s CDMO market could grow from $15.6 billion in 2023 to over $44 billion by 2029.

Are Indian CDMO stocks overvalued compared to global peers?
They trade at a premium, but analysts say it’s justified due to superior growth and returns.

What are some challenges facing CDMO stocks in India?
India still needs to scale biologics infrastructure and ensure quality consistency at scale.

How do I choose the best CDMO stocks in India to invest in?
Look for companies with strong R&D, global client base, and strategic government support.

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