New Delhi, Jan. 14 -- Analysts see several growth catalysts across key markets and product categories (inhalers, biosimilars, complex injectables) playing out over the next 2-3 years for Indian pharma companies. "The investments made over the last few years leave them well placed to capitalise on these opportunities. With cost bases pruned and operating leverage benefits, the sector is poised to grow at ~21% earnings CAGR and witness ROCE improvement of 430bps to 15% over FY20- 23e. This, coupled with strong balance sheets (near debt-free), should support valuations, in our view," says a report by HDFC Securities.

BSE HC Index has outperformed Nifty by around 47% in the past one year and trades at 29x 1-yr forward, 30% above its historic...