The Indian pharma industry has produced robust growth led by domestic demand, R&D growth, and exports to the rest of the world. For thematic investors looking to invest in healthcare innovation and defensive stock traits, pharma-sector mutual funds can provide a desirable mix of growth and stability. Looking ahead to 2025, the following seven direct-growth funds are recommended for their excellent 3-year annualized returns and therefore form part of a diversified equity portfolio.
7 Best Pharma Sector Mutual Funds for 2025
| Rank | Fund Name | 3-Yr Annualized Return |
|---|---|---|
| 1 | SBI Healthcare Opportunities Fund – Direct Plan – Growth | 24.85% |
| 2 | ICICI Prudential Pharma Healthcare & Diagnostics (P.H.D.) Fund – Direct – Growth | 24.44% |
| 3 | DSP Healthcare Fund – Direct – Growth | 22.95% |
| 4 | Tata India Pharma & Healthcare Fund – Direct – Growth | 21.97% |
| 5 | UTI Healthcare Fund – Direct – Growth | 20.99% |
| 6 | ITI Pharma & Healthcare Fund – Direct – Growth | 20.29% |
| 7 | Nippon India Pharma Fund – Direct – Growth | 19.85% |
| 8 | Aditya Birla Sun Life Pharma & Healthcare Fund – Direct – Growth | 19.44% |
| 9 | Mirae Asset Healthcare Fund – Direct – Growth | 19.36% |
| 10 | LIC MF Healthcare Fund – Direct – Growth | 18.78% |
Conclusion
Pharma industry funds provide a good avenue to tap into India’s health care growth story. SBI Healthcare Opportunities Fund and ICICI Prudential P.H.D. Fund take the top spots with over 24% returns on an annualized basis, followed by other top ones such as DSP Healthcare and Tata India Pharma, which also give good returns of more than 21%. Spread your investment across these funds according to your risk tolerance and horizon, and use systematic plans (SIPs) to leverage rupee-cost averaging and long-term compounding advantage.
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