Pharma remains a steady compounder, but 2026 offers a stronger base for expansion. Before moving into specific themes, it helps to understand the drivers shaping this outlook.

  • Improving US generics pricing: Companies benefit from fewer price cuts, rising approvals, and supply normalisation. This supports margin improvement for firms with large US portfolios.

  • Growth in complex therapies: Businesses expanding into biologics, injectables, and specialty drugs are expected to lead sector performance as demand rises globally.

  • Strong domestic healthcare spending: India’s pharma market continues to grow through chronic therapies, diagnostics, and wellness categories, providing stable revenue streams.

Top Pharma Mutual Funds for 2026

Before investing evaluate pharma stocks, remember that sectoral funds carry concentration risk but work well for thematic positioning.

1. SBI Healthcare Opportunities Fund

This scheme invests across pharma, hospitals, diagnostics, and global healthcare themes.
It follows a bottom-up approach focused on companies with strong earnings visibility.
The fund has delivered long-term stability and works well for investors seeking balanced healthcare exposure.

2. Nippon India Pharma Fund

One of the oldest and most consistent pharma funds in India.
It focuses heavily on domestic formulation leaders and companies with strong product pipelines. The strategy leans toward steady compounders, making it suitable for long-term thematic allocation.

3. Tata India Pharma & Healthcare Fund

This fund combines pharma, biotech, and healthcare services in one basket.
It targets businesses showing scalable growth, better margins, and strong clinical pipelines.
The portfolio includes both large players and emerging innovators.

4. UTI Healthcare Fund

A diversified healthcare fund investing in pharma, wellness, hospitals, and medical devices.
It prefers companies with stable cash flows and strong competitive positioning.
The fund aims to balance safety with moderate growth potential.

5. ICICI Prudential Pharma Healthcare & Diagnostics Fund

This scheme spans pharmaceuticals, hospitals, diagnostics, and allied healthcare services.
It focuses on companies with structural growth, strong balance sheets, and global expansion plans. The fund is suitable for investors who want wider exposure beyond only pharma stocks.

6. Aditya Birla Sun Life Pharma & Healthcare Fund

The fund invests in companies with predictable revenue, strong product demand, and growing market share. Its portfolio includes domestic leaders and global-focused players.
It works well for investors seeking steady growth within the healthcare ecosystem.

7. Kotak Healthcare Fund

This fund invests across healthcare themes, including pharma, diagnostics, and medical devices. It uses a disciplined valuation framework to filter companies with durable business models. The portfolio maintains a balance between growth and stability.

8. HDFC Healthcare Fund

This scheme focuses on high-quality companies with sustainable earnings and strong governance. It emphasizes stability by investing in large and mid-sized healthcare businesses. The fund is suitable for conservative investors wanting long-term exposure.

9. Axis Healthcare Fund

This fund is selective, focusing on innovation-led businesses with improved financial strength. It includes companies expanding into specialty drugs, wellness, and diagnostics. The approach works well for investors looking for a targeted healthcare strategy.

10. Quant Healthcare Fund

Uses a data-driven, momentum-oriented investment model across healthcare segments.
The fund actively rotates into high-performing pharma and diagnostics stocks. Its flexible, tactical style makes it suitable for investors comfortable with dynamic portfolio changes.