The present invention is related to a process of preparing a stable pharmaceutical composition of phytonadione comprising the steps of a preparing dispersion of phytonadione in a pharmaceutically acceptable binder spraying/mixing the dispersion on pharmaceutically acceptable excipients and finally, formulating the composition into a pharmaceutically administrable dosage form. The present invention further relates to preparation of stable pharmaceutical composition of phytonadione which exhibits an improved bioavailability in comparison to marketed pharmaceutical composition of phytonadione. Moreover, the present invention relates to phytonadione pharmaceutical composition which remains stable as per ICH guidelines.