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MUSTAFAH KK

Pharma stocks crashed 6 per cent on after US President Donald Trump reportedly threatened tariffs on pharma products at “levels never seen before.”

Nifty Pharma index traded 4.34 per cent lower at 20,492.95, after hitting a low of 20,089.45. While all constituents of the index traded in negative territory, shares of Laurus Labs, Ipca Laboratories, Lupin, Granules India, Cipla,Dr Reddy’s Laboratories and Gland Pharma plunged 6-7 per cent as at 11.20 am.

This comes just after the drugmakers showed resilience dodging the bullet on April 3 after Trump’s reciprocal tariff exemption. Industry and market experts flagged the need to reduce US dependence amid the opinion whether the exemption is a short-term or medium-term arrangement.

BNP Paribas analysts observed a 1-2 per cent adverse impact on FY27 EBITDA estimates assuming a baseline 10 per cent tariff cost, with Aurobindo Pharma, Zydus and Dr Reddy’s seeing the highest impact.

Brokerages such as CLSA and Citi pointed out that Aurobindo Pharma (48 per cent), Zydus (47 per cent), and Dr Reddy’s (46 per cent) have higher revenue mix from the US.

Nuvama Institutional Equities pointed out that pharma stocks with high exposure to the US pharma market clocked a 10–15 per cent decrease in the calendar year 2025 so far.

However, Nuvama favours the sector as the valuations remain attractive and potential earnings challenges in other sectors. The brokerage preferred Lupin, Divi’s Laboratories, Torrent Pharma, Aurobindo and Dr Reddy’s among large-cap and Ajanta Pharma, Ipca, and Jubilant Pharmova in the mid-cap space. It has maintained hold ratings on Cipla, Sun Pharma and Biocon.

Shares of Cipla fell 5.55 per cent to ₹1,412.75 and Dr Reddy’s Laboraroties depreciated 4.29 per cent to ₹1,102.05 as at 11.36am,

Laurus Labs tumbled 6.80 per cent to ₹578.45.

Ipca Laboratories sank 6.66 per cent to ₹1,397.85 and Aurobindo Pharma traded 5.56 per cent lower at ₹1,110.90 after hitting a low of ₹1,050.10.

Published on April 4, 2025