Pharma Stocks in Focus as US Halts Tariffs for 90 Days
Pharma stocks like Sun Pharma, Aurobindo, DRL may rally as US suspends tariffs for 90 days, easing pressure on Indian exporters.
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Indian pharmaceutical stocks are expected to be in focus on Friday following a 90-day suspension of tariffs by the US administration. Wall Street benchmarks surged up to 12 per cent overnight after President Donald Trump paused the trade levies, potentially easing recent concerns for drug exporters.
Trading activity on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) remained closed Thursday due to Shri Mahavir Jayanti. Markets are scheduled to reopen on Friday.
Pharma counters, including Aurobindo Pharma, Sun Pharma, Dr Reddy’s Laboratories (DRL), Lupin, Gland Pharma, Glenmark Pharmaceuticals, Cipla, and Zydus Lifesciences, are likely to see investor interest. The 90-day reprieve follows heightened volatility in recent sessions triggered by Trump’s earlier statement threatening unprecedented tariffs on drug imports into the US.
Pharmaceutical firms had come under pressure amid fears of rising prices, disrupted supplies, and the potential withdrawal of low-margin generics from the US market. Although pharma goods were initially excluded from the "Liberation Day" tariffs, the rhetoric from the US administration raised investor caution.
Price data shows Aurobindo Pharma and Gland Pharma have each declined by around 9 per cent over the past week, and by 22-23 per cent year-to-date. Glenmark shares have fallen 9 percent in the same weekly period and are down 14 percent in 2025 so far. Sun Pharma share has slipped 3.63 per cent in the last week, Zydus Lifesciences is down 5.23 per cent, DRL share price has dropped 4.75 per cent, Lupin share has seen a 4.38 per cent decline, and Cipla has retreated 2.75 per cent.
HSBC Research noted in its commentary that services and pharmaceutical products are currently outside the scope of the new tariff measures, suggesting limited near-term earnings disruption for Indian pharma companies. It added that favorable developments in bilateral trade negotiations could support the sector.
Elara Securities previously indicated the possibility of category-based exemptions within pharma, such as exclusions for generic formulations. It suggested that Indian exporters focused on finished dosage forms may face minimal downside, even if tariffs are applied to patented medications or raw chemical substances.
In an earlier report, HDFC Securities modeled several outcomes, including scenarios where 100 percent of the tariff burden falls on Indian companies. Under such a case, the brokerage forecast a potential 3-45 percent reduction in FY27 EBITDA across major pharma firms. It said companies like Aurobindo, DRL, Lupin, Sun Pharma, and Zydus Life could be the most affected.
A scenario where only half the tariff cost is absorbed by Indian exporters could still cause a 2-22 per cent dent in FY27E EBITDA, the firm projected.
