Share of pharma companies saw red on February 14 as caution over the possibility of US tariffs hitting the sector spread across the Street. This came after US President Donald Trump told reporters Thursday he would also levy tariffs on foreign cars, semiconductors and pharmaceuticals in addition to his plans of imposing reciprocal tariffs.
Caught amidst tariff concerns shares of India's prominent drugmakers--Dr Reddy's Laboratories, Sun Pharma, Lupin, Cipla, Zydus Life and Aurobindo Pharma--slipped 1-4 percent. These companies have a relatively high exposure to the US drug market and higher tariffs on imports threaten to squeeze their margin and eat away pricing competitiveness.
Other drugmakers like Granules India, Natco Pharma, Laurus Labs, Glenmark, Mankind Pharma, Biocon and Divi's Labs also shed 2-9 percent, weighing on the broader pharma index. As a result, the Nifty Pharma index tanked around 3 percent to emerge as the worst performing sector in trade today.
| Company | CMP | Chg(%) | Volume |
|---|---|---|---|
| Laurus Labs | 547.30 | -8.94 | 6.34m |
| Natco Pharma | 891.85 | -8.53 | 7.55m |
| Granules India | 511.65 | -5.64 | 1.15m |
| Glenmark | 1,333.05 | -5.54 | 1.31m |
| Lupin | 1,964.05 | -4.44 | 1.25m |
| Zydus Life | 904.15 | -4.1 | 887.10k |
| Mankind Pharma | 2,399.60 | -4.06 | 754.11k |
| Aurobindo Pharm | 1,136.40 | -3.69 | 1.09m |
| Biocon | 349.55 | -2.71 | 2.56m |
| Divis Labs | 5,852.00 | -2.64 | 239.62k |
| Sun Pharma | 1,705.05 | -2.36 | 1.46m |
| Dr Reddys Labs | 1,197.25 | -2.15 | 907.44k |
| Torrent Pharma | 3,020.35 | -1.75 | 264.44k |
| Alkem Lab | 4,649.85 | -1.48 | 194.61k |
| Ipca Labs | 1,470.00 | -1.4 | 1.11m |
| Abbott India | 27,970.40 | -1.37 | 8.39k |
| Gland | 1,463.00 | -0.89 | 60.41k |
| Cipla | 1,460.10 | -0.82 | 1.33m |
| JB Chemicals | 1,679.50 | -0.25 | 103.22k |
If Trump were to impose tariffs on pharmaceutical imports to the US, it could deal a significant blow to Indian drugmakers. The added costs would make exporting drugs to the US more expensive, potentially squeezing profit margins for major Indian pharmaceutical companies like Sun Pharma, Dr Reddy’s, and Cipla, all of which have substantial exposure in the US generics market.
Additionally, such tariffs could weaken the competitive edge of Indian drugmakers in the US. These companies rely on cost efficiency to compete with domestic US manufacturers, but higher tariffs could drive up prices, making Indian medicines less attractive and diminishing their market share.
Aside from tariff concerns, a slew of weak quarterly earnings from names like Natco Pharma, Granules India, Biocon and others, have also dampened sentiment for the sector.
Last month, Trump also froze foreign aid funding for HIV medicines to Africa, giving another blow to Indian drugmakers supplying antiretroviral (ARV) medications.
He halted all US foreign assistance—except for Israel and Egypt—for at least 90 days to reassess existing programs. This includes the President's Emergency Plan for AIDS Relief (PEPFAR), which provides ARVs to around 50 countries, half of them in Africa. According to US think tank Brookings, HIV-related spending accounted for 44 percent of total US global health funding in FY24, making the freeze a significant setback for global HIV treatment efforts.
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