Aurobindo, Sun Pharma, other pharma stocks in focus after 90-day Trump tariff pause

Pharma stocks such as Sun Pharma, Aurobindo Pharma, Dr Reddy's Lab, Cipla, Gland Pharma, Zydus Lifesciences and Lupin would be in action on Friday after the US President Donald Trump halted tariffs imposed on most nations for 90 days, sending Wall Street indices soaring up to 12 per cent overnight. The move is seen cheering domestic pharma counters, which had witnessed selling pressure recently, after the US President warned of "never seen before" tariffs soon on drugs entering the US.   

The domestic stock exchanges BSE and NSE were shut on Thursday on account of Shri Mahavir Jayanti. The trading will resume on Friday.     

The pharma basket was initially exempted from 'Liberation Day' tariffs, as per the White House's fact sheet. But Trump's tariff warning intensified fears around increase in prices for the generic medicines in the US, supply chain disruptions, drug shortages and rationalisation in low-margin products. 

Aurobindo Pharma and Gland Pharma have fallen 9 per cent each in the past one week and 22-23 per cent in 2025 so far. Glenmark Pharma is down 9 per cent for the week month period and 14 per cent year-to-date. Sun Pharma has fallen 3.63 per cent in the past one week; Zydus Lifesciences has declined 5.23 per cent, Dr Reddy's Labs 4.75 per cent, Lupin 4.38 per cent and Cipla 2.75 per cent, respectively. 

HSBC Research in a note said Services and pharma products are exempt, at least so far, from the tariffs and this limits the impact on earnings. Any progress on the ongoing bilateral trade discussions would be a positive, it said in a strategy note. 

Ahead of the broader US tariff relief, Elara Securities had said that it does not rule out the possibility of exempting specific drug categories that could relatively benefit  India’s companies. It had noted that it was possible that “generic drug formulations” could be exempted while patented drugs and chemical substances used for making drug formulations could be tariffed. 

"It will have limited impact on India’s generic firms, which to a large extent export generic formulations (finished dosage forms) to the US," the brokerage had suggested.

HDFC Securities said earlier assumed multiple scenarios for tariff pass-on such as 100 per cent tariff to be borne by Indian pharma companies, which will have a negative impact of 3-45 per cent on FY27 Ebitda across pharma companies. The impact, it said, would be higher for companies such as Aurobindo, Dr Reddy’s, Lupin, Sun Pharma, and Zydus Life. 

A 50 per cent tariff to be borne by Indian pharma may lead to 2-22 per cent impact on FY27E Ebitda, the brokerage had said.