Lupin, Biocon, Sun Pharma, Dr Reddy's Shares; Why Indian Pharma Stocks Are Unfazed By 200% Tariff Threat?

The majority of pharma stocks are unfazed by US President Donald Trump's 200% tariff threat on pharmaceutical products. On July 9, even when the 90-day pause of Liberation Day ended, Nifty Pharma jumped by over 101 points before correcting. Currently, the index is marginally up. Stocks like Mankind Pharma, Lupin, Biocon, and Cipla surged, but Sun Pharma and Dr Reddy's Lab shares emerged among the top bears.

Pharma Stocks:

Nifty Pharma traded at 22,203.60, higher by 37.70 points, or 0.17%, at the time of writing. The index touched an intraday high of 22,267.20.

Stocks like Mankind Pharma emerged as top bull with a 3.53% surge, followed by Natco Pharma and Biocon, which gained 3.51% and 2.25%. Stocks like Laurus Labs, Abbott India, Lupin and Ajanta Pharma advanced by 1% to 2%.

Also, Alkem, Granules and Cipla traded higher.

Among the top bears were Zydus Life, IPCA Lab, Glenmark, Dr Reddy's Lab and Sun Pharma that plunged by 0.5% to 1%. Stocks like Gland Pharma, JB Chemicals, and Aurobindo Pharma were in red with marginal downside.

Why Pharma Stocks Are Unaffected by Trump's Tariff Threat

As per an expert, investors are not taking Trump's 200% tariff threat seriously because the US President has a record of changing his announcements.

"A significant takeaway from the recent global market trends is that the markets are largely ignoring the noise from the tariff front and are waiting for clarity to emerge. President Trump's latest declarations of 50% tariffs on copper imports, 10% tariffs for just being in BRICS, no further extension of the August 1st deadline and a potential 200 % tariffs on pharmaceutical imports with a grace period of one year ...are all not taken seriously by the markets since Trump has a track record of chickening out and changing his announcements," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Another key reason that is curbing the shock of a 200% tariff in pharma stocks is the Q1FY26 expectation. As per the expert, pharma companies are likely to record another steady quarter.

Analysts in Kotak Institutional Equities in their Q1 preview report said, "We expect a steady sales and margin performance in 1QFY26 for our pharma and hospitals coverage. For pharma companies, we expect continued traction across most markets to drive ~11%/~11% yoy growth in overall sales/EBITDA in 1QFY26, with sluggish domestic growth in April and March being the only chagrin. We also bake in a healthy ~17%/~17% yoy growth in overall hospitals sales and EBITDA, led by higher footfalls in existing beds, new bed additions and a slight ARPOB increase. In diagnostics, we expect volume traction, mix improvement and M&A to drive ~14% yoy overall sales growth for our coverage. While we like SUNP, CIPLA, LPC, EMCURE, Syngene and PPL in Pharma, within Health Care Services, APHS and DLPL are our preferred picks."

Trump's 200% Tariff?

During a cabinet meeting on July 8, Trump told his administration that, "We're going to give people about a year, a year and a half to come in, and after that, they're going to be tariffed. They're going to be tariffed at a very, very high rate, like 200%."

Simply put, Trump is giving about a 1-year time period for foreign pharma companies to shift their manufacturing units in the U.S. Or else, tariff on imported pharma and healthcare products could reach to 200%.

As of now, pharmaceuticals are exempted from his Liberation Day tariffs. As per data, in 2024, US' pharmaceuticals import stood at around $212 billion, making it the country's fifth most imported product.