Pharma index surged over 4 per cent in early trade on Thursday after US President Donald Trump’s administration exempted pharmaceutical products from reciprocal tariffs. Market and industry experts see this as positive sign for Indian pharma companies.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, highlighted that the segment is likely to witness buying due to exemption. Citi also cited that it is unclear whether the exemption is a short-term or medium-term arrangement.
Brokerages 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.
BNP Paribas analysts see a 1-2 per cent adverse impact on FY27E EBITDA assuming a baseline 10 per cent tariff cost, with Aurobindo Pharma, Zydus and Dr Reddy’s seeing the highest impact. Divi’s is likely to be the least impacted, they added. BNP Paribas continues to prefer Torrent Pharma and JB Chemicals & Pharmaceuticals in the sector.
Nifty Pharma and healthcare ended in the positive territory, while the broader index ended with modest loses.
Nifty pharma gained 2.25 per cent to close at 21,423.55 and Nifty healthcare index settled with 1.98 per cent gain at 13,849.50.
Sun Pharmaceuticals led the gainers of Nifty 50 components to end 3.41 per cent positive at ₹1,772. The stock soared 6 per cent from the previous close to hit a high of ₹1,812.70.
Cipla shares followed with 3.28 per cent increase to end at ₹1,500, after hitting a high of ₹1,523.30.
Dr Reddy’s Laboratories stock jumped 7 per cent before settling flat at ₹1,151.80.
All pharma stocks ended in green, Ipca Laboratories led with 4.59 per cent surge, Lupin followed with 4.19 per cent increase, Natco Pharma with a 4.06 per cent uptick and Gland Pharma with 1.23 per cent gain.
Aurobindo Pharma rose 1.51 per cent to end at ₹1,175.35 and Divi’s Laboratories were up 1.73 per cent to ₹5,764.