Cipla, Sun Pharma, Lupin, Aurobindo Pharma Down As Trump Warns Of Tariffs In The Future

Nifty Pharma fell nearly 5% on Friday, the most since June 4, after US President Donald Trump said that there will be tariffs on the segment in the future. The index nearly gave up Thursday's gains of 4.98%.

While speaking to reporters on the Air Force One, Trump said that the sector will see tariffs at levels that weren't seen before. The US is looking at pharma as a separate category and the tariffs for the sector will be announced soon as they are currently under review, he added.

The decline comes after Nifty Pharma on Thursday hit one-month high, driven by relief across the sector as it was excluded from tariffs. Pharmaceuticals remain a cornerstone of the India-US bilateral trade ties as we ensure a steady supply of affordable medicines, said Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance.

However, with Trump's new move, investors grow cautious of the segment.

The decline was led by Aurobindo Pharma Ltd., Laurus Lab Ltd., Lupin Ltd., Zydus Lifesciences Ltd. and Granules Ltd. While Aurobindo Pharma fell 10%, Laurus Lab was down 9.06%.

Zydus Lifesciences and Granules were down over 7%. IPCA Laboratory Ltd., and Lupin were down over 8%. Biocon Ltd., Cipla Ltd., Divi's Laboratories Ltd., Dr. Reddy's Laboratories Ltd. and Sun Pharmaceuticals Ltd. fell over 6%.

Others firms, like Mankind Pharma Ltd., Glenmark Pharmaceuticals Ltd. and Gland Pharma Ltd. were also trading lower on Friday.

Citi, earlier this month, had indicated a lower probability to the scenario of the US imposing tariffs on Indian pharmaceuticals. Companies with lower exposure to US generics, including Torrent Pharma, Sun Pharma, and Divi's Laboratories, would be the least affected, with an estimated 1-3% hit to Ebitda, the brokerage said. These companies remain Citi's preferred picks in the Indian pharmaceutical sector, due to their diversified portfolios and lower reliance on the US generics market.