Sun Pharma Leads Pharma Stocks Decline After Trump Hikes Tariff To 100%
Sun Pharmaceutical Industries Ltd. declined nearly 5% on Friday as Trump announced 100% tariff on the Pharmaceutical sector unless the company has manufacturing capacity in the United States. This move is expected to have a significant impact on the Indian pharmaceutical industry, which is a major player in the global generics market.
Impact on Indian Pharmaceutical Stocks
Other Pharmaceutical stocks seeing decline are Cipla Ltd., Dr Reddys Laboratories Ltd., Lupin Ltd. and Biocon Ltd., however the impact on these companies is largely contained since the US tariffs mainly target branded and patented drugs, where multinational companies like Pfizer Inc. and Novo Nordisk Inc. dominate. It is yet unclear whether complex generics and specialty drugs from India could also face scrutiny.
Sun Pharmaceutical Industries and Biocon: Key Branded Players in the US
Sun Pharmaceutical Industries and Biocon are key branded players in the US. Sun Pharma may have some impact until it announces its US capex plans. It exports specialty drugs like ILUMYA, CEQUA, WINLEVI and ODOMZO. This category contributes 19% to overall revenue. In FY25, Global Specialty sales rose by 17.1%, reaching $1,216 million. A significant contributor to this growth was ILUMYA, which saw a 17% increase in global sales, totaling $681 million for the year.
Impact on Indian Stock Market
The scrip rose as much as 4.88% to Rs 1,548 apiece. It pared gains to trade 2.94% lower at Rs 1,579.60 apiece, as of 09:37 a.m. This compares to a 0.50% decline in the NSE Nifty 50 Index. It has fallen 16.79% in the last 12 months. Total traded volume so far in the day stood at 1 times its 30-day average. The relative strength index was at 39.
Analysts’ View
Out of 44 analysts tracking the company, 35 maintain a ‘buy’ rating, four recommend a ‘hold,’ and five suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target implies an upside of 22.1%. This suggests that analysts are still positive on the company’s prospects, despite the short-term impact of the tariff hike.
What Does This Mean for Indian Investors?
The tariff hike is a significant development for Indian investors, particularly those invested in the pharmaceutical sector. While the impact on Sun Pharma and other Indian companies may be contained, it is essential to keep a close eye on the situation and monitor any further developments. Indian investors should also consider the potential impact on the broader stock market and the economy as a whole.
Internal Linking Opportunities
For more information on the Indian stock market and the pharmaceutical sector, please visit our Indian stock market page. You can also check our pharmaceutical stocks page for the latest news and updates.
Conclusion
In conclusion, the 100% tariff hike on the Pharmaceutical sector announced by Trump is a significant development for the Indian pharmaceutical industry and investors. While the impact on Sun Pharma and other Indian companies may be contained, it is essential to keep a close eye on the situation and monitor any further developments. Indian investors should also consider the potential impact on the broader stock market and the economy as a whole.
