Pharma Stocks Fall: Aurobindo, Cipla, Lupin Lead Declines Amid Trump Tariff Concerns

Market Performance

The Nifty Pharma Index plunged 1.92% in morning trade on Tuesday, sliding from Monday's close of 21,775.75 to an intraday low of 21,359.30.

• Opening level: 21,672.85
• Previous Close: 21,775.75
• Intraday low: 21,359.30
• Total dip: Approx. 2%

This marked a notable fall in pharmaceutical stocks, with top companies like Aurobindo, Cipla, and Lupin leading the correction.

Main News

The sell-off in pharma shares came after reports indicated that U.S. President Donald Trump is likely to impose tariffs on pharmaceutical imports, targeting drugs manufactured outside the United States.

A Reuters report revealed that Trump recently signed an executive order to speed up approvals for domestic pharmaceutical plants. This move is part of a larger push to enhance domestic drug manufacturing in the U.S., potentially placing pressure on export-reliant companies.

The U.S. FDA has been directed to collaborate with local manufacturers to streamline the new pharmaceutical facility review process.

Company Impact: Aurobindo, Cipla, Lupin, Dr Reddy's Laboratories, Zydus Lifesciences Share Price

Aurobindo Pharma

• Among the worst hit in the Pharma Index.
• Share price dropped over 3%.
• The company derives significant revenue from the U.S., making it vulnerable to new tariff policies.

Lupin and Cipla

• Both stocks saw sharp corrections between 2% to 3%.
• Like Aurobindo, these companies have significant exposure to the U.S. market.

Dr Reddy's Laboratories and Zydus Lifesciences

• They are also under pressure due to their dependency on U.S. exports.
• While they operate some plants in the U.S., a large production volume still happens in India.

Summary

The pharmaceutical sector came under selling pressure on Tuesday, driven by fears of upcoming U.S. import tariffs. As most Indian pharma giants, including Aurobindo, Cipla, Lupin, Dr Reddy's Laboratories, and Zydus Lifesciences, heavily rely on exports to the U.S., investor sentiment turned cautious.

The Nifty Pharma Index fell nearly 2%, and leading pharma stocks suffered noticeable declines. With tariff announcements expected soon, volatility in the sector may continue.