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Informist, Friday, Feb. 28, 2025

MUMBAI –  Investors are likely to remain on tenterhooks about any negative developments regarding tariffs on exports of pharmaceutical products to the US. Several pharmaceutical stocks have already taken a beating after US President Donald Trump last week threatened to impose tariffs of around 25% on pharmaceutical products. Worries about likely tariffs, coupled with bearishness in the overall market are likely to drag pharma stocks lower next week, analysts said.

The Nifty Pharma index fell nearly 3% this week and closed at 19813.50 points Friday. The index ended lower for the third week in a row. Of 20 stocks in this index, 15 ended the week with losses. There is "no trend reversal in sight" for pharmaceutical stocks and selling pressure will accelerate on every pullback, Jay Vora, senior technical and derivatives analyst at Indiacharts, said. The Nifty Pharma index is expected to find major support at 19400 points and face resistance at 20300-20700 points.

The US administration last week announced that it will impose reciprocal tariffs on all nations, including India, based on the duty levied on the US goods. If the US imposes sector-wise tariffs, the pharmaceutical sector will likely be one of the worst hit, economic think tank Global Trade Research Initiative said in a report last week. Currently, there is no import duty levied on Indian drugs supplied to the US, while India imposes around 5-10% import duty on average on pharma imports from the US, Kotak Institutional Equities said in a report Wednesday.

In the backdrop of uncertainties around US tariffs on pharma products, tariffs of over 10% are unlikely to be levied as those are impractical, Kotak Institutional Equities said. However, in the worst-case scenario of high tariffs, companies would be forced to prune their portfolio in the US, or completely exit in some cases, after exhausting other avenues like passing on the higher costs to US customers, it said. The brokerage said Sun Pharmaceutical Industries, Cipla, Lupin, JB Chemicals & Pharmaceuticals, and Emcure Pharma were its top picks.

For biosimilars, it will not be easy to pass on higher tariffs to US patients, as the US is not as dependent on India for biosimilars as it is for generic drugs, Kotak Institutional Equities said. Active pharmaceutical ingredients or contract research, development, and manufacturing companies will be directly shielded from the tariffs, given the business-to-business nature of their operations, and would have a slightly higher ability to pass on the tariffs to their clients, but these companies will continue to have an indirect exposure to US tariffs, the brokerage said.

TOP HEADLINES

* Biocon launches glucagon-like peptide-1 Liraglutide in UK
* Sanofi India Oct-Dec net profit falls 34% on year to INR 913 mln
* NCLT clears merger of Shree Jee, JPR Labs, Jaspack Ind with Mankind Pharma
* Eris Lifesciences completes acquisition of 30% stake in Levim Lifetech
* Granules India gets US FDA warning letter after inspection of Gaillapur unit
* Glenmark Pharma's US arm launches Epinephrine injection
* Zydus Life to launch vaccine against influenza virus in India
* Caplin Point gets US FDA OK for generic of Combigan ophthalmic solution
* Emcure Pharma gets 2 observations from US FDA for mfg unit in Maharashtra
* Go Digit General Insurance invests INR 300.6 mln in shares of Dr Reddy's
* SEBI demands INR 1.44 mln from Kunal Ashok Kashyap in Biocon case
* Dr Reddy's gets US FDA's voluntary action indicated tag for Hyderabad unit
* More capacity to aid 15-20% CAGR in sales for 3-5 yrs - Sai Life Sciences MD
* US FDA issues 3 observations after inspecting Gland Pharma's Vizag unit

* US FDA issues 5 observations to Syngene Intl's Bengaluru unit
* Dr Reddy's MD says high tariffs may make pharma pdts costlier for US users
* Biocon Biologics launches Yesintek biosimilar to Stelara in US
* Glenmark Pharma, arm pay $7 mln to 3 plaintiffs in US on claim over generics
* Zydus Life gets final OK from US FDA for Ibuprofen, Famotidine tablets
* Granules India to buy Switzerland's Senn Chemicals via arm for INR 1.93 bln
* US tariffs may hit Indian farm, pharma, jewellery sectors hard - think tank
* Lupin gets establishment inspection report from US FDA for Somerset mfg unit

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Alina Geogy

Edited by Tanima Banerjee

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