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Informist, Friday, Mar. 28, 2024

MUMBAI – All eyes will be on US President Donald Trump next week as he is set to announce reciprocal tariffs targeting several countries, including India. These tariff announcements are being seen as the biggest trigger for the market next week, especially for pharmaceutical stocks, according to analysts. Trump has repeatedly threatened tariffs of around 25% on pharmaceutical products sent to the US.

However, market watchers have ruled out any hefty tariffs targeting the sector as that could lead to more trouble for the world's largest economy. Pharmaceutical companies would most likely hike prices of their products to pass on the costs, and are unlikely to shift manufacturing to the US as that would not be cost effective, analysts said. Additionally, high tariffs on pharma products would drive up healthcare costs in the US, which, in turn, could cast a pall over Trump's agenda to lower these costs, analysts said.

India was one of the largest exporters of pharmaceutical products to the US in 2024. The US imported pharmaceutical products worth $12.5 billion last year, according to a report by Morgan Stanley Research. In comparison, the US imported pharma products worth $15.3 billion from Singapore and $7.8 from China, as per the report.

Even if tariffs are imposed, the impact would vary depending on each pharma company and its exposure to the US market, analysts said. "A lot depends upon the company, its export mix, and specifically its exports to the US. So we can't talk about the overall pharma sector as such because they're the mix of all the companies differ from company to company," Anita Gandhi, whole-time director of Arihant Capital Markets, said.

For the IT sector, at least majority of the top IT companies are primarily catering to US, she said. Unlike this, in pharma, the business structures vary from company to company and it will more depend on companies and the products which they are exporting, she said. The Nifty Pharma index closed over 2% lower this week, underperforming the benchmark indices which ended the week slightly up.

TOP HEADLINES

* IPCA Labs to sell Palghar plant to VS Intl for INR 369 mln via slump sale
* NCLT approves merger of Cohance Lifesciences with Suven Pharmaceuticals
* PRESS: KKR launches block deal of around $200 mln in JB Chemicals
* Dr Reddy's, Bio-Thera Solutions in commercialisation pact for 2 biosimilars
* HC asks Natco Pharma to maintain status quo, not launch Risdiplam till Apr 2
* UBS AG cuts stake in Federal Bk, Max Fincl, Glenmark Pharma
* CARE withdraws rating assigned to Mankind Pharma's multiple debt instruments
* Granules India board OKs internal restructuring plan involving US-based arms
* Concord Biotech starts production of injectables at new facility in Gujarat
* Delhi HC rejects F Hoffmann-La interim injunction plea against Natco Pharma
* Biocon arm gets US FDA approval for norepinephrine bitartrate injection
* Syngene Intl gets INR 1.19-bln tax demand, penalty from Bengaluru tax body

* Syngene Intl to acquire 26% stake in O2 Renewable Energy II for INR 65 mln

* Max Healthcare announces amalgamation of subsidiaries for better growth
* Alembic Pharma says no observations post US FDA inspection at Karakhadi unit
* Vanguard funds buy 1.1% stake in Gland Pharma at INR 2.95 bln via bulk deals
 

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 Deepshikha Bhardwaj

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