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Informist, Friday, Apr. 25, 2025

MUMBAI - Shares of pharmaceutical companies are likely to be muted next week, with investor focus on March quarter earnings, analysts said. Market participants will continue to keep an eye on developments related to US tariffs. Pharmaceutical drugs are among the few products on which the US has not imposed tariffs as of now, though US President Donald Trump has said he will announce a 25% import levy on them soon. Tariffs on pharmaceuticals would be a negative as Indian companies earn a good chunk of their revenue from the US, with the country supplying about half of all generic drugs used in the world's largest economy.

There is still no clarity on whether the US will impose tariffs on pharmaceuticals before or after the 90-day pause announced on levies on most countries. A 25% tariff on pharma products would increase US drug costs by nearly $51 billion annually, which could drive US prices higher by nearly 13%, Reuters reported. The analysis, conducted by Ernst & Young, found the US imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe--primarily Ireland, Germany and Switzerland, the media report said.

No major earnings of pharma companies are scheduled next week, except Ajanta Pharma on Wednesday. The company's consolidated net profit is seen rising 12% on year to INR 2.27 billion and revenue is likely to rise nearly 8% to INR 11.35 billion, according to the average of estimates from eight broking firms. Sequentially, this would mean a 2.5% decline in the bottom line and a 1% fall in the top line. Its shares Friday closed 4.1% lower at INR 2,676 on the National Stock Exchange.

All 20 constituents of the Nifty Pharma index closed lower on Friday amid a sell-off in the domestic market. The index closed 2.2% lower at 21482.55 points, snapping a five-day winning run. The stock market fell due to worries about likely escalation in tension between India and Pakistan. The development came at a time when the market was taking a breather from the sell-off because of the US tariffs. Investors will continue to monitor developments between the two nations over the weekend. On Thursday, Pakistan suspended bilateral agreements and closed its airspace to domestic airlines a day after India cut ties with its neighbour following the terror attack in Pahalgam. 

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Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Ashish Shirke

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