Biocon, Cipla, Dr Reddy’s, Other Pharma Stocks In Red Amid Trump Tariff Uncertainty; What Should Investors Do?

The Indian pharmaceutical sector stocks remained under pressure on Wednesday, a day after United States President Donald Trump's latest tariff remark related to pharma imports. Biocon, Cipla, Dr Reddy's, Torrent Pharma, Granules, Abbot India, JB Chemicals and Pharmaceuticals Limited, and Alkem were among the top Nifty Pharma losers on Wednesday.

Nifty Pharma was down around 0.07% on Wednesday. Donald Trump, on Tuesday, had hinted towards a potential tariff on pharmaceutical imports to protect the pharma industry in the United States. In his latest tariff-related remark, Trump said that tariffs on pharma are 'coming soon'. While the announcement led to a massive decline in pharma stocks on Tuesday, the weak market sentiment around the stocks persisted on Wednesday as well.

"Media reports of possible US tariffs on pharma imports are likely to keep Indian pharma stocks under pressure," said Siddhartha Khemka, Head - Research, Wealth Management at Motilal Oswal Financial Services Ltd.

"Pharma and healthcare counters came under heavy selling pressure and were down by more than 1.5 per cent following US President Donald Trump's remarks on the imposition of tariffs on pharmaceutical imports," noted Bajaj Broking Research in its report.

The weak market sentiment around pharma stocks has left investors in a dilemma related to their investment strategy for these stocks. In such scenario, investors are advised to focus on fundamentally strong pharma companies, especially those who have diversified exposure in the business, according to Prasanna Pathak, Managing Partner, The Wealth Company.

"What we're witnessing is a divergence within the sector. For investors, the lesson is clear to focus on fundamentally sound businesses with diversified exposure, and use periods of volatility to accumulate quality names. In an environment shaped by policy flux, diversification and a disciplined, research-driven approach remain the most effective tools to navigate risk and capture long-term opportunity," Pathak explained.

While underlining the importance of US market for pharma companies, Pathak noted that companies who have high reliance on the US market for revenue will be worst hit in the scenario.

Explaining the sharp sell-off in pharma stocks post Trump remark, Pathak added, "We've seen that anticipation alone has triggered a sharp reaction in the Nifty Pharma index, with stocks of major US-focused exporters like Lupin, Aurobindo, and Granules India falling over 3% in a single session. This underscores how quickly the market factors in policy uncertainty and the potential for margin compression if tariffs are imposed."

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