Donald Trump’s Tariffs: Booster Pill For Pharma Stocks? Five Stocks And Targets

Pharma Stocks Today: Shares of Sun Pharma, Lupin, Mankind, Cipla, and other major pharmaceutical companies rose 3-4% on Thursday after the US government, under President Trump 2.0's Reciprocal Tariff Policy, exempted India's pharmaceutical sector from the initial wave of tariffs, providing much-needed relief amid ongoing concerns.  Following the news, Nifty Pharma surged 5%, and all major pharmaceutical companies' shares settled in the green zone.

This exemption is particularly welcome after a period filled with uncertainty. The pharmaceutical sector, which includes Indian generics that makeup 40% of total drug imports in the U.S., is crucial for keeping healthcare affordable.

Major players in the Indian pharmaceutical industry, like Sun Pharma, Lupin, Aurobindo, Zydus Life, and Dr. Reddy’s Laboratories, heavily depend on the U.S. market.

Sales to the U.S. account for 30-50% of these companies' overall revenues, highlighting how much the U.S. relies on India's cost-effective, high-quality generics.

Also Read: Donald Trump's Tariffs: Will Indian Engineers In US Lose Jobs?

Pharma Stocks Share Price Target 2025

Brokerage firm, HDFC Securities have flagged Sun Pharma, Lupin, and domestic-focused firms like Torrent Pharma, Mankind, IPCA, and Eris Life as top investment picks, noting that companies without exposure to the U.S. generics market may be better shielded from future tariff-related risks.

Here are the targets given by the brokerage firm on Pharma and Healthcare stocks along with recommendations:

Pharma Stocks To Watch

Alkem: The brokerage recommended adding at Rs 5,700.
Aurobindo Pharma: The brokerage suggests adding at Rs 1,350.
Dr. Reddy's Lab: The brokerage advised reducing to Rs 1,280.
Eris Life: The brokerage recommended buying at Rs 1,500.
IPCA: Strong buy signal at Rs 1,800 for long-term potential.
Lupin: The brokerage recommended adding at Rs 2,330.
Mankind: The brokerage recommended adding Rs 2,830.
Sun Pharma: The brokerage recommended buying at Rs 1,970.
Torrent Pharma: The brokerage recommended adding at Rs 3,640.
Zydus Life: The brokerage recommended Add at Rs 1,120.

Healthcare Stocks To Watch

Apollo Hospitals: The brokerage recommended buying at Rs 7,520.
Max Healthcare: The brokerage recommended reduce at Rs 1,020.
Medplus: The brokerage recommended buying at Rs 900.
Dr Lal Path Labs: The brokerage recommended adding at Rs 2,910.
Metropolis: The brokerage recommended adding at Rs 2,050.

Why Tariffs on Indian Pharma Companies Exempted?

While the exclusion of pharmaceuticals from the tariffs has sparked some optimism, challenges still loom. The potential for duties under the Trade Expansion Act of 1962 could threaten this vital trade relationship.

If tariffs were to be imposed on Indian generics, it would drive up medicine prices in the U.S., increasing healthcare costs and potentially leading to supply chain issues and drug shortages.

Challenges For Indian Pharma Companies

Many Indian pharmaceutical firms already operate on tight margins in the generics market and may struggle to absorb these extra costs without passing them on to consumers and insurers.

Moreover, the complicated nature of the U.S. healthcare system, with its many stakeholders, complicates any potential negotiations.

Shifting production to the U.S. would also present significant challenges, including high operational costs, hefty investments, and lengthy regulatory processes, making it an economically unfeasible option for many Indian manufacturers.

Stock Market Today

The Indian market indices closed lower on Thursday, pulled down by the impact of the US administration's retaliatory tariffs placed on partner countries, including India.  The Nifty 50 closed at 23,250.10, down 82.25 points (0.35 per cent), while the Sensex was down 322.08 points (0.42 per cent) at 76,295.36.