Pharma Stocks Plunge Amid Tariff Threat from US Administration
Tariff threat ain't over yet! Sun Pharma, other pharma stocks plunge up to 6%
The Economic Times
Image: The Economic Times
Shares of major Indian pharmaceutical companies, including Sun Pharma and Dr Reddy’s, dropped by up to 6% following reports that the US administration may impose tariffs on drugmakers without pricing agreements. The Indian rupee's significant appreciation further pressured these stocks, impacting their revenue from overseas markets.
- 01Sun Pharma shares fell by 5.3% to ₹1,635 amid tariff concerns.
- 02The US administration is considering a 100% tariff on imported branded medicines.
- 03The Indian rupee appreciated by 1.8%, affecting revenue for pharma companies.
- 04Divis Laboratories and Glenmark Pharma also saw declines of over 4% and 6%, respectively.
- 05The tariff plans are not final and may include exemptions for certain medicines.
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Shares of Indian pharmaceutical companies, including Sun Pharma, Dr Reddy’s, and Divis Laboratories, experienced significant declines of up to 6% on Thursday due to reports from Bloomberg about potential 100% tariffs from the US administration on drugmakers lacking pricing agreements. Sun Pharma's stock fell 5.3% to a low of ₹1,635, while Divis Laboratories dropped over 4% to ₹5,648. Glenmark Pharma's shares slipped 6% to ₹1,967, and Cipla declined by 2.5% to ₹1,166. The tariff threat comes as the Indian rupee surged 1.8% to ₹93.1738 per dollar, marking its largest increase since September 2013. This appreciation affects pharmaceutical companies that earn significant revenue in foreign currencies, as it results in lower realizations when converted to rupees, directly impacting their revenue growth.
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The potential tariffs and currency appreciation could lead to decreased revenues for pharmaceutical companies, affecting their stock prices and investor confidence.
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