Wockhardt, Sun Pharma, Lupin, Alembic Pharma, other pharma stocks rebound up to 10% after clarification on Trump Tariffs

Pharmaceutical stocks staged a strong rebound on Monday, recovering from last week’s sharp decline after clarity emerged on the scope of fresh US tariffs on imported drugs.

Shares of Wockhardt rallied over 10%, leading the recovery in the sector. Bajaj Healthcare, Supriya Lifescience, Alembic Pharmaceuticals, Aster DM Healthcare, Sun Pharmaceutical Industries, Lupin, Cipla, Aarti Drugs, Zydus Lifesciences, Biocon, and others gained between 1–3%.

The Nifty Pharma index advanced over 1%, driven by key constituents such as Sun Pharma, Lupin, Cipla, Zydus Lifesciences, JB Chemicals & Pharmaceuticals, and Biocon.

The recovery in pharma stocks today comes after a steep correction on Friday, when US President Donald Trump announced a 100% tariff on branded and patented pharmaceutical products effective October 1, unless companies manufacture in the US.

However, sentiment improved significantly on Monday after it was clarified that the proposed tariffs would apply only to branded and patented drugs, not generic medicines, which form the bulk of Indian exports to the US.

Limited Impact on Indian Pharma Companies

Analysts expect minimal impact on Indian pharma companies, given their dominant focus on the generics market.

“India exports about $8.7 billion worth of pharmaceuticals to the US, comprising roughly a third of its total pharma exports. For many Indian firms, the US market accounts for 30–50% of their revenue. While generic drugs, which make up 90% of US drug volumes are largely unaffected, the recent 100% tariff on imported branded drugs is increasing costs, risking price hikes and supply disruptions,” said Om Ghawalkar, Market Analyst, Share.Market (PhonePe Wealth).

He added that Indian drugmakers are actively diversifying into emerging markets like Africa and Latin America and investing more heavily in biosimilars and innovative drug development to reduce dependence on the US.

“In the short term, the sector faces stock dips and margin pressures. However, the long-term outlook is a strategic shift toward bolstering domestic US supply chains and innovation. This pivot may reshape global pharma manufacturing, positioning companies investing in US production for greater market resilience and preference,” said Ghawalkar.

‘Business as Usual’ for Generics

Tushar Manudhane, Senior Vice President and Healthcare Research Analyst at Motilal Oswal Financial Services, believes the impact on Indian exporters will be negligible.

“There would be no impact on generics exports by Indian pharma companies, as the bulk of shipments to the US consist of generic medicines. Even for CDMOs, they typically supply parts of the product rather than the finished formulation for innovator companies. CDMOs also cater to the global needs of innovator pharma players, not just the US market,” he said.

He further pointed out that raw materials account for only 4–5% of sales for innovator companies. Given the complexities around switching suppliers — capability, capacity, and compliance — he expects costs to be either absorbed by innovators or passed on to consumers.

“The innovator has a limited period of patent exclusivity and would like to utilize the time to maximize the sales. We still await the executive order for detailed understanding of tariffs on drugs,” Manudhane said.

Caution Amid Policy Uncertainty

Despite the rebound, some analysts remain guarded.

Ajit Mishra, Senior Vice President, Research at Religare Broking, said, “The uncertainty around future policy shifts keeps nerves on edge. For Indian pharma giants, this is a wake-up call to strengthen supply chains and explore US-based manufacturing, even as the sector’s core strength in affordable generics continues to support global healthcare.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.