Sun Pharma Share Price Down 4%, Nifty Pharma Extends Losing Streak Amid Trump's Tariff Announcement - Know What Investors Should Do

Sun Pharma Share Price: Shares of domestic pharmaceutical companies came under pressure amid the imposition of a fresh round of tariffs on the import of pharmaceutical goods to the US. The Nifty Pharma index extended its losing streak for the fifth straight day.

Major constituents of the index such as Sun Pharma and Cipla Ltd fell significantly in early trade. Sun Pharma share price declined nearly 5 per cent to Rs 1548 apiece on the NSE in early trade. Cipla share price declined over 2 per cent to Rs 1509.7 apiece on the NSE.

Nifty Pharma Under Pressure

The Nifty Pharma index has declined consistently in the past five sessions, the index has cracked over 5 per cent from 22686.6 level on September 19 to 21426.3 on September 26.

Prior to the actual tariff announcement by US President Donald Trump the pharmaceutical sector was already facing uncertainty due to a shift in US policy stance such as the announcement of the H-1B Visa fee hike. However, on September 26, pharmaceutical stocks came under pressure due to an announcement by US President Donald Trump regarding the import of pharmaceutical stocks to the US.

“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. “IS BUILDING” will be defined as, “breaking ground” and/or “under construction.” There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!,” Trump wrote in his post.

US President Donald Trump wrote in his post on Truth Social that the US will be imposing a 100 per cent tariff on the import of all branded or patented pharmaceutical products. He added only companies with manufacturing plants in the US will be exempt from the tariffs. The tariffs are set to become effective from October 1, 2025.

The latest tariff announcement acted as a headwind for domestic pharmaceutical companies leading to a decline in their stock prices. The announcement has also led to a dampening of investor sentiments due to the heightened uncertainty around the future of the Indian pharmaceutical sector which relies heavily on the US as an export market.

In early trade, all 20 constituents of the Nifty Pharma index traded in the red. Shares of Natco Pharma, Laurus Labs and Sun Pharmaceuticals fell the most, trading lower by 3.72 per cent, 3.45 per cent and 3.29 per cent respectively. Shares of Gland Pharma, IPCA Laboratories, Biocon and Zydus Lifesciences traded lower by as much as 3.17 per cent.

The top-five constituents of the index in-terms of weightage dragged the index lower. The top-constituents which include Sun Pharmaceutical,  Cipla Ltd, Divi's Laboratories Ltd, Dr. Reddy's Laboratories Ltd and Lupin Ltd traded lower in the range of 3.28 per cent to 1.33 per cent at the time of writing.

What Should Investors Do?

Harshal Dasani, Business Head at INVasset PMS told Outlook Money that while the reaction to Trump tariffs has been largely negative, the near-term panic is likely to be followed by partial stabilization as clarity emerges around product categories. He added that the domestic pharma industry's export mix to the US is dominated by generics which do not immediately come under the category on which the 100 per cent tariff has been imposed.

"The 100% tariff announced on September 25 for branded and patented drugs has sent shockwaves through the sector, sparking a sharp sell-off. While the headline reaction has been negative, it is important to note that India’s export mix to the U.S. is still dominated by generics, which are not immediately under the tariff net. This distinction means the near-term panic could be followed by partial stabilization as clarity emerges around product categories," Dasani said.

Dasani added that investor sentiment is likely to remain cautious till there is more clarity on the imposition of tariffs on pharmaceutical good such as biosimilar and generic medicines.

"Investors are worried that the tariff action could expand into other high-value segments like complex generics and biosimilars. Until there is assurance on this front, sentiment may remain cautious," Dasani said.

Dasani stated that since different pharmaceutical goods face differing degrees of vulnerability to the tariffs, investors should exercise a middle path and pare stake in more exposed counters while retaining exposure to holdings in fundamentally stronger businesses.

"The uniform sell-off suggests a risk-off reaction, but not all pharma companies face the same degree of vulnerability. Thus a middle path could be optimal: pare some stake in the most exposed counters to reduce downside risk while retaining core holdings in fundamentally stronger businesses," Dasani said.

Dasani, however cautioned investors against blindly buying the dip amid the decline in the Nifty Pharma index. He advised investors to phase entries through staggered buying and remaining patient and disciplined amid the heightened volatility.

"Valuations are beginning to look more reasonable compared to recent peaks. That said, the tariff shock is a fundamental event, not a routine correction. Blindly “buying the dip” could expose investors to prolonged uncertainty. A more strategic approach would be to phase entries through staggered buying, thereby reducing the risk of mistiming. Patience and discipline will be key until policy clarity returns," Dasani said.