US President Donald Trump’s announcement on April 2, 2025, regarding the imposition of trade tariffs soured the mood of the market. Indian indices declined during the week, falling over 2 per cent amid the tariff announcement.
The Sensex declined 2.64 per cent to 75,364.69 from 77,414.92 in the five-day period between March 28, 2025 and April 4, 2025. On the other hand, the Nifty declined 2.61 per cent to 22,904.45 from 23,519.35.
Notably, Trump did not impose any tariffs on pharmaceuticals, which led to the Nifty Pharma index witnessing a brief relief on April 3, 2025, a day after he made the announcement.
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However on April 4, Trump told reporters aboard the Air Force One that he plans to impose tariffs on pharma imports as well. He added that the tariffs will come in at a level which US’ trading partners have not seen before.
“Pharma (tariffs) is going to be starting to come in, I think, at a level that you haven't really seen before,” Trump said.
As the markets witnessed sell-offs, the Nifty Pharma index tumbled 2.73 per cent to 20,560 from 21,137.45. While 18 constituents of the index tumbled, two constituents managed to buck the trend.
Notably, stocks of Gland Pharma Ltd, IPCA Laboratories Ltd, Laurus Labs Ltd, Granules India Ltd and JB Chemicals and Pharmaceuticals Ltd declined up to 7.38 per cent during the week.
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Which Stocks Bucked the Trend
Shares of Mankind Pharma Ltd and Torrent Pharmaceuticals Ltd skipped the selling spree and ended up gaining 1.01 per cent and 1.81 per cent on the NSE during the week.
The two stocks managed to remain largely unaffected by the tariff announcement, as they have relatively less presence in the US market. Additionally, exports make up a small part of the revenue of the two companies, as a significant part of their revenue comes from their domestic pharmaceutical business.
According to Mankind Pharma’s investor presentation, the company’s consolidated total revenue from operations for the quarter ending December 31, 2024 of the current fiscal (FY 2024-25) stood at Rs 3,230 crore.
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Out of the total Rs 3,230 crore, the company’s domestic business generated a revenue of Rs 2,773 crore, while its export business generated Rs 457 crore. In percentage terms, the company’s India-focused business generated 85.85 per cent of its revenue, while its exports business generated nearly 14 per cent of its total revenue in the third quarter of FY25.
Torrent Pharmaceuticals’ consolidated total revenue from operations for the third quarter of FY25 stood at Rs 2,809 crore. According to the company’s investor presentation, it earned Rs 1,581 crore from its India-focused business, and Rs 271 crore from its US-focused business.
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Notably, the company has a presence in other markets as well, such as Germany and Brazil along with other countries. US comprised the smallest portion of the company’s revenue in Q3FY25 out of all geographies.
Bhavya Shah, head of research, Wallfort PMS told Outlook Money that investors should observe US policy moves along with the subsequent strategy adopted by other US trade partners. He added that companies with overdependence on the US are expected to face higher volatility in the coming days.
“Apart from US trade policy developments, subsequent strategies adopted by global competition have to be closely observed. Companies with overdependence or higher share of revenue coming out of the US will face high volatility,” Shah said.
While the fate of India’s pharma sector remains in limbo, a 10 per cent basic tariff has been imposed on most US imports.
Along with varying reciprocal tariffs on both allies and rivals of the US, Indian drugmakers are expected to remain on a 'wait and watch' mode, as any potential tariffs can heighten the difficulty in doing business with the US.
