Pharma Stocks Surge as US Pauses Tariffs: Granules, Laurus Labs, Cipla Lead Gains

Market Overview

On April 11, 2025, pharmaceutical shares witnessed a notable upswing following the temporary suspension of reciprocal tariffs by the United States. This development helped reduce recession-related concerns and contributed to optimism in the pharma sector. The Nifty Pharma index recorded an increase of nearly 3 percent during early trading hours.

Sector Movement

The US President's announcement of a 90-day pause on the proposed tariffs led to an immediate response from the Indian pharmaceutical sector. The sector, which was initially expected to be impacted by tariff implementations, benefited from being exempted for the time being.

Company-wise Performance

• Granules India saw the most significant movement, with its share price climbing nearly 5 percent, reaching ₹453.
• Laurus Labs and Cipla experienced a 4 percent rise in their share prices.
• Sun Pharma, Aurobindo Pharma, and Biocon each gained more than 3.7 percent.
• Lupin and Zydus Life increased by approximately 3 percent.
• Other companies such as Natco Pharma, Dr. Reddy's Laboratories, Gland Pharma, and Torrent Pharma posted gains of nearly 2 percent.
• Firms like Mankind Pharma, Abbott India, and Zydus Lifesciences traded over 1 percent higher.

Trade Developments

The tariff pause was first introduced on April 9, 2025, after an earlier announcement on April 2 proposing a new set of reciprocal tariffs on various trade partners. While the pharmaceutical sector was initially excluded from the list, there were indications it might be considered later. Reports on April 10 noted that India is engaged in bilateral trade discussions with the United States, and a partial agreement could potentially materialize soon. Although specific mentions of the pharmaceutical sector were not included, the overall dialogue supported related industries.

Summary

The United States' suspension of tariffs led to a positive response in India's pharmaceutical sector, with several companies recording noticeable gains. The development amidst broader trade negotiations helped alleviate immediate concerns over recession risks tied to tariff impositions. While no formal outcomes have been announced for the pharmaceutical sector, the initial exemption has contributed to the sector's favorable performance on April 11.