Sun Pharma Hits 52-Week Low as US Imposes 100% Tariffs on Imported Drugs

Indian pharmaceutical shares took a fall on Friday, September 26, after the US government announced tariffs on imported branded and patented medicines. The new rules, effective October 1, will impose a 100% duty on such imports, dealing a major blow to Indian drugmakers that depend heavily on the American market.

Sun Pharma, India’s largest pharmaceutical company, dropped more than 4% to Rs. 1,571.3, touching a 52-week low. The broader Nifty Pharma index also weakened, falling nearly 2% over the past month.

Heavyweights such as Cipla, Divi’s Laboratories, Ajanta Pharma, and Gland Pharma lost between 5% and 6%, underscoring the broad sell-off across the sector.

Impact on Sun Pharma

Sun Pharma’s business is highly exposed to the US, with specialty products, such as Illumya, Cequa, Odomzozo, and WInlevi, representing nearly 19.3% of total sales. In FY25, specialty sales increased 17% year-on-year, at $1.2 billion, including $681 million from Illumya alone.

Although Sun Pharma does not provide a detailed breakdown of sales from its plants based in the US, management has indicated in the past that existing domestic capacity could support increased production if required.

Analysts, however, remain cautious, as clarity is lacking on which parts of its portfolio may be shielded from tariffs. Systematix Research warned that the move could shave off 5%-10% of Sun Pharma’s annual EBITDA, depending on how tariffs are applied globally. 

If European markets remain under the existing 15% tariff agreements, the impact may be lower, but further clarity is awaited.

Section 232 Probe and Policy Uncertainty

The announcement stems from a Section 232 national security investigation by the US Commerce Department. While the new tariffs cover branded and patented drugs, generics, biologics, and over-the-counter medicines are being evaluated separately under a parallel investigation.

This uncertainty leaves Indian exporters vulnerable. Aditya Khemka of InCred Asset Management noted that “tariffs on generics cannot be ruled out,” adding that investors may prefer to stay away from pharma stocks until the US government clarifies its stance.

Wider Market Reaction

The impact was sector-wide. Caplin Point, Wockhardt, Natco Pharma, Laurus Labs, and Alembic Pharma all fell between 3% and 4.5% on the day. Eight of the ten worst performers on the Nifty 500 belonged to the pharma sector, reflecting the market’s immediate anxiety.

Also Read: Trump’s 200% Drug Tariff Plan Sparks Fears of Rising Costs and Shortages in the US

Outlook

The imposition of a 100% tariff is one of the steepest trade measures faced by the Indian pharmaceutical sector in years. While companies with existing or upcoming plants in the US may escape the worst effects, most Indian exporters remain exposed.

As long as Washington does not clarify the scope of its tariff policy, investors are likely to remain cautious, and pharmaceutical stocks may continue to be volatile. For Sun Pharma, which has relied upon the US for growth for a long time, this represents yet another regulatory and financial headache.