Pharma’s Four-Day Streak Ends: Dr. Reddy’s, Biocon Lead the Decline

On September 15, the Nifty Pharma index slipped more than a percent in mid-day trade as investors booked profits at elevated levels. The fall marked the end of a four-day gaining streak, making the pharma index one of the top sectoral losers of the session.

Dr. Reddy’s Leads Decline After USFDA Observations

Dr. Reddy’s Laboratories was the sharpest loser, sliding nearly 2%. The company disclosed that the US Food & Drug Administration (USFDA) issued a Form 483 with five observations following a Pre-Approval Inspection (PAI) at its biologics manufacturing facility in Bachupally, Hyderabad, conducted on September 12. The company said it will address the observations within the stipulated timeline.

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Broader Sector Weakness

Other major pharma names also witnessed declines. J B Chemicals and Pharmaceuticals fell 1.5% to trade at ₹1,673.40 apiece. Torrent Pharma, Biocon, Aurobindo Pharma, Glenmark Pharma and Natco Pharma each shed more than 1%. Lupin, Zydus Life and Sun Pharma fell nearly 1% each. Ajanta Pharma, Cipla, Laurus Labs and Mankind Pharma also traded lower with marginal losses.

Gainers in the Pharma Space

Amid the broader selling, select stocks bucked the trend. Granules and Abbott India rose more than 1%. Gland Pharma, Alkem Labs, Divi’s Laboratories and IPCA Labs also managed to trade in positive territory with marginal gains.

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Granules
Abbott India
Gland Pharma
Alkem Labs
Divi’s Laboratories
IPCA Labs

Concerns Over US Tariff Plans

Investor sentiment was further dampened by uncertainty over US trade policy. While pharma products were earlier exempted from tariff hikes under US President Donald Trump’s trade measures, recent comments in August raised concerns. Trump indicated he eventually plans to impose tariffs of up to 250% on pharmaceutical imports into the US, without providing a clear timeline. He suggested an incremental approach, beginning with a smaller levy and raising it gradually to 150% and then to 250% over the next 12–18 months.

The US had previously launched a Section 232 investigation into pharmaceutical imports to assess national security concerns. Trump stated the aim was to encourage domestic production of pharmaceuticals.

BioSecure Act Back in Discussion

The US legislative backdrop added to concerns. The BioSecure Act, first introduced in 2024 to secure biotechnology supply chains and reduce Chinese influence, had cleared the House of Representatives but stalled in the Senate. A diluted version of the bill has resurfaced for consideration, according to news reports.

Analyst Views: Challenges and Long-Term Drivers

Market analysts highlighted that the Indian pharma sector has faced significant headwinds in 2025, particularly from pricing pressure in the US and regulatory challenges.

Kalp Jain, Research Analyst at INVasset PMS, noted that despite short-term pressures, the structural outlook remains positive. He highlighted India’s continued dominance in supplying over 20% of the world’s generics, as well as growth opportunities from rising domestic healthcare spending and niche areas like Contract Research, Development and Manufacturing (CRDMO). Jain added that specialty drugs, complex generics and branded formulations could help offset cyclical challenges.

Santosh Meena, Head of Research at Swastika Investmart, said that pharma stocks were showing divergent trends depending on company-specific fundamentals and developments. He pointed out that the Nifty Pharma Index continues to trade above its key moving averages, signaling an overall bullish bias.

Vishnu Kant Upadhyay, Assistant Vice President – Research & Advisory at Master Capital Services, added that the index had broken out of an ascending triangle pattern, suggesting a bullish reversal. He highlighted Laurus Labs, Zydus Life and Lupin as stocks showing strong technical momentum and potential upside.

Outlook for Nifty Pharma Index

So far in 2025, the Nifty Pharma index is down nearly 5%. Analysts expect recovery to be gradual, hinging on regulatory clarity, easing pricing pressure in exports and growth in specialty therapies. While portfolios heavily reliant on generics may take longer to recover, companies with diversified offerings and strong balance sheets are seen as better positioned. With valuations moderating after corrections, selective accumulation in quality names could offer long-term opportunities, according to experts.

Key Highlights

• Nifty Pharma Index fell over 1% on September 15, ending a four-day winning streak.

• Dr. Reddy’s was the top loser, down nearly 2% after USFDA issued Form 483 with five observations.

• Torrent Pharma, Biocon, Aurobindo, Glenmark and Natco Pharma fell over 1% each.

• Granules and Abbott India gained more than 1%, bucking the sector-wide decline.

• Concerns over potential US tariffs on pharma imports added pressure on exporters.

• Analysts say near-term challenges persist, but long-term growth drivers remain intact.