une 17, 2025 | Healthcare Markets | Pharma Sector Volatility and US Policy Risks
Pharmaceutical stocks extended their losing streak on June 17, 2025, amid persistent concerns over US regulatory scrutiny and trade policy risks. The Nifty Pharma index fell nearly 1.5% to 21,711, marking its third loss in the past four sessions and emerging as the worst-performing sector of the day. Pressure was visible across large-cap and mid-cap counters, with multiple stocks posting declines between 1% and 3%, dragging down broader market sentiment.
Sun Pharma, Aurobindo Lead Sector Decline; US FDA Action Adds Pressure
Among the worst-hit stocks, Aurobindo Pharma slipped 3.3% to ₹1,107, followed closely by Granules India, which fell 3% to ₹501. Heavyweight Sun Pharma lost more than 2%, closing at ₹1,649. The stock also emerged as the top loser on the benchmark Sensex. The selloff intensified after the US FDA issued eight observations on Sun Pharma’s Halol manufacturing plant in Gujarat, raising compliance-related concerns. This was the second consecutive session of losses for the stock, prompting broader sectoral weakness given Sun Pharma’s significant index weight.
Highlights
Sun Pharma down 2.1% after FDA flags Halol facility, extends 2-day decline.
Aurobindo Pharma top sectoral loser, drops 3.3% to ₹1,107.
Granules India, Lupin, and Natco Pharma fall over 2% each.
Nifty Pharma index down 1.5%, underperforming all major sectors.
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Broader Selloff Hits Sector Amid Mixed Regulatory and Geopolitical Signals
Several other pharma counters also faced intense selling pressure. Lupin, Natco Pharma, and Ajanta Pharma dropped more than 2%, while Divi’s Labs, Cipla, Zydus Lifesciences, and Laurus Labs declined by over 1.6% each. Mankind Pharma lost over 1%, and blue-chip names like Dr. Reddy’s, Alkem Labs, IPCA, Torrent Pharma, and Abbott India traded in the red with marginal losses. The widespread decline reflects mounting investor nervousness around both regulatory risk and geopolitical crosscurrents.
Highlights
Cipla, Laurus Labs, Zydus Life down over 1.6%, mirroring broader sentiment.
Ajanta, Lupin, Natco Pharma shed over 2% each amid pharma-specific concerns.
Dr. Reddy’s, Alkem, Glenmark trade weak with marginal intraday declines.
Mankind Pharma falls over 1% despite strong retail presence.
Trump’s July Tariff Deadline Fuels Investor Jitters Across Indian Pharma Sector
Market observers believe that a key overhang remains the looming US pharmaceutical tariffs, originally hinted at by President Donald Trump in early April. At the time, Trump had warned that tariffs on pharmaceuticals were coming at a level “not seen before.” This triggered a sharp fall in pharma stocks, followed by temporary relief on delayed implementation. However, Trump later announced in May that tariffs would be imposed within two weeks. While they have not yet been implemented, Trump has now set July 9 as a firm deadline for major trade actions, creating uncertainty around whether pharma goods could be added to the list.
Highlights
Trump sets July 9 as final deadline for new trade tariffs.
Pharma not explicitly targeted yet, but sector risks remain amid ambiguity.
Volatility spikes as investors weigh timing and scope of tariff impact.
India-US trade tension adds to pressure on export-reliant pharma firms.
Gland Pharma, Biocon Defy Sectoral Trend with Gains on Stability Hopes
Despite the overall negative tone, a few pharma stocks bucked the trend. Gland Pharma rose 1.4%, helped by continued strength in contract manufacturing and injectables exports. Biocon also traded with marginal gains, supported by expectations of limited tariff exposure and a stable pipeline outlook. Analysts noted that select names with diversified revenue streams and limited US exposure could outperform in a turbulent environment.
Highlights
Gland Pharma gains 1.4% on strong execution and limited tariff risk.
Biocon trades in green, aided by biologics focus and stable earnings outlook.
Investors rotate into stocks with less regulatory and geopolitical exposure.
Analysts Call for Caution Amid Policy Uncertainty and Valuation Risks
Brokerages and investment advisers warn that the sector’s short-term outlook remains volatile, driven by a mix of regulatory interventions, uncertain trade policy, and stock-specific issues. With the US being India’s largest export market for generic drugs, any new barriers could significantly disrupt revenue streams for key players. Analysts advise investors to stay cautious and prioritize companies with clean compliance records, limited US dependency, and pricing power in non-US markets.
Highlights
Analysts recommend caution until US trade clarity emerges.
Preference for pharma stocks with diversified markets and strong balance sheets.
US FDA action and Trump’s tariff warning both create near-term headwinds.
Valuation re-rating may pause until clearer regulatory and trade signals are seen.
