Trump Reciprocal Tariffs: Pharma stocks got wings due to exemption from tariff, these stocks can see a jump of up to 36% in the future

The US has announced a reciprocal tariff of 27% on goods coming from India. But pharma imports have been kept out of this. Due to this, Indian pharma companies have heaved a sigh of relief, the effect of which is visible on their shares. The market was expecting a 10% tariff on the pharma sector. Now Nifty pharma index stocks like J.B. Chemicals and Pharmaceuticals Limited, Natco Pharma Limited and Granules India Limited are expected to rise the most in the next 12 months.

These stocks are projected to rise between 32% and 36% from their current levels, according to Bloomberg data. In the case of J.B. Chemicals & Pharmaceuticals and Granules India, 87 percent of the 15 analysts tracking these stocks on Bloomberg have a "buy" rating. For Natco Pharma, 50 percent of the 12 analysts tracking the stock have a "buy" recommendation.

Other stocks listed on the Nifty Pharma index that are expected to see big gains include Aurobindo Pharma and Ajanta Pharma. Both these stocks can see a gain of up to 23 percent. Interestingly, based on analyst estimates, all stocks in the Nifty Pharma index, except Laurus Labs, are projected to gain from current levels.

Nifty pharma index gained 2 per cent

On April 3, the Nifty Pharma index has gained 2 percent. IPCA Labs' share has risen 5 percent. Lupin and Natco Pharma's share has gained 4 percent. Sun Pharma's share has strengthened by 3.50 percent and Cipla's share has strengthened by 3 percent. On April 3, JB Chemicals' share has risen 1 percent and Granules India's share has risen 1.6 percent. Aurobindo Pharma's share has risen 1.5 percent, while Ajanta Pharma is at flat level.

The current discount is a positive development but…

According to market participants, the current exemption from US tariffs is a positive development for Indian pharma companies as they have significant exposure to the US market. The companies that generate the highest revenue from the US include Gland Pharma (50%), Aurobindo Pharma (48%), Zydus Lifesciences (47%) and Dr. Reddy's Laboratories (46%).

Foreign brokerage CLSA said in a note that the relaxations could be temporary. But most US-backed Indian pharma stocks, which have fallen 12% to 17% so far this year, are likely to bounce back.