Trump 25% Tariffs: Pharma stocks that may buck the trend and options that lie before them

US President Donald Trump on Wednesday evening announced a 25% tariff rate for Indian exports to the US, along with a penalty, which is yet to be specified, for purchase of oil and other items from Russia.

The news has put the spotlight on Indian Pharma companies, for whom the US is an important export market. White House officials told CNBC-TV18 exclusively that the exemptions on sectors that were part of the earlier reciprocal tariff announcement in April, still stands.

Currently, the Pharma sector is under exemption from reciprocal tariffs that Trump had announced in the month of April. The sector was being investigated under section 232 by the US Department of Commerce, which has now been completed and the US President has said that tariffs on the sector are "coming soon."

As of now, India pays zero tariff on export of generic drugs to the US. In case the 25% tariff is applicable on the Pharma sector too, Indian companies have the following options on the table:

India's unbranded generic pharma companies like Sun Pharma, which also reports results today, Dr. Reddy's Laboratories, Divi's Laboratories, Cipla, Aurobindo Pharma, Lupin and Biocon could see some pressure in Thursday's trading session.

On the flip side, Indian drugmakers with a domestic-oriented portfolio and focus, such as Eris Lifesciences, Ajanta Pharma, Torrent Pharma, hospital stocks like Apollo Hospitals, Fortis Healthcare, Shalby, Aster DM, along with diagnostic names like Dr. Lal Pathlabs, Metropolis and others, could buck the trend as they do not have any export-oriented portfolio / business model.

The Nifty Pharma index ended little changed on Wednesday and has risen 5% in the last one month, with multiple midcap Pharma names such as Eris, Laurus Labs, hitting new highs.