Shares of Zydus Lifesciences Ltd surged 5.25% to ₹937.95 on April 3, emerging as one of the top gainers in early trade, after U.S. President Donald Trump’s reciprocal tariff policy excluded pharmaceutical products from the 26% duty on Indian goods. The relief sparked a sentiment-led rally in India’s generic pharma sector.
As part of the “Liberation Day” tariff plan announced on April 2, Trump imposed a broad 26% tariff on Indian imports, citing unfair trade practices and currency manipulation. However, a White House factsheet later clarified that pharmaceuticals, semiconductors, copper, and lumber would not be subject to these duties.
Brokerages including Jefferies and CLSA took a cautiously optimistic view, noting that generic medicines are critical to the U.S. healthcare system, and imposing tariffs on them could raise drug prices domestically.
Nomura, in its latest sectoral review, projected Zydus Lifesciences’ U.S. revenues to reach $1.3 billion in FY26 and $1.2 billion in FY27, highlighting the company’s high dependence on U.S. sales and very limited production footprint in the United States. The brokerage warned that should tariffs be introduced later or if exemptions are revoked, earnings could be significantly impacted as Zydus may have to absorb some of the cost burden.
Zydus has consistently focused on its U.S. business through complex generics, injectables, and specialty drugs, making the tariff exemption vital for sustaining its margins and competitiveness.
The stock’s rally came on the back of renewed investor confidence in the short-term outlook, with market cap nearing ₹947 billion, and trading range peaking at ₹949.65 intraday.
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