HSBC has stated that concerns regarding US tariffs on Indian pharmaceutical companies appear overdone, as Indian firms supply 60% of the generic drug volume to the US, playing a key role in cost reduction for the US healthcare system.
Key takeaways from HSBC’s report:
- Indian pharma companies are major suppliers of generic drugs to the US, making them essential for the American healthcare sector.
- A 10% tariff on Indian exports could lead to an EPS cut of 1-6.5% for FY26, with varying levels of impact across different companies.
- Dr. Reddy’s Laboratories (DRL), Lupin, Aurobindo Pharma, Cipla, and Zydus Lifesciences could face challenges under the bear-case scenario.
- Sun Pharma and Torrent Pharma are expected to see minimal impact, given their lower dependency on US sales compared to peers.
Despite potential tariff risks, HSBC believes that Indian pharma firms remain well-positioned, given their strong presence in global generics and critical role in affordable healthcare solutions.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research before making any investment decisions.
