Shares of Zydus Lifesciences Ltd declined 6.92% to ₹839.50 on Friday, falling ₹62.40 from the previous close of ₹901.90, as concerns escalated over the potential imposition of U.S. tariffs on pharmaceutical imports. The stock saw heightened selling pressure amid broader weakness in the pharma sector following remarks by U.S. President Donald Trump.
Trump, while speaking to reporters aboard Air Force One, stated, “Pharma tariffs are going to come in at levels you haven’t really seen before. We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near-future and not too distant future. It’s under review right now.” These comments reversed the temporary relief rally witnessed on Thursday after pharma products were initially excluded from the reciprocal tariff list.
Pharma companies had surged on April 3 after escaping Trump’s initial tariff sweep. However, with the administration now investigating pharmaceuticals under Section 232 of the Trade Expansion Act of 1962, the exemption appears short-lived. This law permits the President to impose trade restrictions on imports that threaten national security.
Citi has cautioned that the ability of drugmakers to pass on tariff-induced costs remains limited. If not absorbed by payors, pharma companies may have to take a hit on margins across the supply chain.
Nomura, in its latest note, estimated Zydus Lifesciences’ U.S. revenue could touch $1.3 billion in FY26 and $1.2 billion in FY27, underscoring its high dependence on the U.S. market. The brokerage noted that Zydus has minimal manufacturing presence in the U.S., which increases its vulnerability to trade barriers. A potential tariff could severely impact profitability if the company fails to pass on costs to end buyers.
Zydus has been actively expanding its U.S. portfolio through complex generics and specialty drugs. However, the recent developments have clouded near-term sentiment.
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