Sun Pharma vs Dr Reddy’s vs Lupin shares: Which pharma stock to buy after Trump tariffs?

Pharma stocks witnessed a sharp decline on Friday after US President Donald Trump hinted at upcoming tariffs on pharmaceutical imports. The Nifty Pharma index tumbled over 6%, with major Indian pharma companies taking a hit.

Despite this setback, stock market experts believe the sector remains attractive for long-term investors. With India supplying a significant portion of US generic drugs, the industry’s resilience and growth prospects continue to offer opportunities.

Pharma Stocks Under Pressure

Three of the top Indian pharma stocks - Sun Pharmaceutical Industries, Dr Reddy’s Laboratories and Lupin - were also trading lower on April 4. Sun Pharma share price plunged as much as 6.33%, Dr Reddy’s shares dropped 6.5%, while Lupin stock price cracked 8.4% on Friday.

The slump followed an earlier market session where pharma stocks showed resilience after Trump imposed a 10% tariff on various US imports but temporarily exempted pharmaceuticals. However, the latest tariff warning erased these gains, impacting investor sentiment.

Are Pharma Stocks Still a Good Buy?

Despite the immediate selloff, analysts remain bullish on the pharma sector. India accounts for nearly $10 billion of US drug imports, far less than Europe’s $110 billion, making generics from Indian firms relatively less vulnerable to tariffs.

According to Nuvama Institutional Equities, Indian generics contribute over $400 billion in annual savings to the US healthcare system, making them an indispensable part of the supply chain. The brokerage firm also highlights that Indian companies hold a 47% share in approved ANDAs and a 51% share in tentatively approved ANDAs in CY25, further reinforcing their importance.

Market expert Gaurang Shah, Sr. VP at Geojit Financial Services, sees this as an opportunity rather than a setback.

“We are positive on these three stocks—Sun Pharma, Dr Reddy’s, and Lupin—despite the tariff announcements. India remains the ‘pharmacy of the world,’ and there’s no challenge to its manufacturing capabilities. Investors should consider this dip as a buying opportunity.”

Sun Pharma vs Dr Reddy’s vs Lupin

Sun Pharmaceutical Industries: Sun Pharma share price has seen a 10% decline in year-to-date (YTD) performance and an 11% drop over the past six months. However, the stock has delivered a strong 74% return in two years and a remarkable 352% gain over five years, reflecting its long-term strength.

For the upcoming Q4FY25 results, Sun Pharma is expected to post 22.6% YoY sales growth, with US revenue projected to rise by 11.5% YoY (constant currency) to $531 million, largely driven by its specialty portfolio. Brokerage firm Centrum Broking remains optimistic about the Sun Pharma stock, maintaining a Buy rating with a target price of ₹2,145.

Dr Reddy’s Laboratories: Dr Reddy’s Laboratories share price has declined 19.5% YTD, with the stock also losing 17% in the past six months. Over the past year, Dr Reddy’s shares have dropped 10%, but its two-year return remains positive at 18%, and over five years, the pharma stock has gained 75%.

The company’s US sales growth is projected at just 3% YoY in Q4FY25, mainly due to a muted offtake in Lenalidomide. However, its domestic formulations (DF) sales are expected to grow 21% YoY, supported by the integration of the Sanofi portfolio, which could drive long-term gains.

Lupin: Lupin share price has seen a 17% YTD decline and an 11% drop in six months, mirroring the broader pharma sector’s struggles. However, Lupin shares have delivered a 24% return over the past year and an impressive 200% surge in two years, making it one of the best-performing pharma stocks.

Analysts at Nuvama Institutional Equities have a Buy rating on Lupin stock, with a target price of ₹2,466, citing its strong technical breakout and institutional accumulation as key indicators of further upside potential.

Technical Analysis: Which Pharma Stock is the Best Buy?

According to Anshul Jain, Head of Research at Lakshmishree Investment, Lupin appears to be the strongest bet for both short- and long-term investors.

“Lupin stock price has broken out of a massive 113-month base at ₹1,900, and the recent three-month decline has successfully retested this breakout level. Institutional accumulation is clearly visible on the daily charts. A consolidation phase of 3-4 weeks would strengthen its structure and act as a launchpad for further upside,” Jain said.

As long as Lupin shares hold ₹1,900, a sustained rally towards fresh all-time highs above ₹2,400 is likely in the coming months, he added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.