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India’s pharma sector has slipped badly in the first half of 2025. While the Nifty 50 index recorded an increase of about 8 percent, the Nifty Pharma Index declined by more than 6 percent, which means that the pharma sector has joined the second worst performing sectors in the market. The trust of investors seems to be staggering from this sector, especially due to domestic challenges and global uncertainties.
Shares of big pharma companies fell
The effect of this decline has been seen on almost the entire sector. The stock of Natco Pharma broke around 34 percent, which is believed to be the biggest decline. IPCA Labs also saw more than 20 percent decline. Shares of Aurobindo Pharma, Lupin, Granules India, Mankind Pharma, Ajanta Pharma and Alkem Labs have also fallen between 12 to 20 percent. Even considered strong companies such as Biocon, Cipla, Dr. Reddy’s, JB Chemicals, and Sun Pharma also could not escape the loss.
Some companies showed strength
However, even in this difficult period, some pharma companies have performed better. Laurus Labs gained 19 percent lead, while Abbott India rose by 16 percent. Divi’s Labs and Glenmark Pharma also gained 10 percent and 8.6 percent. Apart from this, names like Torrent Pharma and Zydus Life have also made a minor advantage.
What are the reasons for the decline?
There are many important reasons behind this decline in the pharma sector. First, the large selling of foreign institutional investors (FII) has hurt this sector, especially export-focused companies. The second major reason is the global economic lethargy, America-China trade tension and high interest rates.
The most fear is about American policies. US President Donald Trump has indicated in April and June that he may impose a tariff of up to 25 percent on pharmaceutical products. Since many companies in India export generic and specialty medicines to America, this policy may be overshadowed for them.
What to understand from Nuvama’s report?
Brokerage firm Nuvama Institutional Equites said in its report that big pharma companies are facing risk about American policies and their product mix. However, the company has also said that some areas such as CDMO (Contract Development and Manufacturing Organizations) and GLP-1 drugs are attracting investors.
Strong product pipelines of companies like Cipla, which have products such as Gabraxane and GSYMBICORT, can reduce investors’ anxiety. At the same time, Aarti Pharmalabs, Divi’s, and Dr. in CDMO sector Companies like Reddy’s are getting good response.
Positivity remains in healthcare sector
Nuvama believes that there is a lot of growth in the healthcare infrastructure sector. Companies like Laxmi Dental, Jupiter Lifeline, Suraksha, Aster DM, and Jeena Sikho are increasing the capacity of hospitals and investing in digital tools. This is expected to improve both revenue and profits in the coming time.
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