CHENNAI: India's largest drug maker Sun Pharmaceutical Industries may face a comparatively bigger challenge in the US market after Washington announced a 100 percent import tariff on branded and patented medicines not manufactured in America. While the policy has unsettled several Indian pharma stocks, brokerages and research analysts believe the earnings risk for Sun Pharma remains manageable.
The US is Sun Pharma’s largest market, contributing around 31 percent of its revenue. Of this, nearly $1.1 billion comes from patented and specialty drugs sold in the US, which are potentially exposed to the new tariffs. Leading brokerage HSBC estimates that, if the company fails to adjust its supply chain, there could be an 8–10 percent hit to its earnings in FY26–27.
However, the brokerage notes that Sun Pharma has several options to soften the blow. These include using its existing US facilities more effectively, shifting some production to contract manufacturing partners in the US, and expanding capacity through acquisitions or new projects. The company’s strong balance sheet, with more than $3 billion in cash, gives it financial flexibility to make these moves.
Analysts also pointed out that most Indian drug makers focus on generics, which are not covered under the current tariff structure. Sun Pharma’s greater exposure to patented and branded products makes it more vulnerable than some peers, though the risks remain contained for now.
Market volatility is likely to continue in the near term as investors weigh the policy’s impact and await further clarity from US regulators on exemptions and compliance rules. HSBC has maintained a ‘Buy’ rating on the stock with a target price of Rs 1,850, highlighting that the long-term growth outlook remains intact if supply chain adjustments are executed effectively.
While the tariff move poses a headline risk, the broader concern for the industry will be whether Washington extends the duty to include complex generics or biosimilars, which could have a wider impact across Indian pharma exporters. For now, HSBC expects Sun Pharma to weather the disruption with limited earnings pressure.