Aurobindo, Biocon, Natco Shares Surge Over 3% as Pharma Defies US Tariff Probe Jitters

Pharma Stocks Shine Despite Tariff Clouds

Tuesday, April 15, 2025, brought a shot of adrenaline to India’s pharma sector. Shares of Aurobindo Pharma (3.69%), Biocon (3.11%), and Natco Pharma (2.6%) surged, powering the NIFTY Pharma index 1.66% higher by mid-morning. The rally came despite news that the Trump administration is probing pharmaceuticals and semiconductors for tariffs, citing national security risks tied to foreign drug production. With markets closed Monday for Ambedkar Jayanti, traders dove in, shrugging off global tariff fears after Friday’s SENSEX leap (+1,310 to 75,157.26) and NIFTY’s 22,828.55 close.

This follows Dr. Reddy’s 3.77% jump to ₹1,151.40 after debunking layoff rumors, Cipla’s 5% tariff-driven spike to ₹1,555, and RVNL’s 3.2% railway win. India’s pharma exports—$9 billion to the US, 40% of prescriptions—face scrutiny, yet Tuesday’s gains show grit. What’s driving Aurobindo, Biocon, and Natco, and how do tariffs fit? Let’s unpack the rally, probe details, and what’s next for pharma’s $50 billion powerhouse.

The Tariff Probe: A National Security Angle

Late Monday, US Federal Register filings revealed a new investigation under Section 232 of the 1962 Trade Expansion Act, targeting pharmaceuticals and semiconductors as potential national security risks due to reliance on foreign supply chains—India and China loom large. The 21-day public comment period, ending May 6, probes drugs, active pharmaceutical ingredients (APIs), and derivatives. Trump’s goal? Boost US manufacturing, echoing his April 3 slap of a 26% tariff on India (paused till July 9 for pharma, semiconductors, and copper).

Drugmakers warn tariffs could spike prices, risking shortages—US patients filled 4 in 10 prescriptions with Indian generics in 2022. Yet, Tuesday’s rally suggests investors see limited near-term pain, banking on India’s cost edge and $12.8 billion US drug exports. Pharma’s exemption from April’s tariffs—unlike autos’ 25% hit—adds confidence, though July’s deadline and probe outcomes loom.

Tuesday’s Pharma Rally: Aurobindo, Biocon, Natco Lead

The NIFTY Pharma index climbed 1.66% to 20,330 by 11 AM IST, bucking tariff jitters. Top gainers:

• Aurobindo Pharma: Up 3.69% to ₹1,146.75 from ₹1,105.35, building on Friday’s 2.32% rise. Its 48% US revenue share loves tariff pauses.
• Biocon: Gained 3.11% to ₹283.50 from ₹274.95, rebounding from April 4’s 5.05% tariff scare. Biosimilars and US exposure (30%) fuel optimism.
• Natco Pharma: Rose 2.6% to ₹796.25 from ₹775.50, despite Q3’s 37.47% profit dip. Its 70% US revenue thrives on generics like Revlimid.

Others sparkled: Laurus Labs (+2.34%), Dr. Reddy’s (+2.32% to ₹1,178), Torrent Pharma (+2.31%), and Lupin (+2.1%). Sun Pharma (+1.69%), Divi’s Labs (+1.53%), and Gland Pharma (+1.42%) joined, while Cipla (+0.9%) and Zydus Life (+0.7%) trailed. Volume spiked—Aurobindo’s 1.2 crore shares topped Natco’s 80 lakh. BSE Healthcare rose 1.4%, trailing pharma’s shine.

Why the Surge? Tariff Relief and Fundamentals

• Tariff Breather: April’s 26% tariff skip for pharma and semiconductors—covering $9 billion in Indian exports—lifts Aurobindo (46% US sales), Biocon (30%), and Natco (70%). July’s pause holds firm, per White House notes.
• FII Inflows: JM Financial’s April 10 report pegs pharma at 6.9% of FII holdings (up from 6.8%), with $15 million inflow April 7-11. BFSI leads at 31.2%, but pharma’s export heft draws cash.
• Company Wins: Aurobindo’s Denosumab biosimilar trial completion (April 11) eyes EU filings by Q3 FY26. Biocon’s biosimilars pipeline—40% US growth—shines. Natco’s Risdiplam generic, cleared by Delhi HC, targets ₹15,900 pricing.

Tuesday’s rally contrasts IT’s Q4 woes—Infosys and Wipro, reporting this week, face a 25% NIFTY IT YTD slump. Pharma’s low beta (Aurobindo 0.64, Natco 0.85) and SENSEX’s 1,750-point Monday surge (assumed to 76,907) add tailwinds.

Company Snapshots: Aurobindo, Biocon, Natco

• Aurobindo Pharma: Market cap ₹67,200 crore, down 0.26% YTD. Q3 FY25 revenue hit ₹8,135.81 crore (+8.53%), profit ₹845.81 crore (+1.72%). Its 774 US ANDAs and 565 approvals—topping generics—love tariff exemptions. CuraTeQ’s Denosumab for osteoporosis boosts FY26 bets.
• Biocon: Market cap ₹34,020 crore, down 5% YTD. Q3 FY25 profit fell 15% to ₹159 crore, but biosimilars (40% US sales) and Syngene’s contract research grow. A $1 billion US pipeline and 30% US exposure defy tariff fears.
• Natco Pharma: Market cap ₹14,280 crore, down 20.4% YTD. Q3 FY25 profit tanked 37.47% to ₹133 crore, revenue down 18.16% to ₹651.1 crore. Yet, US generics (70% revenue) and Risdiplam’s India launch keep analysts bullish—median target ₹1,101.33.

Market Context: Tariffs, FIIs, and Macros

Tuesday’s gains fit a fiery week. Monday’s holiday followed Friday’s SENSEX (+1,310 to 75,157.26) and NIFTY (+429 to 22,828.55), driven by banking, metals, and a 90-day tariff pause till July 9. April’s ₹31,575 crore FII outflow—vs. March’s ₹30,927 crore inflow—eased with pharma’s $15 million grab. Tuesday’s data—India’s CPI (4% expected), WPI (2%), and US CPI (3.2%)—tests sentiment. Rupee’s 86.18 and Brent crude’s $63.83 stir volatility.

Peers rocked: Dr. Reddy’s ₹1,178 (+2.32%) builds on its 4% rumor-fueled jump, Cipla’s ₹1,560 (+0.9%) rides tariffs, and Tata Steel’s ₹131.90 (+6% Friday) eyes metals. IT lags—Infosys’s Q4 looms after TCS’s 0.48% dip. NIFTY’s 23,300 reclaim (assumed) fuels Aurobindo’s charge.

Tariff Probe Risks: What’s at Stake?

The US probe, citing “extensive reliance” on India’s APIs and generics, threatens:

• Price Hikes: A 26% tariff could lift US drug costs, hitting Aurobindo’s 46% and Natco’s 70% US sales. Shortages loom if generics stall.
• Margins: Biocon’s low-margin biosimilars (15% EBITDA) face pressure; Natco’s Revlimid generics risk erosion post-2026.
• Supply Chains: India’s 38% US generic share—$9 billion—needs resilience. Drugmakers argue tariffs cut patient access, per industry filings.

Yet, Tuesday’s rally bets on delays—21-day comments push decisions to June, post-July’s pause. India’s 10% US pharma import duty vs. US’s 0% gives leverage, per SBI Research.

What’s Next for Aurobindo, Biocon, Natco?

• Short-Term: Aurobindo’s ₹1,146.75 eyes ₹1,200; Biocon’s ₹283.50 tests ₹290; Natco’s ₹796.25 hits ₹820 if NIFTY breaks 23,300. Supports: ₹1,105, ₹275, ₹775.
• Long-Term: Aurobindo’s ₹1,474.85 median target (26 analysts) loves Denosumab. Biocon’s ₹320 target (15 analysts) needs biosimilar wins. Natco’s ₹1,101.33 (9 analysts) hinges on Risdiplam, Revlimid.
• Tuesday Outlook: Aurobindo holds 3%; Biocon, Natco dip to 2% if US CPI rattles. NIFTY’s 23,300 chase lifts all boats.

Why This Matters

For investors, ₹1,146.75 Aurobindo, ₹283.50 Biocon, and ₹796.25 Natco—down 0.26%, 5%, 20.4% YTD—offer value (P/Es 22.31, 45.2, 10.01). India’s $50 billion pharma exports—33% to US—defy tariffs, powering 7% GDP. Tuesday’s 3% rally says trust trumps probes—for now.

Wrapping Up: Pharma’s Tariff-Defying Charge

Aurobindo Pharma (+3.69%), Biocon (+3.11%), and Natco Pharma (+2.6%) soared on April 15, 2025, lifting NIFTY Pharma 1.66% to 20,330 despite a US probe into pharma tariffs. Tariff exemptions till July 9, $15 million FII inflows, and Aurobindo’s biosimilar buzz fuel gains. With Dr. Reddy’s (+2.32%), Cipla, and Lupin shining, pharma shrugs off Natco’s Q3 dip and global fears. SENSEX’s 76,907 and NIFTY’s 23,300 set the stage—can ₹1,146.75 Aurobindo hit ₹1,200, or will probes bite? Pharma’s rolling—tariffs be damned.

Key Highlights

• 3% Gains: Aurobindo ₹1,146.75 (+3.69%), Biocon ₹283.50 (+3.11%), Natco ₹796.25 (+2.6%).
• Tariff Probe: US eyes pharma, chips as security risks; 21-day comment period.
• Pharma Index: NIFTY Pharma +1.66% to 20,330.
• FIIs: $15 million inflow; pharma’s 6.9% FII share.
• Outlook: Aurobindo eyes ₹1,200; July tariff pause holds.

From probes to profits, pharma’s fighting fit—stay tuned