Manchanda noted that tariffs are difficult for Indian companies to absorb, but India continues to have an edge. “Even if tariffs are higher in India versus other countries, I would still say India has a significant edge on manufacturing generics at a lower cost,” he said, adding that the impact would be temporary and the industry should be able to manage through it.
On Sun Pharma, Manchanda said the market had not expected any major development. “Expectations were low, so people were not expecting the import dollar to be lifted, and so not incrementally negative,” he said. He added that a lifting of the US import alert on its Halol plant would have supported growth in its generic business, which has been weak for the past few years.
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Despite that, he maintained a positive view on the stock, saying revenue growth over the next four to five years could be in high single digits to mid-teens, depending on speciality launches.
Manchanda highlighted Sun Pharma and Cipla as preferred picks because of their lower dependence on US generics. Sun has about 10-15% of sales exposed to the US market, while Cipla’s exposure is around 30%. But Cipla, he noted, manufactures many of its generic products in the US itself, reducing tariff risk.
He said both companies are better positioned in the current environment, with Cipla’s pipeline expected to deliver in the next one to two years.
For the full interview, watch the accompanying video
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