Synopsis:
Pfizer Limited gained attention as its U.S. parent secured a three-year tariff exemption by agreeing to cut drug prices and invest heavily in American manufacturing operations.
The company, known for manufacturing and marketing pharmaceutical products, has gained significant attention after its US parent secured a three-year exemption from tariffs imposed by President Donald Trump. This development is expected to boost market sentiment, as reflected in the sharp rally in its stock following the announcement. Let’s dive into the details below.
Pfizer Limited‘s stock, with a market capitalisation of Rs. 23,665 crores, rose to Rs. 5,442, hitting a high of up to 8.06 percent from its previous closing price of Rs. 5,036. However, the stock over the past year has given a negative return of 11 percent.
What Happend
President Donald Trump announced a deal with Pfizer under which the company will lower drug prices in the U.S. by linking them to cheaper prices charged in other developed countries. Pfizer agreed to give Medicaid patients the “most-favored-nation” rate, which means the lowest price available abroad. The drugmaker will also follow this rule for future medicines sold to Medicare, Medicaid, and private insurers.
A key part of the agreement is that Pfizer will not face pharmaceutical tariffs for three years, provided it invests more in U.S. manufacturing. As part of this commitment, Pfizer plans to invest $70 billion to build up domestic production and research facilities. Trump explained that the removal of tariffs is conditional and directly tied to reshoring more of the company’s operations to the U.S.
Trump also warned other drugmakers that if they refuse similar deals, their imported products will face steep tariffs. He recently announced a 100% tariff on branded or patented pharmaceutical imports, starting October 1, but exempted companies that are building manufacturing plants in the U.S. Talks are already underway with Eli Lilly for a similar agreement, as the administration continues pressing global pharma companies to cut drug prices or face tariffs.
Q1 Financial Highlight
Revenue in Q1FY26 stood at Rs. 603 crore, rising 7% YoY from Rs. 563 crore in Q1FY25 and improving 2% QoQ from Rs. 592 crore in Q4FY25. Over the past three years, sales registered a CAGR decline of 4%, signaling muted topline growth despite recent recovery momentum.
Net profit in Q1FY26 came at Rs. 192 crore, up 27% YoY compared to Rs. 151 crore, but declined 42% QoQ against Rs. 331 crore due to a high base. Over three years, profit CAGR stood modest at 2%, while ROE grew at a robust 17% CAGR, indicating efficient capital returns despite flat earnings growth.
Written By Fazal Ul Vahab C
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