Sun Pharma Shares Dip Up to 2% After FDA Flags Halol Plant

Shares of Sun Pharmaceutical Industries fell up to 2% to touch its intraday low of ₹1,655.70 on June 16, Monday following two announcements by the company over weekend. The company, on Saturday, announced that the US Food and Drug Administration has issued a Form 483 with eight observations after conducting a Good Manufacturing Practices inspection at the company’s Halol facility in Gujarat.

The authority had inspected the facility between June 2 and June 13, Sun Pharma said in an exchange filing. The Halol facility is one of the key plants for Sun Pharma, but it has been under an import alert since December 2022. According to reports, the company had earlier received a warning letter for its Halol unit.

In a separate exchange filing, the company informed that it has appointed Kirti Ganorkar as the managing director of the company, with effect from September 1, for a term of five years. Ganorkar has been heading the India business of the company since June 2019. He will succeed Dilip Shangvi, who will continue to remain the chairman of the board.

UBS has a ‘buy’ rating on Sun Pharma with a price target of ₹2,450. Investors want to evaluate the stock once clarity on US tariffs on branded drugs comes, the brokerage firm said. UBS also highlighted that Sun Pharma has exposure to Israel via Taro.

The pharma company reported a 19% year-on-year decline in consolidated net profit for the March quarter. Even an 8% increase in its revenue could not lift up the profit for the quarter under review. The earnings of the fourth largest global generics pharma company took a hit due to increased input and staff costs, and other expenses.

Apart from these expenses, what actually dragged down the profit for the period were one-time loss and higher tax expenses. Excluding the exceptional items, Sun Pharma’s consolidated net profit has actually risen nearly 5% on year.