Credit Suisse downgrades Ipca Labs; stock plunges 15%

MUMBAI: Shares of pharmaceutical company Ipca Laboratories plunged nearly 15 per cent in trade after Credit Suisse downgraded the stock to ‘Underperform’ from ‘Neutral’ and lowered its target price.

According to the brokerage, adverse FDA action is likely at the company’s Ratlam API and Indore SEZ plant. The 483 observations are critical and may delay US sales recovery, it said.

Credit Suisse is of the view that there are 6 observations on Indore SEZ in Form 483 out of which 2 are critical observations.

The company had received inspection observations in Form 483 from the USFDA in the month of July. Following the observations, API shipments to the US market were temporarily suspended from its Ratlam plant.

The brokerage has lowered its target price to Rs 600 from Rs 740 post critical 483 observations

At 09:30 a.m.; the stock was at Rs 668, down 10.49 per cent, on the BSE. It plunged 14.91 per cent to touch intraday low of Rs 635.