IPCA Labs slips over 8% on USFDA import alert for Ratlam plant

MUMBAI: Shares of IPCA Laboratories came under selling pressure in a strong market and plunged as much as 8.4 percent in trade on Friday, after the company got USFDA import alert for Ratlam plant.

At 10:15 a.m.; the stock was at Rs 668, down 4.4 per cent, on the BSE. It touched a high of Rs 681.05 and a low of Rs 640.10 in trade today.

According to analysts, this alert means that the plant is not in compliance and IPCA will have to go through remediation process post which USFDA will come and inspect the plant once again. All this could take between 1-2 years.

FDA had issued Form 483 to Ratlam API in mid 2014. In form 483s, FDA pointed out data integrity issues at Ratlam plant.

Ratlam is the only USFDA approved API plant and thus US revenues will get impacted following the alert.

Import alert is a big negative for IPCA and resolution of import alert can take a while. FY17 consensus EPS estimate is seen down 15-20 per cent.