Sun Pharma falls 6% as USFDA inspects Halol unit; facility contributes 40% of US sales

MUMBAI: Shares of Sun Pharmaceuticals were under selling pressure following reports of a surprise inspection by USFDA officials at its Halol unit.

According to reports, the surprise inspection could be due to increased number of recalls from the plant.

Sun Pharma recently recalled 40,000 bottles of Venlafaxine Hydrochloride extended-release tablets, Gemcitabine and Metformin. All these products are manufactured at its Halol facility.

The facility is important for the company as its contributes to around 40 per cent of US sales and around 25 per cent of consolidated profit of the company.

“Going forward, after the merger with Ranbaxy Labs, its dependence on the region would reduce to around 45 per cent of the expected sales in FY2016. Thus the share of the plant in the overall sales would reduce going forward (expected to be around 10% of sales in FY2016), while profitability could be impacted, given low profitability of Ranbaxy,” said Sarabjit Kour Nangra, VP Research - Pharma, Angel Broking.

“In case of any adverse impact the company could witness a dip of around 15 per cent from these levels. As of now we maintain a neutral view," Nangra added.

At 01:20 p.m.; the stock was at Rs 822.50, down 4.32 per cent, on the BSE. It fell 6 per cent intraday to touch a low of Rs 808.