Wockhardt's stock plummets 8% today; not an opportunity to buy

The stock of drug major Wockhardt plummeted 7.9% today on news reports of the company receiving import alert from UK’s drug regulator MHRA on the company’s manufacturing unit in Aurangabad. It emerged as the top loser of the BSE Healthcare Index for the day.

This is the third major jolt to the company, whose stock has already corrected 54% in last three months. In May this year, the company received an import alert from the US FDA for its manufacturing site in Aurangabad resulting in a loss of $ 100 million in revenues for FY14.

With India banning the sale of painkiller dextropropoxyphene last month, it adversely hit the revenues of Wockhardt to the tune of Rs 30-40 crore, since the company is a major seller of the branded version of the drug.

It would not be advisable for investors to consider buying the stock at the current levels given the uncertainty surrounding the regulatory actions being taken on the company and the exact nature of loss of revenues.