Angel recommends 'Sell' on Ranbaxy Laboratories
Angel Broking has recommended a sell rating for Ranbaxy Laboratories after a warning was issued against the company from US FDA for its Ohm facility.
By ET Bureau |
MUMBAI: Angel Broking has recommended a ‘Sell’ call on Ranbaxy Laboratories after a warning was issued against the company from US FDA for its Ohm facility.
"The US FDA has issued a warning letter to one of Ranbaxy’s three plants in Ohm Labs (a liquid manufacturing plant at Gloversville, NY) for non compliance of cGMP. To address the issue, the company has now hired a consulting firm. As per the management, the plant accounted for less than 10 per cent of its US sales (2-3 per cent of its total sales) and most of its FTFs have been filed from the other two plants at Ohm labs, which did not have material deviations.
Though the financial impact of this event is likely to be minimal, it seems that the company’s ongoing issues with the US FDA are far from over and could affect the sentiment, as the market was placing increasing confidence in an early resolution of the existing regulatory issues (Dewas and Poanta Sahib). The stock is trading at EV/Sales of 2.9x CY2010E. We recommend a Sell, with a target price of Rs 333,” the report said.
"The US FDA has issued a warning letter to one of Ranbaxy’s three plants in Ohm Labs (a liquid manufacturing plant at Gloversville, NY) for non compliance of cGMP. To address the issue, the company has now hired a consulting firm. As per the management, the plant accounted for less than 10 per cent of its US sales (2-3 per cent of its total sales) and most of its FTFs have been filed from the other two plants at Ohm labs, which did not have material deviations.
Though the financial impact of this event is likely to be minimal, it seems that the company’s ongoing issues with the US FDA are far from over and could affect the sentiment, as the market was placing increasing confidence in an early resolution of the existing regulatory issues (Dewas and Poanta Sahib). The stock is trading at EV/Sales of 2.9x CY2010E. We recommend a Sell, with a target price of Rs 333,” the report said.
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