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Shares of IPCA Laboratories on Wednesday plunged over 10 per cent after a brokerage downgraded the stock and reduced its price target. Shares fell as much as 15 per cent intra-day trading—most in over five years—before recovering even as the BSE Healthcare index and the overall market traded positive.
Foreign brokerage Credit Suisse downgraded Ipca Labs to ‘underperform from ‘neutral’ and lowered its price target for the stock by nearly 20 per cent to Rs 600. Shares of the company ended at Rs 667.6 — after dropping to Rs 635 — down Rs 78.7, or 10.55 per cent. Ipca Labs saw its market value erode by nearly Rs 1,000 crore.
At the NSE, the stock ended at Rs 667, down 10.71 per cent from its previous close. Following the sharp fall in the stock, the company’s market value dipped Rs 994.88 crore to Rs 8,423.12 crore.
In terms of volume, 559,000shares of the company changed hands at the BSE, while over 2.9 million shares were traded at the NSE during the day.
Credit Suisse analysts in their record said that the observations given by the US FDA on the company’s Indore plant are “critical.” The analysts further noted that the US FDA’s observations could delay recovery of Ipca’s US sales.
The consensus price target complied by Bloomberg for Ipca Labs is Rs 850. The stock has a total of 29 ‘buy’ ratings, eight ‘hold’ and two ‘sell’ calls.
