Dr Reddy's Labs tanks over 3% after USFDA inspects Hyderabad API facility

Dr Reddy's Laboratories share price fell up to 3.2 per cent at Rs 1,175 per share on the BSE in Thursday’s intraday trade after a regulatory setback at its Hyderabad manufacturing facility. 

 

On Tuesday, the company in an exchange filing disclosed that the United States Food & Drug Administration (USFDA) issued a Form 483 with seven observations to the company’s Hyderabad manufacturing facility. 

 

“This is to inform you that the United States Food & Drug Administration (USFDA) today completed a GMP inspection at our API manufacturing facility (CTO-2) in Bollaram, Hyderabad. We have been issued a Form 483 with 7 observations, which we will address within the stipulated timeline,” the company said in the filing. 

 

The GMP inspection was conducted from 13th November, 2024 to 19th November, 2024. Hyderabad based Dr Reddy’s Laboratories is a pharmaceutical company specialising in the manufacturing and marketing of a diverse range of medicines. Its portfolio includes over 200 products, spanning APIs, generics, branded generics, biosimilars, and over-the-counter (OTC) products.

Q2 results

For the second quarter of financial year 2024-25 (Q2FY25), Dr Reddy's Labs reported a 15 per cent decline in consolidated net profit at Rs 1,255 crore for the second quarter, compared to Rs 1,480 crore in the year-ago period.

 

Revenue from operations grew 17 per cent year-on-year to Rs 8,016 crore during the July-September 2024 quarter. Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 5 per cent year-on-year to Rs 2,280 crore, with margins showing a slight improvement to 28.4 per cent.

Dr Reddy's Labs share price history

The company’s stock has underperformed the market year to date as it has risen 3 per cent, while gaining 6 per cent in the last one year. In comparison BSE Sensex has risen 6.5 per cent year to date and 16.8 per cent in a year. 

 

The company has a total market capitalisation of Rs 1 trillion. Dr Reddy's Labs shares are trading at a price to earnings multiple of 4.17 times and at an earning per share of Rs 288.19. 

 

At 11:25 AM; the shares of the company were down 0.92 per cent higher at Rs 1,202.80 a piece. By comparison, the BSE Sensex was down 0.67 per cent at 77,060.38 level.