Indoco Remedies plunges 8% after warning letter from USFDA for Goa unit

Shares of Indoco Remedies plummeted up to 8.39 per cent at 312 per share on the BSE in Tuesday’s intraday deals. This came after pharmaceutical company received a warning letter from the top US regulator USFDA for its Goa manufacturing facility. 

 

“This is further to our notification dated October 11, 2024, for receipt of Official Action Indicated (OAI) status from the USFDA for Plant II & Plant III facility located at L 32, 33 - 34 Verna Industrial Estate Area, Verna, Goa, India (“Facility”). Subsequently, the Facility received a warning letter from the USFDA on December 17, 2024,” the company said in an exchange fling on Tuesday.

 

The Goa unit was inspected by the USFDA from July 16, 2024 to July 26, 2024 and was provided the OAI tag, which indicates that a facility is not in compliance with current US drug regulations. A warning letter is typically sent after the regulator is not satisfied with the company’s response to the inspection. 

 

Following the warning letter from the regulator, the company clarified that it remains committed to work closely with the USFDA and continues to enhance its compliance on an ongoing basis. 

 

“We will work with the USFDA to resolve these issues at the earliest. We uphold quality and compliance issues with utmost importance and remain committed to be compliant with CGMP quality standards across our facilities,” it said. 

 

Moreover, the company added that it continues to supply products from the Goa facility to meet its obligations to customers and the patients in the United States of America.

 

The pharmaceutical company reported a 61.40 per cent decline in standalone net profit to Rs 12.79 crore in Q2 FY25, compared to Rs 33.14 crore in Q2 FY24.  

 

Revenue from operations fell 15.18 per cent year-on-year (YoY) to Rs 394.58 crore for the quarter ended 30 September 2024 (Q2FY25). Ebitda for Q2 FY25 stood at Rs 5.29 crore, marking a 26.93 per cent decrease from Rs 7.24 crore recorded in Q2FY24. Consequently, the Ebitda margin reduced to 13.4 per cent in Q2 FY25, down from 15.6 per cent in the same period last year.

 

The company has a total market capitalization of Rs 3,040.17 crore. Its shares are trading at a price to earnings multiple of 36.80 times. 

 

At 12:13 PM; the shares of the company were down 1.16 per cent at Rs 336.65 a piece. By comparison, the BSE Sensex was trading 1.12 per cent lower at 80,835.30 level.