Cipla shares tumble after inspection reveals data issues
2023.11.24 01:22
© Reuters.
MUMBAI – Shares of Indian pharmaceutical giant Cipla faced a sharp decline of 7.6% on the National Stock Exchange (NSE) Thursday amid serious quality control concerns. The dip came after an inspection uncovered data integrity issues and microbial contamination at the company’s Pithampur facility, which led to product complaints.
In response to these findings, HSBC cut Cipla’s share price target today to ₹1,425 from ₹1,440, albeit maintaining a “buy” rating. The financial services firm cited potential incremental costs that Cipla may incur in addressing the problems identified during an inspection in February 2023. This inspection resulted in eight Form 483 observations, a notification issued by the FDA to inform companies of violations that the agency has discovered during its inspections.
Despite recent challenges, Cipla has seen its shares rise by 9.6% year-to-date, slightly outperforming the Nifty’s gain of 8.8%. Analysts remain optimistic about the company’s prospects for significant sales growth in the United States market between FY24-26, driven by strong performance from key marketed products. However, navigating the current regulatory hurdles will be crucial for maintaining this growth trajectory.
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