Cipla gains in volatile trade after clarification

Cipla rose 0.2% to Rs 401.95 at 11:33 IST on BSE in volatile trade after the company clarified to media report which indicated that the company faces fresh penalty for overcharging.

Meanwhile, the S&P BSE Sensex was up 194.79 points or 0.87% at 22,660.98

On BSE, so far 26,896 shares were traded in the counter as against average daily volume of 2.24 lakh shares in the past one quarter.

The stock was volatile. The stock hit a high of Rs 404.55 and a low of Rs 400 so far during the day. The stock had hit a record high of Rs 450 on 16 September 2013. The stock had hit a 52-week low of Rs 364.05 on 3 June 2013.

The stock had outperformed the market over the past one month till 29 April 2014, advancing 3.67% compared with the Sensex's 0.56% rise. The scrip, however, underperformed the market in past one quarter, falling 3.31% as against Sensex's 8.81% rise.

The large-cap company has equity capital of Rs 160.58 crore. Face value per share is Rs 2.

With reference to the news item appearing in the business daily on 29 April 2014 titled, "Cipla faces fresh Rs 105-cr penalty for overcharging," Cipla after market hours on Tuesday, 29 April 2014 clarified that it has received demand notice of Rs 81 crore in respect of Ciplox eye drops. The company has been complying with the Government prices and therefore the demand notice is erroneous. The company clarified that no fresh demand notice has been received for Cipro injections.

The company has also received a demand notice of Rs 32 crore for the product Alerid D. This demand was raised by the Government despite the fact that this product was not manufactured at all by the company during the period in question, Cipla said.

The company has challenged various price notifications including that of Ciplox eye drops and Alerid D tablets and the Supreme Court of India has already issued an interim order that no coercive steps can be taken against the company to recover the money. The company has also received legal advice that entire amounts demanded by the Government are not tenable and sustainable, Cipla said in a statement.

Cipla's consolidated net profit fell 16.5% to Rs 284.31 crore on 23.3% growth in net sales to Rs 2552.63 crore in Q3 December 2013 over Q3 December 2012.

Cipla is a pharmaceutical company. With over 34 manufacturing units across the country, Cipla manufactures over 2,000 products in 65 therapies. With a turnover of $1.5 billion, Cipla serves doctors and patients in over 170 countries.

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