Dr Reddy's Lab slides on regulatory concerns

Dr Reddy's Laboratories fell 3.41% to Rs 2,148.20 at 11:53 IST on BSE after the German drug regulator concluded audit of the company's manufacturing facility in Vishakhapatanam with zero critical and six major observations.

The announcement was made during market hours today, 7 September 2017.

Meanwhile, the S&P BSE Sensex was up 50.50 points, or 0.16% to 31,713.24.

On the BSE, 71,000 shares were traded in the counter so far, compared with average daily volumes of 60,033 shares in the past one quarter. The stock had hit a high of Rs 2,235 and a low of Rs 2,069.10 so far during the day. The stock hit a 52-week high of Rs 3,394.95 on 28 October 2016. The stock hit a 52-week low of Rs 1,901.65 on 11 August 2017.

The stock had outperformed the market over the past one month till 7 September 2017, rising 8.66% compared with 0.42% decline in the Sensex. The scrip had underperformed the market in past one quarter, falling 15.46% as against Sensex's 1.28% rise. The scrip had also underperformed the market in past one year, falling 30.20% as against Sensex's 9.01% rise.

The large-cap company has equity capital of Rs 82.93 crore. Face value per share is Rs 5.

Dr Reddy's Laboratories announced that on 7 September 2017, the Regulatory Authority of Germany (Regierung von Oberbayern), concluded an audit of the company's formulations manufacturing facility in Duvvada, Vishakapatnam, with zero critical and six major observations. Products manufactured at the facility are not currently exported to the European Union (EU). The company said it will submit a Corrective and Preventive Action plan (CAPA) to the authorities. The auditor has cautioned that the facility will receive European Union Good Manufacturing Practice (EU-GMP) certification from the regulator upto November 2018 only when the Regulator approves the CAPA. The facility's compliance with the CAPA and other applicable regulations will be reviewed again by the regulator by the November 2018 for continuation of the facility's EU-GMP certification.

On a consolidated basis, Dr Reddy's Laboratories' net profit declined 56.6% to Rs 66.60 crore on 2.5% rise in net sales to Rs 3315.90 crore in Q1 June 2017 over Q1 June 2016.

Dr Reddy's Laboratories is an integrated global pharmaceutical company.

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