Sun Pharma slips 3% after OAI status from USFDA for Dadra facility

Shares of Sun Pharmaceutical Industries slipped 3 per cent to Rs 1,559.45 in Friday’s intra-day trade on the BSE after the US drug regulator classified the pharma major's Dadra facility as Official Action Indicated (OAI). OAI means regulatory or administrative actions are recommended.

In an exchange filing Sun Pharma said, the US Food and Drug Administration (USFDA) conducted an inspection at the company's Dadra facility from December 4, 2023 to December 15, 2023. The US FDA has subsequently determined the inspection classification status of this facility as OAI.

At 09:34 am; Sun Pharma was trading 1.5 per cent lower at Rs 1,581.10, as compared to 0.12 per cent decline in the S&P BSE Sensex.

Meanwhile, thus far in the current calendar year 2024, Sun Pharma has outperformed the market by surging 26 per cent, as compared to 3.6 per cent rise in the benchmark index. The stock had hit a record high of Rs 1,638.70 on April 5, 2024.

Analysts at Incred Research Services build in some moderation in the US generics business as well as Taro, as reflected in the secondary data. The brokerage firm in the Q4FY24 result preview said it also expects a marginal moderation in the specialty business after a strong Q3FY24, which benefited from seasonality. India business growth should be around 11 per cent YoY. Analysts expect some moderation in margins, in line with the sequential moderation in specialty sales.

However, analyst at KRChoksey Shares and Securities expect Sun Pharma’s global specialty segment sales growth to get a boost from the recent additional marketing approval for Winlevi in Australia.

The brokerage said they therefore increased Sun Pharma’s sales and net income estimates to 10.9 per cent and 16.0 per cent CAGR, respectively from 10.6 per cent and 15.3 per cent CAGR, respectively.

The company has seen steady growth in revenue and net income over the last few quarters on the back of strong growth witnessed in specialty revenue. The speciality growth now corresponds to 19.2 per cent of overall sales as of Q3FY24 vs. 16.5 per cent in Q3FY23 and 16.4 per cent in Q2FY24 and market outperforming growth in IPM.