Cipla shares slip 3% as USFDA issues six observations for Goa facility

Shares of Cipla slipped over 3% today after the pharma firm said US Food and Drug Administration (USFDA) inspected its manufacturing facility in Goa from June 10 to June 21 this year. The pharma firm has received six inspection observations documented in Form 483 from USFDA. Cipla shares fell 3.06% lower at Rs 1493.70 on BSE against the previous close of Rs 1540.95 .

The stock opened lower at Rs 1518.55 on BSE. Market cap of the firm fell to Rs 1.22 lakh crore. Cipla stock has a one-year beta of 0.2, indicating low volatility during the period.     

Cipla stock has risen 7.07% this year. In a year, the stock has delivered 41.90% returns. Total 2.11 lakh shares changed hands amounting to a turnover of Rs 28.50 crore on BSE. Cipla stock hit a 52-week low of Rs 897.70 on May 15, 2023 and a 52 week high of Rs 1519 on March 11, 2023 .

In terms of technicals, the relative strength index (RSI) of the stock stands at 60.4 signaling it's trading neither in the overbought nor in the oversold zone. Cipla shares are trading lower than the 5 day, 10 day but higher than the 20 day, 50 day, 50 day, 100 day, 150 day and 200 day moving averages.     

"We hereby notify that the USFDA has conducted an inspection at the company's manufacturing facility in Goa, India from 10th – 21st June 2024. On conclusion of the inspection, the company received six inspectional observations in Form 483," Cipla said in a regulatory filing.

Cipla said that it would work closely with the USFDA to address these observations comprehensively within the stipulated timeframe. "The Company will work closely with the USFDA and is committed to addressing these comprehensively within the stipulated time," the statement added.

Prabhudas Lilladher has maintained its accumulate call with a price target of Rs 1,405. 

"The plant was already under warning with six warnings from previous observations since Feb 2020. gAbraxan approval dependant on Goa, FY26e factored in at $20mn gAbraxane sales. We value the stock at FY26e 15.5x EV/EBITDA and maintain accumulate with a price target of Rs 1,405," the brokerage said.  

Cipla is in the business of manufacturing, developing, and marketing wide range of branded and generic formulations and Active Pharmaceutical Ingredients (APIs). The company has its wide network of manufacturing, trading and other incidental operations in India and International markets.