Granules India shares dived 17% today. Here's why

Shares of Granules India Ltd saw a sharp correction during the trading session on Thursday. The stock slumped 17.07 per cent to hit an intraday low of Rs 562.10. Last checked, it was down 16.67 per cent at Rs 564.80. At this price, the scrip has climbed 37.20 per cent on a year-to-date (YTD) basis.

Today's plunge in the share price came amidst investor concerns over the USFDA inspection which concluded with six observations.

The Hyderabad-based firm, in a BSE filing, said, "In reference to our communication dated September 7, 2024 regarding the completion of the USFDA inspection at our Gagillapur FD facility, conducted from August 26 to September 6, 2024, which concluded with six observations. We acknowledge that several investors have sought clarification."

We want to reassure them that we are actively addressing the observations and are fully committed to resolving the issues raised, Granules India mentioned. "We will work with the USFDA to address the issues raised in the observations," it added.

The scrip saw heavy trading volume on BSE as around 13.78 lakh shares changed hands today. The figure was way more than the two-week average volume of 71,000 shares. Turnover on the counter came at Rs 82.11 crore, commanding a market capitalisation (m-cap) of Rs 13,712.01 crore.

On technical setup, the counter traded lower than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but higher than the 100-day, 150-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 32.75. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 36.52 against a price-to-book (P/B) value of 5.28. Earnings per share (EPS) stood at 18.56 with a return on equity of (RoE) 14.46.

As of June 2024, promoters held a 38.87 per cent stake in the company.