The Cadila Healthcare stock put up a strong showing on Tuesday on the clean bill of health received from the US Food and Drug Administration. The stock exchanges were informed that the USFDA had found its facilities at Moraiya to be “acceptable”.
The USFDA had issued a warning letter to the company last year citing non-conformity with its norms.
The scrip closed Tuesday’s session at Rs 836.65, up 4.74 per cent on its previous close of Rs 798.26. The scrip opened the day at Rs 810 and saw volumes of 72,537.
On the NSE, the stock closed at Rs 832.80 as against Rs 799.80 at the end of trade on Monday.
Quant Analysis has reiterated its buy rating on the stock. “We expect Cadila Healthcare’s filings and approvals of injectables from the Moraiya facility to increase given that the US FDA has cleared the facility from violation of safety norms. Also, a number of oral dosage products that were blocked due to the warning letter issued by the FDA in July 2011 will be approved soon, in our view. We expect a large number of approvals to come through in the near term, which will boost US generics sales from 2H FY13. We will review our estimates for US generics sales once the approvals start. We had assumed modest growth in US generics as we were awaiting US FDA clearance. We reiterate ‘buy’ with a PT of Rs 947 based on 20x FY14E earnings,” it said.
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