Shares of Sun Pharmaceutical Industries hit over 3-month high as the supply restrictions imposed on its Halol plant by the US Food and Drug Administration have been lifted.
The stock gained as much as 3.8 per cent to Rs 560.95, highest since March 6. The stock was the top percentage gainer on the broader NSE index.
Shares of its research arm Sun Pharma Advanced Research Company Ltd jumped as much as 5.5 per cent to Rs 438, their highest since February 27.
The company had said on Tuesday that it has received the establishment inspection report from the US Food and Drug Administration for the Halol unit. The inspection is now closed and issues raised in the December 2015 warning letter have been addressed.
The company will now be able to resume shipments of drugs made at its Halol plant in Gujarat, which contributed as much as 15 per cent to its US revenue in 2015.
Citi Research says: “We expect reasonable number of good approvals going forward and a couple of SPRC pipeline products could be approved as these were held up primarily due to compliance issues at Halol.’’ The brokerage has maintained “neutral” rating on Sun Pharma, and has kept the price target at Rs 520.
About 15 out of 39 analysts covering the stock have a “buy” or higher rating, 12 have “hold” while 12 rate it at “sell” or lower; their median price target is Rs 513, according to Thomson Reuters Eikon data.
More than 3 million shares changed hands against 30-day moving average of 7.2 million. Up to Tuesday's close, Sun Pharma stock had fallen 28.3 per cent since the FDA issued a “warning letter” to the company for violating manufacturing standards at its Halol plant in December 2015.