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Dr Reddy’s Labs shares drop after US FDA gives VIA tag to Vizag facilities

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Dr Reddy’s Labs shares drop after US FDA gives VIA tag to Vizag facilities

2 min read Last Updated : Aug 12 2024 | 2:27 PM IST


Shares of Dr Reddy’s Laboratories slipped up to 2 per cent at Rs 6,875.05 per share on the BSE in Monday’s intraday trade. This came after the United States Food and Drug Administration (USFDA) issued an establishment inspection report (EIR) to the company, for its manufacturing facilities (FTO-7 and FTO-9) in Duvvada, Visakhapatnam, Andhra Pradesh. 


In May, this year the Hyderabad-based pharmaceutical major intimated that an inspection was conducted by the US FDA at these facilities. Further to that, the company has now said that the US FDA has classified the inspection as ‘Voluntary Action Indicated’ (VAI) and concluded that the inspection is closed. 


A ‘VAI’ status means that objectionable conditions were found, but the regulator is not prepared to take or recommend any administrative or regulatory action. In contrast an, Official action indicated (OAI) status,means regulatory and administrative actions are recommended, according to the US FDA. 


Q1FY25 performance 


Dr Reddy’s Laboratories (DRL) reported a 0.90 per cent year-on-year (Y-o-Y) decline in profit after tax (PAT) to Rs 1,392.4 crore for the first quarter of financial year 2024-25 (Q1FY25). In contrast, revenue from operations grew by 13.88 per cent Y-o-Y, reaching Rs 6,757.9 crore.


Sequentially, the company saw an 8.18 per cent increase in revenue, while PAT rose by 6.31 per cent. Growth was largely driven by the Global Generics (GC) business, with notable contributions from North America and India.


The GC segment achieved significant growth, with revenues hitting Rs 6,890 crore, marking a 15 per cent Y-o-Y and a 13 per cent quarter-on-quarter (Q-o-Q) increase. This growth was fueled by higher sales volumes from new product launches and the integration of a newly acquired vaccine portfolio in India. 


The Indian market saw a 15 per cent Y-o-Y and an 18 per cent Q-o-Q revenue increase, largely due to the introduction of new products, including the recently in-licensed vaccines.


Dr Reddy’s Labs is presently trading at a price to earnings multiple of 28.41 times, while trading at an earning per share (EPS) of Rs 246.95.


At 02:21 PM; the stock price of the company was trading 1.74 per cent higher at Rs 59.60 per share on the BSE. By comparison the BSE Sensex surged by 0.36 per cent at 79,994 levels.

First Published: Aug 12 2024 | 2:26 PM IST

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