Sun Pharmaceutical Industries Ltd continues to struggle with observations from the US Food and Drug Administration (US FDA) for its Halol plant. As a result, a recovery in the stock could be prolonged. The stock has been consolidating at current levels of about Rs 425 for the past two years.
Though it has received eight observations for its Halol unit, some analysts see most of the observations as procedural. “Most of the observations are procedural except the 2nd observation which mentions the potential for alterations in sample data and information which might be considered serious,” said Motilal Oswal Securities.
However, the company is expected to incur expenses to resolve these issues. The company will require comprehensive explanations and responses, according to the analyst. This means that the company will have to spend considerably to ramp up procedures and facilities at this plant.
Read EquityPandit’s Nifty Pharma Outlook for the Week