Cipla tanks 8% despite better Q2 nos; Lupin post warning letter drags Nifty Pharma 5%

Moneycontrol News

Cipla share price fell as much as 8 percent on Tuesday despite better-than-expected earnings for the quarter ended September 2017, dented by weak sentiment after Lupin received warning letter for two sites.

Lupin was biggest loser among pharma stocks, falling more than 18 percent intraday to hit multi-year lows after the company said it has received a warning letter issued by the USFDA on November 6, for formulation manufacturing facilities at Goa and Indore (Pithampur Unit II).

The news hurt sentiment across pharma stocks. The Nifty Pharma index fell more than 5 percent intraday.

Earlier Lupin had received three Form 483 observations in Goa in April 2017 and six Form 483 observations in Pithampur (Unit II) in May 2017. It has responded to all the observations.

Meanwhile, Cipla has reported better-than-expected consolidated profit growth of 17.7 percent for the quarter ended September 2017, year-on-year, driven by strong operational performance and other income.

Revenue from operations rose 8.8 percent while operating profit grew by 18.2 percent and margin expanded 160 basis points YoY.

Numbers were ahead of estimates. Profit was estimated at Rs 414.7 crore on revenue of Rs 4,008.8 crore and EBITDA was expected at Rs 751.3 crore with margin at 18.7 percent, according to average of estimates of analysts polled by CNBC-TV18.

Last week, the Pharma index had gained 2.6 percent, aided by the positive sentiment from Divis Labs which said the USFDA would be lifting the import alert 66-40 and moving to close out the Warning letter issued to the company's Unit-II at Visakhapatnam.