Shares of Aurobindo Pharma rose 6 per cent to Rs 684 on the BSE on Wednesday, gaining 26 per cent in the past two trading days after the US health regulator US FDA reverted its inspection classification of the company’s Unit IV back to voluntary action indicated (VAI), thus relieving the company of any further regulatory action for this manufacturing facility.

With the past two days' rally, Aurobindo Pharma's stock has zoomed 133 per cent in the past one month from the level of Rs 294 on March 23, 2020. In comparison, the S&P BSE Sensex was up 3 per cent during the period.

Aurobindo Pharma, on Tuesday, announced that the US Food and Drug Administration (USFDA) had granted the voluntary action indicated (VAI) status to the company’s Unit 4 inspection that was conducted over November 4 and November 13, 2019.

“The VAI status is expected to benefit the company’s injectables business. This increases the visibility on abbreviated new drug application (ANDA) approvals (47 pending approval) from Unit 4, one of the company’s injectables manufacturing sites,” Motilal Oswal Securities said in stock update.

The brokerage firm said it remains positive on Aurobindo Pharma and expects a 7 per cent earnings CAGR over FY19–22, led by its robust ANDA pipeline and continued momentum in US generics. With the regulatory risk reduced at one of its key sites, it raised PE multiple for Aurobindo Pharma to 12x (from 10x earlier) and revised price target to Rs 745 (from Rs 595 earlier).

At 10:18 am, the stock was up 4 per cent at Rs 668 on the BSE, against 0.39 per cent rise in the S&P BSE Sensex. The counter has seen huge trading volumes with a combined 1.2 million shares changing hands on the NSE and BSE so far. The stock hit a 52-week low of Rs 281 on March 23, 2020 and touched a 52-week high of Rs 838 on April 30, 2019 on the BSE.