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Shares of this large-cap pharma stock slipped approximately 3 percent in Wednesday’s trading session after the company received various observations from the United States Food and Drug Administration (USFDA) on its manufacturing plant in Gujarat. In the last six months, the company’s stock gained nearly 65 percent for its holders. 

With a market share of Rs 93,921.88 crores, the stocks of Zydus Lifesciences Limited started their trading session on Wednesday at Rs 958.55 and closed the session at Rs 933.40, slipping approximately 3 percent compared to the previous closing level of Rs 959.55 apiece. 

Such bearish share price movements were observed today after the company, through a recent regulatory filing with the Bombay Stock Exchange (BSE), provided an update on its inspection held at the ‘Injectable Manufacturing’ site of the pharma company situated in Vadodara, Gujarat. 

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The inspection as mentioned above took place from 15th April to 23rd April 2024 and the same was concluded with a set of ‘ten’ observations in the report. The pharma company is working closely with the USFDA to respond to the observations as early as possible. 

During the recent financial quarters, the company’s prime business indicators, viz, its operating revenues as well as after-tax profits, reported movements in opposing directions. 

The former, on one end, increased from Rs 4,369 crores during Q2FY24 to Rs 4,505 crores during Q3FY24, and the latter, on the other end, slipped from Rs 803 crores to Rs 790 crores. 

Historically, the company’s ratio analysis portrays a severe hit to their margins and return ratios. The net profit margins (NPM) slipped from 29.95 percent during FY22 to 11.58 percent during FY23, and the return on equity (RoE), in congruence, decreased from 26.39 percent to 11.19 percent. 

Founded in 1952, Zydus Lifesciences Limited is a specialty and generic drug manufacturing company with a product portfolio including human formulations, active pharmaceutical ingredients, animal health, and wellness products. Some of its brands comprise Falcigo, Nucoxia, Levoday, and Arzep among others.

Written by Amit Madnani 

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