Dr Reddy's hits 52-week high as USFDA concludes PAI at Srikakulam unit with zero observations

Dr. Reddy's Laboratories building

Shares of Dr Reddy's Laboratories rose one percent in early trade to hit a 52-week high of Rs 5,293.50 on July 20 after the US Food and Drug Administration concluded a pre-approval inspection (PAI) and a routine GMP (Good Manufacturing Practices) inspection at its facility in Srikakulam, Andhra Pradesh.

The inspection at the Srikakulam facility, which manufactures APIs (Active Pharmaceutical Ingredients), concluded with zero observations and a No Action Indicated (NAI) classification. The facility was inspected between July 10-19, 2023.

Consequently, at  09.20 am, shares of Dr Reddy's Laboratories were trading 1.1 percent higher at Rs 5,280 on the National Stock Exchange.

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Earlier this week, shares of the company had risen after the drug maker signed an agreement to buy a 26 percent stake in special purpose vehicle O2 Renewable Energy IX Private Limited.

Meanwhile, investors remain focused on the company's earnings for the April-June quarter, due to be released on July 26. Most brokerages anticipate an increase in the drugmaker's earnings for the quarter largely aided by strong US sales. The strong performance in the US market is expected to be led by market share gains in the generic of Suboxone, better traction in the generic of Revlimid, and the newly acquired Mayne Pharma's portfolio.

Moreover, the acquisition of Mayne Pharma also completed in the first week of April, hence the quarterly earnings would also reflect around three months of sales from the newly acquired portfolio. Along with that, Incred Equities also expects the company to post an improvement on the margin front.