Mixed day for pharma; Ipca Labs soars 7%, Laurus Labs tanks 10%

The Nifty Pharma index settled 1.3 percent lower, in sync with the broad based losses across sectors.

On a day of strong selling across the board, pharma stocks ended mixed as stock-specific triggers guided sentiment on October 23. While most pharma stocks were muted, a select few made it to the list of top gainers and losers.

And the winners are... 

The spotlight was on Ipca Labs, which soared 7 percent to hit a 52-week high after the company's unit in Madhya Pradesh’s Ratlam was classified as a voluntary action indicated (VAI) by the US Food and Drug Administration, surprising the Street positively.

After being slapped with 11 observations from the US drug regulator in mid-June, analysts across the board were anticipating a much stricter, Offical Action Indicated (OAI) classification for the unit.

A manufacturer cannot file for new drugs or commercialise products from a site if its classified as OAI, resulting in delays in production and launches.

Ipca investors cheered the respite, sending the stock to newer highs.

Also Read | Ipca Labs hits 52-week high as Ratlam unit's VAI classification positively surprises Street

Aurobindo Pharma, too, figured in the gainers list, rising around a percent after the company received a nod for testosterone cypionate injection, which has an estimated market size of $226.8 million.

Testosterone cypionate is used to treat symptoms of low testosterone in men.

Bitter pill 

On the flipside, Laurus Labs took a beating, nosediving 10 percent after several analysts painted a bleak growth outlook after dismal quarterly earnings.

Jefferies and Kotak Institutional Equities rolled out price targets, which reflected a downside of over 30 percent from the October 20 closing price.

The September quarter was the fifth straight time that the company’s earnings came lower than the Street’s estimates, Jefferies said in a note.

Laurus Labs reported revenue of Rs 1,224 crore in July-September, down 22.3 percent from the year-ago quarter. Consolidated net profit dropped 84.1 percent to Rs 37.12 crore.

Also Read | Laurus Labs Q2 results: Net profit tanks 84.1% to Rs 37.12 crore

Aarti Drugs, too, remained under pressure following the release of weak quarterly earnings in the week gone by. The company also trimmed its revenue growth outlook for FY24 to 5-8 percent from 10 percent, pointing to prolonged weakness. The share slumped 4 percent in the trade.

Other pharma stocks such as Dr Reddy's Labs, Cipla, Torrent Pharma, Biocon and Cipla settled with 1-2 percent cuts, in sync with the strong selling seen across the board. As the heavyweights tumbled, the Nifty Pharma index closed over a percent lower from the previous session.

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