Granules India Ltd has received a Warning Letter from the US Food and Drug Administration (FDA) for its Gagillapur facility, following an inspection conducted in August 2024. The pharmaceutical firm, in a regulatory filing on February 27, stated that while the facility remains classified as "Official Action Indicated" (OAI), the regulator has not signalled any further escalation.
The development may temporarily delay the approval of pending product submissions from the site, but existing manufacturing and distribution operations remain unaffected. Granules India has assured that it will respond to the FDA within the stipulated timeframe and seek a meeting to demonstrate the progress made in compliance efforts.
The Warning Letter highlights four key concerns from the initial six observations noted in the FDA’s Form 483. Granules has claimed significant progress in addressing these issues, with most corrective measures completed and the remaining ones on track. The company has also been providing monthly updates to the regulator.
Following the inspection last year, the company had voluntarily paused production and dispatches in September 2024 to conduct a thorough risk assessment. It has since implemented a comprehensive remediation plan, including corrective and preventive actions (CAPAs), oversight from independent consulting firms, and continuous product testing.
Despite regulatory challenges, Granules remains optimistic about its long-term growth prospects, citing new product launches from its GPI facility in the US, capacity expansion at Genome Valley, increased production in Europe, and an expanding oncology pipeline from Unit V.
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In Q3, the company registered a 6.4 percent year-on-year fall in net profit to Rs 118 crore. It reported a decline of 1.5 percent in revenue at Rs 1,137.6 crore, as against Rs 1,156 crore in the corresponding quarter of the previous financial year. The EBITDA stood 8 percent lower, at Rs 230.2 crore, compared to Rs 250.4 crore in the same quarter of previous financial year, while the margin dropped to 20.2 percent in Q3 FY25 from 22 percent in Q3 FY24.
Shares of the company closed at Rs 507, lower by 1.52 percent from the last close on the NSE. Granules India shares have tanked 14 percent since the start of the year.
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