Wockhardt plunges 14% on import alert; Macquarie downgrades

Moneycontrol Bureau Shares of Wockhardt plunged over 14 percent intraday on Monday after its third plant got US Food and Drugs Administration (FDA) import alert. The US regulator has issued import alert on Ankleshwar plant for violating good manufacturing practices.The FDA had inspected the plant in November 2015 and issued certain observations (483s). The import alert possibly implies that the agency is not satisfied with the company's proposed corrective plan. Citi believes immediate financial impact may not be material since Wockhardt's two major formulation plants in India are already subject to US import bans and most of the company's US revenues are being serviced by its plant in the US.The brokerage firm states that the import alert at Wockhardt's API unit at Ankleshwar comes as another setback to the company's efforts to put its regulatory compliance woes behind it. Macquarie has downgraded it to neutral from outperform and reduced target price to Rs 1015 versus Rs 1350 per share. It says Ankleshwar facility receiving under import alert may lead to multiples falling under pressure in the near term. However, it remains bullish on the stock for long term. The drug major's Waluj and Chikalthana plants are already under USFDA import alert. At 09:54 hrs Wockhardt was quoting at Rs 911.00, down Rs 104.60, or 10.30 percent on the BSE. Posted by Nasrin Sultana