Cipla’s stock dropped more than 7% on Thursday after the US FDA issued a warning notice to the company’s Pithampur plant. The stock failed to hold above the swing high of the August month and may underperform in the near term.
Cipla’s share price today started at an intraday high of 1,272.95 per share on the BSE.
Cipla’s share price fell more than 7% on Thursday, wiping away the previous two weeks’ gains, following the delivery of a warning letter from the US Food and Drug Administration (US FDA) to the company’s Pithampur business on Saturday, November 18.
Cipla‘s share price today started at an intraday high of 1,272.95 per share on the BSE. Cipla has emerged as the Nifty 50’s top laggard thus far today.
According to technical experts, Cipla shares have fallen after failing to hold above the August month swing high of roughly 1,280, although the drop is mostly due to news.
“Prices rose in the previous three sessions, but today’s weakness erased the previous two weeks’ gains.” As of now, 1160-1150 is the next support level, and fresh longs should be avoided as long as there are base or reversal indicators,” said Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One.
Cipla stock has dropped owing to unfavorable news flows, according to Ruchit Jain, Lead Research Analyst at 5paisa.
Technically, it has substantial resistance at 1280, and the stock may underperform in the short run.
According to the company’s November 18 exchange filing, it got a warning notice from the US FDA on November 17 about a regular current good manufacturing practices (cGMP) inspection at its Pithampur manufacturing plant from February 6-17, 2023.
“This warning letter summaries contraventions regarding methods or controls followed at the facility which do not conform to the prescribed cGMP regulations and contains directional guidance for necessary corrections,” the business stated in a statement.
To preserve ongoing compliance, the firm will respond to the warning letter within the time periods specified and will collaborate closely with the US FDA to resolve the concerns comprehensively and expeditiously.
“We respect quality and compliance with highest care and remain determined to be compliant with the cGMP quality standards,”added the organization.
According to the February 18 exchange filing, the US FDA performed a cGMP inspection at the company’s Pithampur production site from February 6-17, 2023. At the completion of the inspection, the firm received eight inspectional observations on form 483.
