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Sun Pharma stock closes over 8% higher, top gainer on Sensex

Sun Pharma stock closes over 8% higher, top gainer on Sensex

VAI status means that though objectionable conditions were found at the plant, the issues do not justify further regulatory action and any corrective action is left to the FDA to take voluntarily.

The Sun Pharmaceutical Industries stock rose today after USFDA issued VAI status to its Halol plant. The stock closed 8.13% or 39.70 points higher at 528 level on BSE.  It was the top Sensex gainer in trade today.  VAI status means that though objectionable conditions were found at the plant, the issues do not justify further regulatory action and any corrective action is left to the FDA to take voluntarily. 

A Sun Pharma spokesman said the company was assessing the FDA update. The drugmaker has faced regulatory scrutiny over manufacturing standards violations at its Halol plant, its key factory in Gujarat.

Analysts believe that this development brings the company closer to obtaining FDA clearance for its Halol plant.

The stock has lost 0.07% during the last one year and is down 7.48% since the beginning of this year.

The stock touched an intra day high of 532.65 after rising 9.04% on the BSE.

Brokerage KR Choksey has given an accumulate call on the stock with a target price of 539 level in recommendation dated May 29, 2018.

On May 26, Prabhudas Lilladher gave a reduce call on the stock with a target price of 447 level. The recommendation was issued on May 26, 2018.

Motilal Oswal has given a buy call on May 25, 2018 with a target price of 560. On Thursday, the stock closed over 3% higher at 488 level after brokerage CLSA raised the rating of share to 'buy' from 'sell'.

CLSA raised its price target to Rs 600 after the pharma firm reported a rise in net profit on May 25, 2018. "We believe earnings have bottomed out for Sun Pharma," CLSA Research said.

The drug major reported Q4 consolidated net profit at Rs 1,308.96 crore for the quarter ending March on the back of revenue growth in India and emerging markets even as US sales took a hit.

The company had reported a net profit of Rs 1,223.71 crore in the same period of the previous fiscal. Total revenue from operations fell to Rs 6,977.10 crore for the fourth quarter against Rs 7,136.96 crore during the same period of 2016-17.

For the year ended March 31, the drug major posted a net profit of Rs 2,161.55 crore, down 68.96 per cent from Rs 6,964.37 crore in 2016-17, Sun Pharma said in a regulatory filing.