Sun Pharma shares rally after USFDA reclassifies Halol Unit as 'No Action Initiated'

NEW DELHI: Shares of Sun Pharmaceutical witnessed a sudden spike after media reported that the USFDA has reclassified its Halol unit as "No Action Initiated". The scrip rallied over 2 per cent to Rs 616.65 in early trade.

USFDA no action initiated status means clearance for the unit.

The drug major’s Halol unit got six USFDA observations on August 31.

The scrip was trading 2.14 per cent higher at Rs 611.65 at around 10 am (IST), while the BSE Sensex was down 0.44 per cent at 35,012.

Earlier during the week, a PTI report said that Sun Pharma expects its India business to stabilise in the current fiscal leading to “reasonable volume growth” after witnessing disruptions in 2017-18 due to GST implementation.

In a message to shareholders in the company's Annual Report for 2017-18, Sun Pharma Managing Director Dilip Shanghvi however said the government's enforced price cuts and policy changes are potential risk factors for the business.

"We expect normalisation of the India business in 2018-19 post the disruption in 2017-18 due to GST implementation. Favourable demographics will ensure reasonable volume growth in India," Shanghvi said.

The company's India business revenues stood at Rs 8,029 crore in 2017-18, a growth of 4 per cent over 2016-17.