Ranbaxy Laboratories falls on USFDA concerns, brokers downgrade

Jan 14 2014, 11:15 IST
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Jefferies cuts Ranbaxy Laboratories to 'underperform' from Jefferies cuts Ranbaxy Laboratories to 'underperform' from "hold" with a price target of 350 rupees. (AP)
SummaryJefferies cuts Ranbaxy Laboratories to 'underperform' from "hold" with a price target of 350 rupees.

Ranbaxy Laboratories Ltd shares fall 1.3 percent, adding to Monday's 5.4 percent slump after the US Food and Drug Administration raised concerns about manufacturing practices at one of its factories.

Macquarie and Jefferies downgrade Ranbaxy, saying the FDA uncertainty could put pressure on valuations in the near-term till further clarity emerges.

Macquarie downgrades the stock to "neutral" from "outperform" and cuts the price target to 450 rupees from 500 rupees, while Jefferies cuts Ranbaxy to "underperform" from "hold" with a price target of 350 rupees.

Ranbaxy Laboratories said on Monday the FDA has filed "certain observations" about its Toansa pharmaceutical ingredients plant in the northern Indian state of Punjab.

"The issue also increases the risk of delay in resolution of import alerts and launch of products," Jefferies said in a note to clients.

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