Ranbaxy shares fall on FDA concerns

Tue Jan 14, 2014 4:14pm IST

A man rides a motorcycle in front of the office of Ranbaxy Laboratories at Gurgaon, on the outskirts of New Delhi, June 13, 2013. REUTERS/Adnan Abidi/Files

A man rides a motorcycle in front of the office of Ranbaxy Laboratories at Gurgaon, on the outskirts of New Delhi, June 13, 2013.

Credit: Reuters/Adnan Abidi/Files

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Kishore Pandey, 82, lies on a bed as his daughter, Usha Tiwari, holds him and a priest stands by them (L) at Mukti Bhavan (Salvation House) in Varanasi, in the northern Indian state of Uttar Pradesh, June 19, 2014. REUTERS/Danish Siddiqui

Waiting to die at Salvation House

The city of Varanasi is Hinduism's holiest city and many Hindus believe that dying there and having their remains scattered in the Ganges allows their soul to escape a cycle of death and rebirth.  Slideshow 

Reuters Market Eye - Ranbaxy Laboratories(RANB.NS) shares fall 2 percent, adding to Monday's 5.4 percent slump after the U.S. 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 said on Monday the FDA has filed "certain observations" about its Toansa pharmaceutical ingredients plant in 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.

(Reporting by Indulal PM)

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