Granules India Banks On Hyderabad Facility For Recovery In Coming Quarters
Chairman Dr Krishna Prasad Chigurupati attributed the weak September quarter numbers to work stopping at Hyderabad facility after USFDA's observations.
Granules India Ltd. expects its financials to return to normalcy only after clarity over the observations made by the United States Food and Drug Administration regarding its Gagillapur facility in Hyderabad, Chairman and Managing Director Dr Krishna Prasad Chigurupati said.
The Hyderabad-based pharmaceutical company had reported a 19% year-on-year plunge in its revenue to Rs 966 crore in the second quarter of the current financial, versus Rs 1,189 crore in Q2FY24. Net profit was down 5% at Rs 97 crore versus Rs 110 crore during this quarter.
Chigurupati attributed the decline in numbers to the halt in operations in September at the company's Gagillapur plant, following the US drug regulator's investigation of the unit. They had made six observations regarding the Hyderabad unit, which manufactures finished dosages and pharmaceutical formulation intermediates.
The Indian pharma major's CMD told NDTV Profit that Granules India has responded to the US regulator and has also taken corrective measures.
“Our response definitely shows that we have already taken corrective actions. We also have put in place CAPAs (FDA’s Corrective and Preventive Action) and these things will happen in a period of a few quarters,” he said.
The top executive said that the company had restarted sales at the Gagillapur facility by the end of September, while operations started in October, with concurrence from the FDA.
“They (FDA) have given us a green signal. With the concurrence of the FDA, we have restarted production and sales. So, till we get an EIR (establishment inspection report), business goes on as usual,” the Granules India CMD said.
He added that the company is confident of getting a positive reply from the USFDA. “If the EIR is VAI (voluntary action indicated), which we are very positive about, nothing changes. We go with our corrective actions and all and keep informing the FDA as we do that,” Chigurupati said.
“Otherwise, there could be issues. We will have to see how to resolve them if at all it's other than a VAI. But, based on our interactions with the FDA so far, we have a lot of confidence that it will be a VAI,” he added.
The real normalcy will come when the company receives the EIR from the FDA, he added.
“This again is an unusual quarter that we had. It will impact revenues and profitability for this year to some extent. We hope to make up for some of the losses, but we have to see how we go ahead,” Chigurupati stated.
Shares of Granules India Ltd. were trading 0.08% higher at Rs 572.55 apiece on the NSE against the benchmark Nifty 50's decline of 0.09% as of 9:54 a.m.
