Granules India saw its stock price tumble by more than 17% during intraday trading on September 12, 2024, after the company disclosed the results of a recent inspection by the USFDA at its Gagillapur FD facility. The inspection, conducted between August 26 and September 6, 2024, concluded with six critical observations that have raised substantial concerns among investors, leading to a pronounced sell-off in the stock market.
Following the inspection report, Granules India's stock price plunged to an intraday low of Rs 562.10. This sharp drop represents a significant 22% decrease from the stock's all-time high of Rs 724.55, achieved earlier in the month. Despite this setback, the stock has demonstrated notable performance over the past year, with a substantial 81% increase from its 52-week low of Rs 313 recorded in September 2023.
Granules India responded to the situation by issuing a detailed statement aimed at reassuring investors. The company acknowledged the concerns raised by the USFDA and emphasized its commitment to addressing the observations. In its official communication, Granules India stated, "We acknowledge the concerns raised by investors and are fully committed to resolving the observations identified by the USFDA. Quality and compliance remain central to our operations, and we are working closely with the USFDA to ensure all concerns are adequately addressed." The company also assured stakeholders that it would provide timely updates as the situation evolves.
The stock’s performance over the past year has been impressive, with Granules India delivering nearly 120% in returns over the last 12 months. In 2024 alone, the stock has risen by around 40%. However, the recent decline in September—nearly 21%—follows a period of strong gains. The stock saw increases of 14% in August, 28% in July, and 17% in June. This recent volatility underscores the sensitivity of the stock to regulatory developments and investor sentiment.
Granules India’s stock volatility highlights the broader challenges facing the company as it navigates regulatory scrutiny and investor concerns. The significant drop in stock price, despite the recent rally, reflects the market’s reaction to the USFDA’s observations and the potential impact on the company’s operations and financial performance. Investors and analysts will be closely monitoring how Granules India addresses the regulatory issues and manages its response to regain stability and confidence in the coming weeks.
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