Ranbaxy stocks may consume more time to improve: analysts believe

ranbaxyInvestors need to more cautious before increasing their stakes in pharmaceuticals giant Ranbaxy Laboratories Ltd. as the company's stocks may take more time to improve, many analysts suggest.

The woes of Ranbaxy seem to be never ending as the company has frequently been by the U. S. Food & Drug Administration (FDA) with drug imports bans. In the most recent case, the FDA banned the import of certain drugs produced at the company's Toansa, Punjab-based facility, citing manufacturing violations.

Previously, the U. S. regulator banned drugs from Ranbaxy's manufacturing facilities at Paonta Sahib, Dewas and Mohali, citing violations of its good manufacturing practices. The frequent import bans on Ranbaxy drugs have hurt the company's stocks over hard over the past months.

Analysts are of the view that Ranbaxy stocks may consume more time to improve. Outsourcing product manufacturing may provide the company with exclusive marketing opportunities in the U. S. but that would squeeze margins and delay product approvals.

DG Shah, secretary general at Indian Pharmaceutical Alliance, said, "In the case of Ranbaxy, there have been more issues in the company than the management anticipated. While Ranbaxy has been facing clampdowns in the last couple of years, other pharma companies . haven't been affected much on the regulatory front."

The frequent bans on Ranbaxy drugs have also eroded the Indian medical practitioners' and well as consumers' confidence in medicines produced by the pharma giant.