SMS Pharma Surges 10% on USFDA Inspection Update, But Profit-Booking Wipes Out Gains

Hyderabad, August 28, 2025 – SMS Pharmaceuticals Limited (NSE: SMSPHARMA, BSE: 532815) gained up to 10% in early trade on Thursday, rising ₹25.00 to ₹256.00, after the company announced inspection results from the U.S. Food and Drug Administration (USFDA) at the company’s Central Laboratory Analytical Services at Gagillapur, Hyderabad.

However, massive intraday profit booking resulted in the stock losing all the gains just before the market’s closing bell. The share closed at ₹222.50 (down by 3.85% from the previous day’s closing price).

Stock Performance

The stock was largely in the green throughout the trading period. The day’s high was also ₹256.00, which was slightly more than 10% higher than the previous day’s closing price. However, towards the end of the trading session, the stock lost all its gains and closed at ₹222.50 (down 3.85%), thereby demonstrating a total movement range of close to 14% for the day. Over 18 lakh shares were traded during the day.

Key Trigger: USFDA Clearance

The rally was made possible after SMS Pharma announced that the USFDA audit (June 23-25, 2025) of its Hyderabad Central Laboratory had been completed with no adverse observations. The company was rewarded with a ‘zero Form 483 observations‘, implying no irregularities or issues in the internal processes. The regulator issued an Establishment Inspection Report (EIR) with “No Action Indicated (NAI)”.

Management Commentary

Executive Director P. Vamsi Krishna commented, “The successful completion of the USFDA inspection underscores our unwavering commitment to the highest standards of quality, regulatory compliance, and operational excellence. This positive outcome reinforces the confidence of our global partners and stakeholders, while further enabling our strategic growth and sustained presence in key regulated markets.”

Outlook

The sizable USFDA clearance with SMS Pharmaceuticals instils confidence in its investors and bolsters its credibility as a global entity. With ample manufacturing capability and research and development proficiency, SMS Pharmaceuticals appears well-positioned for continued organic growth, along with solid regulatory compliance and expansion across numerous therapeutic segments, thereby enhancing its long-term shareholder value and global competitiveness.

Established in 1990, SMS Pharmaceuticals Limited is an integrated pharmaceutical company focused on APIs (Active Pharmaceutical Ingredients) and intermediates for global markets. The company has manufacturing facilities located in Hyderabad (with a 120,000-litre capacity) and Vizag (with a 3,000,000-litre capacity), and possesses in-house research and development expertise. SMS Pharma is a supplier of APIs to over 70 countries and is a key supplier in many therapeutic areas.

REF: https://nsearchives.nseindia.com/corporate/SMSPHARMA_26082025172820_Cover_EIR.pdf

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