Company Update : Sun Pharmaceutical Ltd By JM Financial Services Ltd
Halol OAI: Limited impact, specialty drives outlook
On 9 th Sep’25, the US FDA classified Sun Pharma’s Halol facility as “Official Action Indicated” (OAI), following its June inspection that resulted in eight Form-483 observations around process and documentation gaps. The site, which has been under Import Alert since 2022, continues to supply only exempted products, and the OAI status indicates that this restriction is unlikely to ease in the near term. That said, Sun Pharma’s reliance on US generics has reduced meaningfully— we estimate it to have reduced to 14% of operating revenue in FY25 from 24% in FY21—diminishing Halol’s importance compared with 5-6 years ago. The company’s growth outlook and stock performance are now more closely tied to its US and global specialty businesses, which remain the key drivers.
* Historical context: In Dec’22, Halol received an FDA Warning Letter for CGMP violations and was placed under Import Alert. Since then, the company has been working on Corrective and Preventive Actions (CAPA), but the OAI status shows gaps remain.
* Jun’25 inspection: From 2nd –13th Jun’25, the FDA inspected Halol and issued a Form-483 with eight observations. These highlighted lapses in processes, documentation, and aseptic practices. The OAI classification stems from these findings.
* 9 th September update: The US FDA has classified Sun Pharma’s Halol facility as “Official Action Indicated” (OAI) after its June inspection, implying the site is not fully compliant with CGMP norms. The facility remains under Import Alert, blocking US shipments except for limited exemptions in case of drug shortages. This signals a continued regulatory hurdle for Sun Pharma despite prior corrective efforts.
* Our understanding: The Halol facility, which had already been placed under Import Alert earlier, continues to supply only exempted products, and the latest OAI classification indicates that this status is unlikely to change in the near term. Sun Pharma’s dependence on the US generics business has steadily declined. We estimate it to have reduced to 14% of operating revenue in FY25 from 24% in FY21, thereby reducing Halol’s importance compared to 5-6 years ago. For the company’s growth prospects as well as stock performance, the US and global specialty businesses remain the key drivers.
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