Why Did Aurobindo Pharma Shares Fall 5% Today? Here’s the Reason

Synopsis: Aurobindo Pharma Limited shares fell nearly 5% after the USFDA issued a Form 483 citing quality, contamination, and data integrity concerns at its Telangana Unit-VII facility.

The share of this company, which focuses on generic and speciality pharmaceuticals, including antibiotics, cardiovascular (CVS), central nervous system (CNS), antiretrovirals, anti-allergics, and gastroenterology products are in focus after the USFDA flags concerns on its manufacturing facility

With a market capitalization of Rs 67,271 crore, Aurobindo Pharma Ltd’s shares on Wednesday made a day low of Rs 1,130 per share, down by 4.7 percent from the previous day’s close price of Rs 1,184.65 per share. The share of the company trades at a way undervalued P/E of 19x compared to the industry P/E of 27.9x.

What happened

Unit VII Inspection: The US FDA carried out an inspection of Aurobindo Pharma’s Unit-VII oral solid dosage facility in Telangana between January 28 and February 10, 2026. Post inspection, the regulator issued a Form 483 citing nine procedural observations. The company will address these within the stipulated timelines. BSE has also sought clarification, while the company reiterated its commitment to global quality standards.

Quality control concerns – The USFDA Form 483 with highlighted observations, i.e., Investigations into problems were not thorough, and some out-of-spec results were closed without strong scientific backing. The plant supports about 20 percent of the US portfolio and over 150 ANDA filings, so any disruption could meaningfully affect approvals and supplies.

Contamination and process gaps – Inspectors found major issues in facilities and environmental controls. Drug residues in ducts were detected up to 545× above cleaning limits. Microbial tests showed TNTC (too numerous to count) bacteria, including Pseudomonas and E. coli. Cleaning validation, maintenance records, and monitoring systems were also found to be inadequate, raising cross-contamination risks

Shared logins, backdating, and deletion permissions raised concerns about possible data manipulation. Batch records were incomplete, and deviation handling was weak. With prior Field Alerts and a voluntary recall already reported, the company now faces a higher risk of a Warning Letter or import restrictions, which could impact US sales and product approvals.

Aurobindo Pharma Limited is an integrated global pharmaceutical company headquartered in Hyderabad, India. The Company develops, manufactures, and commercializes a wide range of generic pharmaceuticals, branded specialty pharmaceuticals, and active pharmaceutical ingredients globally in over 150 countries.

The company has 31 manufacturing and packaging facilities that are approved by leading regulatory agencies, including USFDA, UK MHRA, EDQM, Japan PMDA, WHO, Health Canada, South Africa MCC, Brazil ANVISA. 

The Company’s robust product portfolio is spread over seven major therapeutic/product areas encompassing CNS, Anti-Retroviral, CVS, Antibiotics, Gastroenterological, Anti-Diabetics, and Anti-Allergic, supported by a strong R&D set-up.

Financial Highlights: The revenue from operations grew by 8 percent to Rs 8,646 crore in Q3 FY26 from Rs 7,979 crore in Q3 FY25, and EBIDT grew by 12 percent to Rs 1,773 crore in Q3 FY26 from Rs 1,578 crore in Q3 FY25. Accompanied by a net profit growth of 13 percent to Rs 910 crore in Q3 FY26 from Rs 846 crore in Q3 FY25, resulting in an EPS growth of 8 percent to Rs 15.67 per share in Q3 FY26.

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