Shares of Glenmark Pharmaceuticals Ltd. surged by as much as 9% during Monday’s trading session.

The sharp uptick in the stock price was seen after the US Food and Drug Administration (FDA) issued a Form 483 with zero observations for the company’s manufacturing facility in Chhatrapati Sambhaji Nagar (Aurangabad).

The US FDA conducted an inspection at the facility from September 9 to September 20, 2024.

Concerns over an adverse result of the US regulator’s inspections had also weighed on the stock last week, dragging it down to 6%.

Brokerage firm Investec, meanwhile, initiated a ‘fast long’ position on Glenmark Pharma, with a target price of ₹1,900 per share.

The price target ascribed by Investec implies a potential upside of more than 16% from the stock’s last closing levels.

The brokerage expects that earnings momentum, along with strong cash flow generation, will continue to support the company’s ongoing re-rating.

The Aurangabad facility, receiving zero observations, provide a near-term trigger, the brokerage firm said in its note.

This is a critical facility as it produces several respiratory products, including gFlovent MDI and various nasal sprays. Investec views Glenmark primarily as an opportunity in the Indian and Rest of World (branded generics) markets, which together account for over 70% of its EBITDA.

At a valuation of 23 times the estimated EPS for September 2026, the stock is considered inexpensive.

Ace investor Ashish Dhawan held a 2.55% stake in Glenmark Pharma, according to the June quarter shareholding pattern.

At around 1 pm, shares of Glenmark were trading 5.10% higher at ₹1,720.20. The stock has doubled in value so far this year, rising 101%.