A day after a fire accident at Orchid Chemicals and Pharmaceuticals' research labs in Chennai, the company's share dipped 3.87 per cent on the BSE on Monday to close at Rs 174.95.
Ms Sarabjit Kour Nangra, research analyst at Angel Broking tracking Orchid, said such incidents are common to manufacturing companies and they will not affect the operations of the company. Angel had recently given a ‘Buy' rating to the company stock.
“The market obviously will react badly to such news but we are not changing our rating,” said Ms Nangra.
The fire broke out in a portion of the new drug discovery laboratories located in the company's research subsidiary Orchid Research Laboratories in Sholinganallur, Chennai. It was brought under control by the Tamil Nadu Fire Services squad assisted by the Orchid safety team.
Short circuit
There was damage to office and laboratory equipment, furniture and building interiors. However, there were no injuries to anyone.
The fire is suspected to have been caused due to short circuit, with the false ceiling foam fanning a smoke. Investigations are still on, said a company official. The official also said the labs are insured and there will be no impact on revenues.
The incident brings to light the need for fire-retardant construction materials, said an official involved in testing and certification. “In India, most companies are focused only on the strength of materials but they should also look at conducting flammability tests on construction materials,” he said.
The Sholinganallur facility houses 400 people. Research activities are continuing at other labs in the facility. The affected labs will be restored soon, said the official.
A few months ago, Orchid's manufacturing facility at Alathur, near Chennai, was given a closure notice by the Tamil Nadu Pollution Control Board over “non-compliance” of disposal norms. The facility was out of action for more than a month before it reopened in August.
The stock tumbled 35 per cent since July 1, as against the BSE Sensex's fall of 14.5 per cent. During the same period, the BSE Small-cap index and the Mid-cap index fell 15.8 and 11.1 per cent respectively.