SOLARANSEQ4 FY26May 21, 2026

Solara Active Pharma Sciences Limited

7,247words
122turns
14analyst exchanges
3executives
Management on call
Sandeep Rao
MANAGING DIRECTOR AND
Sarat Kumar
CHIEF FINANCIAL OFFICER– SOLARA ACTIVE PHARMA SCIENCES LIMITED
Abhishek Singhal
INVESTOR RELATIONS – SOLARA ACTIVE PHARMA SCIENCES LIMITED
Key numbers — 36 extracted
12%
arters. In Q4 '26, our overall business has demonstrated a very strong sequential growth Q-o-Q of 12% and EBITDA growth of 65% Q-o-Q. The primary driver of the strong performance has been undeniabl
65%
erall business has demonstrated a very strong sequential growth Q-o-Q of 12% and EBITDA growth of 65% Q-o-Q. The primary driver of the strong performance has been undeniably our base business, which
26%
tum. As you know, this business has already demonstrated superior profitability. It operates at 26% EBITDA margin with gross margins of 54%. This further reinforces the objective we established at
54%
ready demonstrated superior profitability. It operates at 26% EBITDA margin with gross margins of 54%. This further reinforces the objective we established at the start of the year, which was to pivo
INR 392
cial performance for the current quarter. Revenue has a 12% Q-o-Q growth. We delivered revenue of INR 392crs. Gross margins are at 47% with an absolute value of INR184 crores for the quarter. This reflec
47%
quarter. Revenue has a 12% Q-o-Q growth. We delivered revenue of INR 392crs. Gross margins are at 47% with an absolute value of INR184 crores for the quarter. This reflects an improvement of gross ma
INR184 crore
-Q growth. We delivered revenue of INR 392crs. Gross margins are at 47% with an absolute value of INR184 crores for the quarter. This reflects an improvement of gross margin by 170 basis points on a Q-o-Q bas
170 basis point
absolute value of INR184 crores for the quarter. This reflects an improvement of gross margin by 170 basis points on a Q-o-Q basis. The operating cost for the quarter is flat Q-o-Q driven. This
INR61 crore
The operating cost for the quarter is flat Q-o-Q driven. This has resulted in an EBITDA of INR61 crores, which reflects a significant Q-o-Q growth of 65%. Business contribution from our developed mark
75%
65%. Business contribution from our developed markets, which is our mainstay, continues to be at 75% of overall sales. A short note on the crisis in the Middle East. Despite the significant crisis w
16%
and hence, having a superior operating leverage, Solara business has clocked an EBITDA margin of 16% with an absolute EBITDA value of INR61 crores plus, which reflects significant growth of 65% Q-on
INR61 crore
leverage, Solara business has clocked an EBITDA margin of 16% with an absolute EBITDA value of INR61 crores plus, which reflects significant growth of 65% Q-on-Q because we had quite a few subdued quarter
Guidance — 20 items
Abhishek Singhal
opening
“The transcript of this call will be available in a week's time on the company's website.”
Sandeep Rao
opening
“Our Board has appointed bankers to evaluate strategic options for ibuprofen, and we expect this process to finish in the next 2 quarters.”
Sarat Kumar
opening
“As shared by Sandeep, despite facing headwinds in our ibuprofen business, the overall Solara business has recorded a strong quarterly result in Q4 of FY26 with the business recording its highest revenue, gross margin as well as EBITDA in the previous 8 quarters.”
Sarat Kumar
opening
“As we continue to focus our efforts on operating cost leverage and margin expansion, we are very confident of chasing incremental business growth at a healthier margins going forward.”
Sarat Kumar
opening
“Towards our journey for a healthier balance sheet, we have been able to reduce our debt by roughly INR158-odd crores during FY26, which actually signifies close to 21% reduction in the debt during the year, out of which INR113 crores came off from the first call money of rights, which we had in May '26.”
Sajal Kapoor
qa
“I mean how do you see slightly medium term, let's say, FY '28 onwards?”
Ankur Bhadekar
qa
“Like how do you see the business going forward in terms of margins over the medium term?”
Sandeep Rao
qa
“The primary driver of this business in the medium within 3-year horizon, if I might call it, will be our base business from the existing facility.”
Dhruv Sitlani
qa
“Another question I have is that in our base business, what sort of steady state EBITDA margins we expect to achieve in like next 2, 3 years down the line?”
Sarat Kumar
qa
“We have been maintaining that we will be close to in the range of 25% plus, minus here and there.”
Risks & concerns — 3 flagged
ibuprofen business has been a drag for us, continues to be a drag for us.
— Sandeep Rao
So Q1 is something we might have some kind of a tactical impact of those pricing in Q1.
— Sarat Kumar
How would we then take care of the impact of capex that we are having right now.
— Ketan R. Chheda
Q&A — 14 exchanges
Q
Yes. Thank you for the opportunity. Hi, team. Encouraging performance, for sure. I have a few questions, please. So Q4 clearly showed momentum in the base business. But how much of the improvement reflects a structural change in utilization, customer mix and operating leverage versus some of the more temporary factors that might have influenced Q4 performance such as inventory restocking, spot orders or favorable product mix perhaps?
Sandeep Rao
Hi. So let me go first. Hi, Sajal. Yes, hi, Sandeep. Firstly, if you see our revenue growth we have grown 12%. We've grown from around the base of the business. So on the base business, Sajal, we have a very healthy order book, and you've seen that in our numbers as well. So I'm very encouraged looking at this order book and the utilization across our facilities that there is a strong performance, and it is not factors outside our control that are really favoring our business. So Sandeep, I mean, what I'm trying to understand is there is no cyclical kind of one-off like a spot order or some cu
Q
Can you elaborate on what type of strategic options for ibuprofen business are we looking at? And from the best of my recollection, we were supposed to announce something in the fourth quarter, we were supposed to give an update regarding this business.
Sandeep Rao
So, this is taking us some time. In fact, we've mentioned in our report out that we've appointed bankers to sort of give us strategic advice on this. ibuprofen business has been a drag for us, continues to be a drag for us. In fact, you will see from our numbers that the EBITDA, it's eaten out of our existing EBITDA, right? But I believe we'll be in a better position to put out the conclusion on this strategic piece in H1 of this financial year. You have to give us some more time. Got it. Sir, and one more thing. We have also seen improvement in realizations in ibuprofen globally in this quart
Q
Yes, thank you for the opportunity. So, in the previous earnings call, the company has indicated plans to like bring the Vizag facility back into commercial production within the next 5 to 6 months. So, could you provide an update on the progress against the time line? And are we on track for commissioning as planned?
Sarat Kumar
As compared to what you say, Vizag plant commissioning has been actually done long back in 2024. But however, from 2024, the site has been mothballed. So, what we had mentioned in the last earnings call as well saying that once we evaluate this entire strategic options related to ibuprofen, then we will take a strategic call whether we want to move ibuprofen from Pondicherry to Vizag or we want to reutilize Vizag for a different set of things. As Sandeep mentioned in the call earlier, we are still in the process of evaluating those options, and you will have to give us time till H1 by when we
Q
Congrats on good set of...
Management
Q
Congratulations on the good set of numbers in the growth API business. I just wanted to know what is the product concentration of the active product that is revenue contribution of the top 1 or top 3 or top 5 molecules? And is there any single product that is contributing around 10%, 15% of the growth API revenue?
Sarat Kumar
So, we actually don't have a single molecule or single product driving most of the growth. But roughly, we have commercialized close to 70 products in the entire portfolio, what we sell currently, of which roughly top 15 to 20 products has a mix of close to 75% of the entire business. So, we are not overly dependent on any one molecule driving that particular numbers. But yes, we have a basket of close to top 15 products, which actually drive these margins and numbers close to 75%. That would be great. Another question that I have is in the CRAMS revenue. So it's approximately around INR100 cr
Q
Hi team. So Sandeep, just wanted to understand, when you mentioned that you have appointed bankers to evaluate strategic options, what all options are included in this, right? And what has changed since last quarter? Because even in last quarter, we were under the process of reviewing what to do with this segment. So what is the definition of strategic options? What all things are included there? And what has changed since last quarter?
Sandeep Rao
So good question there. So we started this process last quarter, you are right. And we are seriously looking at what options we have. We have the traditional option of finding somebody who is better than us who can run the business or we convert into a multiproduct facility where besides ibuprofen, we focus on other products as well. So we are looking at various kind of options at this point. It's too early for me to sort of pin down and say this is what we're going to do. But as soon as we make up our mind on that, we will reach out and we'll let people know on what route we have selected. Ok
Q
Hello am I audible?
Management
Q
Yes sir. Thank you for the opportunity. It's good to see you are in 15% plus EBITDA margins in Q4. So just wanted to understand like what kind of numbers can we achieve for FY27 and FY28 on revenue and EBITDA basis? Do we have any outlook?
Sandeep Rao
No, Harshit. We will not give any outlook at this point. I would like to believe that the good performance in this quarter is a start to many such good quarters. But at this point in time, my priority and my team's priority is going to be just dig our heels in here and try to do better quarter- over-quarter. Correct. Okay sir thank you and good luck. Thank you.
Q
Good afternoon Team Solara. I think it’s a great set of numbers. My question to you is very simple, how much percentage of R&D is Solara really spending on growing its API business?
Sarat Kumar
Amlan thank you for this particular question. So R&D is something which we have spent roughly close to INR200 crores in the past 4, 5 years. However, having said that, at the same time, we are also mindful that our R&D engine has not been able to come up with at least one new product filing in the last 4 years as well. So although we have spent our efforts on R&D, we have not been able to have success from those particular efforts. Having said that, our current annual rate of spend is close to INR25 crores on R&D. And now we have entirely revived that R&D engine with exactly commercially focus
Q
I just wanted to understand how is the company thinking in the CRAMS division? What are the areas of therapies which the company is working on? And how should one think about? Because given that we are unwinding the ibuprofen business, now the two main centers of Solara will be the base business and the CRAMS business, right? So how should one think about the CRAMS business? What kind of modalities therapies the company working on?
Sandeep Rao
So, as I said in one of my earlier comments, the driver of our business over the next 3 years is going to be our base business, okay? The CRAMS business has been subscale for us, and Sarat even gave you some numbers around it. So, I think what we are going to focus is we are going to focus on Catalogue generics. We are going to focus on polymer APIs. We are also going to focus on certain select intermediates, but that's going to be what's going to drive the growth in FY '27, '28 and '29. We are currently not factoring a lot of CRAMS driving that growth. CRAMS is something we -- I think we stil
Q
Thank you for the opportunity. Sir, could I ask you to please repeat the three focus areas you spoke about in the previous question?
Sandeep Rao
Sure. Three focus areas for us is one is expanding the existing business, which is seeding new customers for our existing products. Second is driving operational efficiency, driving that through capacity debottlenecking, yield improvement, cost improvement. And the third is going to be about wisely managing our financial. So, coming a little bit on the financials. We have finished raising the third call -- sorry, second call of the rights issue. Do we expect to raise more capital for growth or for debt paydown over the next 2, 3 years in your view? So, after this rights issue, what has already
Q
So, I wanted to ask what has been done in the last 1 year since you guys have come in the field? What is the reason that have taken in the last 1 year?
Sandeep Rao
Sorry, I didn't get the second part of the question. No, you're audible. I heard the first part of your question. Can you repeat the second part of your question? No, I wanted to ask what decisions and steps have you taken in the last 1 year or so? Okay. So the five things we have done in the last 1 year. Obviously, the first one was a steady leadership. I think what this company needed was a very healthy order book. So we've really worked on getting more customers to the table, finding new geographies for our products. So a lot of effort in the background has gone in increasing our market sha
Q
Thank you for the opportunity. Team I'd like to ask since the Vizag facility is mothballed, so I'm assuming that we are not generating any revenues from there. But at the same time, is there any expenses that we are incurring on that facility? And if yes, how much are those expenses?
Sarat Kumar
Yes. So as you said, this has been mothballed since '24. However, we have certain fixed cost expenditure for the Vizag site which is INR12 crores to INR15 crores annually. Sorry, you said INR12 crores to INR15 crores? Annually. Annually. Okay, fine. And the other question I have is with respect to the options that you are trying to work out for the ibuprofen business. Now you mentioned that one of the reasons why you would want to kind of look at buyers who could either bring in technology change or backward integration, which we are not doing right now we are backward integrated. So my questi
Q
Thank you, everybody, and I'd like to reiterate thank you for your support. Thank you for staying invested in us. Your team is working really hard to make sure that we build on the Q4 performance and hopefully show quarters as good or better than this in the future. Thank you.
Management
Speaking time
Sandeep Rao
34
Sarat Kumar
17
Moderator
16
Ketan R. Chheda
9
Rohit Koti
7
Sajal Kapoor
6
Dhruv Sitlani
6
Pranav Chawla
5
Prolin Nandu
4
Dheeraj Kumar Reddy
4
Opening remarks
Abhishek Singhal
Thank you, Renju. Good afternoon, and thank you all for joining us today for Solara Earnings Call for the Fourth Quarter and Financial Year 2026. Today, we have with us Sandeep, MD and CEO; and Sarat, CFO of the company, to share the highlights of the business and financials for the quarter and financial year. I hope you've gone through our results release and the quarterly investor presentation that have been uploaded on our website as well as the stock exchange website. The transcript of this call will be available in a week's time on the company's website. Please note that today's discussion will be forward-looking in nature and must be viewed in relation to risks pertaining to our business. After the end of the call, in case you have any further questions, please feel free to reach out to the Investor Relations team. I now hand over the call to Sandeep to make his opening comments.
Sandeep Rao
Thank you, Abhishek. A very nice good afternoon to all of you joining in today's Q4 '26 Earnings Call. I sincerely appreciate your time and presence on this call. Q4 '26 has been very good for us. Our business has delivered the highest revenue, gross margins and EBITDA in the previous 8 quarters. In Q4 '26, our overall business has demonstrated a very strong sequential growth Q-o-Q of 12% and EBITDA growth of 65% Q-o-Q. The primary driver of the strong performance has been undeniably our base business, which continues to gain momentum. As you know, this business has already demonstrated superior profitability. It operates at 26% EBITDA margin with gross margins of 54%. This further reinforces the objective we established at the start of the year, which was to pivot our business from a phase of reset to one that is defined by sustainable, profitable and reliable growth. On Ibuprofen, we continue to face persistent headwinds in this business where we recorded a negative EBITDA. Our Board
Sarat Kumar
Thank you, Sandeep. Ladies and gentlemen, good morning, good afternoon, and good evening to all of you, and thank you for joining in today's Q4 FY26 earnings call. As shared by Sandeep, despite facing headwinds in our ibuprofen business, the overall Solara business has recorded a strong quarterly result in Q4 of FY26 with the business recording its highest revenue, gross margin as well as EBITDA in the previous 8 quarters. The operating costs for the quarter were flat Q-on-Q and hence, having a superior operating leverage, Solara business has clocked an EBITDA margin of 16% with an absolute EBITDA value of INR61 crores plus, which reflects significant growth of 65% Q-on-Q because we had quite a few subdued quarters in Q2 and Q3. As we continue to focus our efforts on operating cost leverage and margin expansion, we are very confident of chasing incremental business growth at a healthier margins going forward. Towards our journey for a healthier balance sheet, we have been able to reduc
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