Solara Active Pharma Sciences Ltd (BOM:541540) Q4 2025 Earnings Call Highlights: Strong Margin ...

GuruFocus News

Fri, May 16, 2025, 12:04 AM 4 min read

• Gross Margin: Increased from 37.8% successful FY24 to 51.5% successful FY25, an betterment of 1,370 ground points.

• EBITDA Margin: Expanded from antagonistic numbers successful FY24 to 16.5% successful FY25, an summation of 2,360 ground points.

• Regulated Market Contribution: 76% of wide concern attributed to regulated markets.

• Operating Cost Reduction: Reduced by astir INR 1,300 cardinal year-on-year, a 22% reduction.

• Debt Reduction: Decreased from astir INR 1,000 crores successful FY24 to INR 776 crores successful FY25.

• Finance Cost: Increased by INR 11 crore successful FY25 owed to short-term debt.

• Projected Revenue Growth for FY26: Expected to turn by astir 10%.

• Projected EBITDA Growth for FY26: Expected to turn by 15% to 20%.

• Warning! GuruFocus has detected 7 Warning Signs with BOM:541540.

Release Date: May 15, 2025

For the implicit transcript of the net call, delight notation to the afloat net telephone transcript.

• Solara Active Pharma Sciences Ltd (BOM:541540) has successfully expanded its gross borderline from 37.8% successful FY24 to 51.5% successful FY25, indicating a important betterment successful profitability.

• The institution has reduced its indebtedness from astir INR 1,000 crores successful FY24 to INR 776 crores by the extremity of FY25, showcasing effectual indebtedness management.

• Solara's absorption connected high-margin products and regulated markets has resulted successful 76% of its concern being attributed to these profitable markets.

• The institution has maintained a beardown regulatory compliance record, with palmy inspections by the U.S. FDA and WHO approvals for aggregate facilities.

• Solara has introduced a caller enactment team, which is focused connected pivoting the institution towards maturation and profitability, with an outlook of 10% gross maturation and 15-20% EBITDA maturation for FY26.

• The institution missed its gross and EBITDA guidance for FY25 owed to aggravated contention successful the ibuprofen market, which has been a important gross driver.

• Solara's reliance connected the ibuprofen concern has been challenged by excess capableness and pricing pressures, starring to a strategical displacement towards derivatives and non-ibuprofen products.

• Despite improvements, the institution inactive faces a stretched moving superior scenario, partially owed to muted gross growth.

• The company's capableness utilization is presently astatine 60%, indicating underutilization of its accumulation capabilities.

• Solara has not provided circumstantial guidance for FY26, opting alternatively for an outlook, which whitethorn make uncertainty for investors seeking wide targets.

Q: Can you explicate the challenges faced with the ibuprofen concern and the strategy moving forward? A: Arun Kumar, Founder & Non-Executive Director, explained that the ibuprofen concern is facing terrible competitory unit owed to excess capacity, peculiarly from caller plants successful India with much businesslike technologies. The institution is focusing connected retaining branded large pharma customers portion reducing vulnerability to the generic market. The strategy involves shifting absorption from plain ibuprofen to derivatives, which has helped support gross levels contempt challenges.