Solara Q4 Revenue Rises 12% to INR 392cr
Solara Active Pharma Sciences reported Q4 FY26 revenue of INR 392 crore, up 12% sequentially, with EBITDA rising 65% Q-o-Q to INR 61 crore. The base business drove the performance, achieving a 26% EBITDA margin. The company reduced debt by INR 158 crore in FY26 and targets a debt-free status by FY29. Strategic options for the loss-making ibuprofen business are under evaluation.
*this image is generated using AI for illustrative purposes only.
Solara Active Pharma Sciences - pp announced its financial results for the quarter and year ended March 31, 2026, recording its highest revenue, gross margins, and EBITDA in the previous eight quarters. The company reported a sequential revenue growth of 12% to INR 392 crore for Q4 FY26. This performance was driven primarily by the base business, which continues to gain momentum and operates at a 26% EBITDA margin with gross margins of 54%.
The company’s gross margins for the quarter stood at 47%, an improvement of 170 basis points on a quarter-on-quarter basis, with an absolute value of INR 184 crore. Operating costs remained flat sequentially, resulting in an EBITDA of INR 61 crore. This figure reflects a significant quarter-on-quarter growth of 65%. The EBITDA margin for the quarter was recorded at 16%. Business contribution from developed markets remained robust, accounting for 75% of overall sales.
Financial Performance
| Metric | Q4 FY26 Value | Change |
|---|---|---|
| Revenue | INR 392 crore | 12% Q-o-Q growth |
| Gross Margin | 47% | +170 bps Q-o-Q |
| Gross Margin Absolute | INR 184 crore | - |
| EBITDA | INR 61 crore | 65% Q-o-Q growth |
| EBITDA Margin | 16% | - |
Debt Reduction and Balance Sheet
The company has made significant progress towards strengthening its balance sheet by reducing its debt by roughly INR 158 crore during FY26. This reduction represents a decrease of approximately 21% in the total debt during the year. Of this amount, INR 113 crore was attributed to the first call money of rights issued in May 2026, while the remaining INR 45 crore was paid off from operational cash flows. Management stated that they have a line of sight to reduce debt further to close to INR 503 crore by the end of May 2026, driven by the proceeds from the second and final call money.
Strategic Updates and Outlook
Regarding the ibuprofen business, which continues to face headwinds and recorded a negative EBITDA, the Board has appointed bankers to evaluate strategic options. The company expects this evaluation process to conclude within the next two quarters. Consequently, the planned carve-out of the polymers in the CRAMS business has been put on hold until the strategic options for the ibuprofen business are finalized in H1 FY27.
The Vizag facility, which has been mothballed since 2024, incurs fixed costs of INR 12 crore to INR 15 crore annually. The company is currently evaluating options for this facility, including potentially moving the ibuprofen business there or repurposing it for other uses. Management emphasized that the primary driver for the business over the next three years will be the base business from existing facilities, focusing on catalogue generics, polymer APIs, and select intermediates.
What potential buyers or strategic partners might be interested in acquiring or partnering on Solara's ibuprofen business, and how could a divestiture impact the company's overall valuation?
With the base business operating at a 26% EBITDA margin versus the consolidated 16%, how quickly could Solara's blended margins improve once the ibuprofen drag is resolved?
Given that 75% of sales come from developed markets, how exposed is Solara to potential US pharmaceutical tariff policies, and what contingency strategies might management consider?
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