Solara Active Pharma Sciences Limited (SOLARA), a prominent player in the pharmaceutical sector, has announced a significant corporate action involving the conversion of partly paid-up shares and an increase in its paid-up capital.

First Call Money Receipt and Share Conversion

The company has successfully received the first call money amounting to Rs 4.88 crore for 3,71,779 partly paid-up Rights Equity Shares. This development comes as part of the company's ongoing rights issue process. The Rights Issue Committee, through a circular resolution, has approved the conversion of these shares from Rs 3.50 paid-up to Rs 7 paid-up status.

Impact on Paid-Up Capital

Following this conversion, Solara Active Pharma Sciences' paid-up capital has increased to Rs 44.47 crore. The company's capital structure now comprises:

Rights Issue Background

The original rights equity shares were allotted on June 19, 2024, pursuant to a Letter of Offer dated May 09, 2024. This recent conversion is a part of the ongoing process related to that rights issue.

Next Steps

Solara Active Pharma Sciences has stated that it will take necessary steps for corporate actions and obtain listing and trading approvals for the converted shares. This move is expected to enhance the liquidity of these shares in the market.

Regulatory Compliance

The company has made this disclosure in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This ensures transparency and keeps shareholders and the public informed about significant corporate actions.

This corporate action demonstrates Solara Active Pharma Sciences' commitment to its capital raising plans and indicates ongoing investor interest in the company's equity. Shareholders and potential investors should keep an eye on further announcements regarding the listing and trading of these converted shares.

Solara Active Pharma Sciences Limited , a leading active pharmaceutical ingredients (API) manufacturer, has reported a robust performance for the first quarter, marking a significant turnaround in its financial metrics.

Revenue and Profitability Surge

The company delivered a revenue of INR 320.00 crores in Q1, representing a 15% quarter-on-quarter growth. This growth was accompanied by a healthy gross margin of 54%, reflecting the company's focus on high-quality business and operational efficiency.

Solara's EBITDA for the quarter stood at INR 57.00 crores, showing a 13% quarter-on-quarter growth and an impressive 36% year-on-year increase. The company achieved its highest Profit After Tax (PAT) in 12 quarters, reaching INR 10.50 crores, translating to an Earnings Per Share (EPS) of INR 2.50.

Market Performance and Debt Reduction

The company's performance in developed markets remained strong, contributing 77% of overall sales. This underscores Solara's strategy to focus on high-quality, regulated markets for sustainable growth.

In a significant move towards improving its financial health, Solara reduced its debt by INR 143.00 crores during the quarter. This reduction, partly funded by the first call money of the rights issue (INR 113.00 crores) and operational cash flows (INR 31.00 crores), has brought the company's net debt-to-EBITDA ratio down to 2.7x.

Strategic Shift in Product Portfolio

Solara has successfully reduced its dependence on ibuprofen, which now contributes approximately 30% of the business, down from a previous 50% dependency. This strategic shift includes a focus on ibuprofen derivatives and other high-margin products.

The company's product mix for ibuprofen now stands at about 21% for plain ibuprofen and 9% for ibuprofen derivatives, indicating a move towards more value-added offerings.

Operational Efficiency and Future Outlook

Currently operating at 60-65% capacity utilization, Solara is implementing cost improvement programs and focusing on operational efficiency. The management has guided for a 10% revenue growth and 15-20% EBITDA growth.

Sandeep Rao, Managing Director and CEO of Solara, commented on the results, stating, "We have started on the right note with a strong Q1. These are the first green shoots of growth, and we will continue our focus on gross margin growth and EBITDA growth alongside our continued efforts on cost control, opex leverage, debt reduction, and network optimization."

CRAMS Business Development

The company is also progressing with its plans to demerge its Contract Research and Manufacturing Services (CRAMS) business. This segment, currently generating an annual revenue of about INR 100.00 crores, is set for significant investments, including the repurposing of the Vizag plant.

Arun Kumar, Founder and Non-Executive Director, added, "We expect to start the legal process for the CRAMS demerger immediately. We believe that with the right investments and focus, we can grow this business to INR 400.00-500.00 crores in the next 3-4 years."

As Solara Active Pharma Sciences continues its journey from reset to growth, the company appears well-positioned to capitalize on its strategic initiatives and market opportunities in the coming quarters.