NewsEarningsSolara Active Pharma Reports 39% EBITDA Decline in Q2 FY26 Due to Mangalore Facility ShutdownSolara Active Pharma Reports 39% EBITDA Decline in Q2 FY26 Due to Mangalore Facility Shutdown
Solara Active Pharma Sciences faced challenges in Q2 FY26 due to an unscheduled shutdown at its Mangalore facility. Revenue decreased by 2% to ₹314.00 crores, while EBITDA fell 39% to ₹35.00 crores. Gross margin declined to 51.00%. The shutdown resulted in lost sales of ₹30.00-35.00 crores and a gross margin impact of ₹18.00-20.00 crores. Despite setbacks, the company cleared a U.S. FDA audit at the Mangalore facility. Management maintains a positive outlook, expecting 10% revenue growth and 15-20% EBITDA growth for FY26. The company plans to reduce debt to ₹446.00 crores by Q1 FY27.
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Solara Active Pharma Sciences - PP , a leading pharmaceutical company, reported a challenging second quarter for FY2026, with a significant decline in EBITDA due to an unscheduled operational shutdown at its Mangalore facility.
Financial Performance
| Metric | Q2 FY26 | Q-o-Q Change |
|---|---|---|
| Revenue | ₹314.00 crores | -2% |
| EBITDA | ₹35.00 crores | -39% |
| Gross Margin | 51.00% | -264 bps |
| Operating Costs | ₹120.00 crores | +₹9.00 crores |
The company's revenue saw a marginal decline of 2% quarter-on-quarter, while EBITDA dropped significantly by 39% to ₹35.00 crores. The gross margin, although healthy at 51.00%, decreased by 264 basis points compared to the previous quarter.
Mangalore Facility Shutdown Impact
The unscheduled operational shutdown at the Mangalore facility, which lasted for 3-4 weeks in August, was the primary reason for the quarter's underperformance. This shutdown resulted in:
- Lost sales of approximately ₹30.00-35.00 crores
- Gross margin impact of ₹18.00-20.00 crores
- One-time upgrade costs of ₹4.00 crores
Despite these challenges, Solara Active Pharma Sciences successfully cleared a U.S. FDA audit at the Mangalore facility with only two minor observations of a procedural nature.
Business Highlights
- Regulated markets contributed 75% of overall sales
- Debt reduced by ₹153.00 crores during H1 FY26, a 20% reduction from the opening debt
- The company maintains a portfolio of 90-95 DMF filings in the U.S., with 35-40 active products
Future Outlook
Management remains optimistic about the company's prospects:
- Expects the disruption to be temporary
- Maintains outlook of 10% revenue growth and 15-20% EBITDA growth for FY26
- Plans to further reduce debt to ₹446.00 crores by Q1 FY27
- Focuses on improving profitability through cost improvement programs and operating cost optimization
Management Commentary
Sandeep Rao, Managing Director and CEO, stated, "While these factors did impact us in Q2, they are transitory. The underlying fundamentals of the business remain strong, supported by a resilient operating model, a robust compliance framework, and a diversified portfolio across all our key markets."
Sarat Kumar, CFO, added, "We are confident that both the medium-term as well as long-term business fundamentals remain the same, and we look forward to a quick improvement in our financial performance in the upcoming quarters."
Solara Active Pharma Sciences continues to focus on its transformation journey, aiming to pivot from reset to sustainable, scalable, and reliable growth. The company's management remains committed to improving operational efficiencies and maintaining a healthy gross margin profile in the coming quarters.
