Solara Active Pharma Sciences – Pure Play API

Solara Active Q1FY25 Concall Summary
Business Updates

• The Vizag facility has been mothballed and being converted to a new facility for the CRAMS business
• The company will be incurring costs for this which will be there only till Q2 and not be present in H2
• The guidance for revenues for FY25 stands at around Rs 1400 crores
• The business has been re worked to its earlier model of major revenues coming from regulated markets and long term contracts that were in place earlier
• The company has reduced debt by around Rs 160 crores including money from rights issue and also free cash that the business has generated

Participants

Systematix

Motilal Oswal

Macquarie

KSA Securities

DAM Capital

QnA

• Currently the Vizag facility is a multipurpose plant but it will be retrofitted to become a CRAMS facility and a High potent API facility
• As of H2 the gross margins will get back at the 48% level
• The Bio Security Act in US is relevant only for biological space and not the API & CDMO space
• By mothballing the Vizag facility the demand supply situation has normalized and there is no excess inventory on ibuprofen now with the Pondicherry facility supplying now
• The capacity for ibuprofen at Vizag is 3000 tons, which in future can be expanded to 9000 tons. This facility will be kept for the future
• The past issues have been taken care of from the rights issue. The free cash generation will be higher than earlier stated guidance
• The key is how many of the RFP’s for CRAMS will get converted
• FY25 will be a year for stabilization with revenues at Rs 1400 crores and debt to EBITDA getting lower