Solara Active Pharma Sciences Ltd. (SOLARA) AI Stock Analysis

• Market Cap: ₹24.32B
• Dividend Yield: N/A
• Average Volume (3M): 37.94K
• Price to Earnings (P/E): 374.0
• Beta (1Y): 1.36
• Revenue Growth: -4.18%
• EPS Growth: N/A
• Country: IN
• Employees: 2,156
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -2.27
• Shares Outstanding: 48,170,063
• 10 Day Avg. Volume: 26,889
• 30 Day Avg. Volume: 37,944
• PEG Ratio: -36.57
• Price to Book (P/B): 1.81
• Price to Sales (P/S): 1.54
• P/FCF Ratio: 11.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: ₹517.00 ▼(-11.29% Downside)

Solara Active Pharma Sciences Ltd. has a moderate overall stock score driven by its financial performance and technical analysis. The company's improving cash flow and operational margins are positive, but the high P/E ratio and lack of dividend yield present significant valuation concerns. Technical indicators suggest a neutral to slightly bearish outlook.

Positive Factors

Free cash flow strength

A 155% jump in free cash flow signals materially improved cash generation, enhancing the firm's ability to fund capex, repay or refinance debt, and invest in CDMO capacity. Durable cash flow recovery supports strategic flexibility and lowers financing risk over months.

High gross and recovering EBIT margins

A 51.2% gross margin and a restored 34.7% EBIT margin indicate strong core manufacturing economics and rising operational leverage. Sustained margins point to pricing power or cost control in API production, improving long-term cash generation and resilience to input cost cycles.

API and CDMO business model

A dual model of API sales plus CDMO services creates diversified, repeatable revenue and long-term customer contracts. Regulatory barriers and specialized manufacturing capabilities raise switching costs, supporting sustainable demand and strategic customer relationships over multiple quarters.

Negative Factors

Near-term revenue contraction

Negative revenue growth (-4.18%) reflects shrinking top-line scale, which can erode operating leverage and limit reinvestment. If sustained, declining sales reduce capacity utilization and weaken competitiveness in a capital-intensive API/CDMO industry over the medium term.

Very low net profitability

An almost zero net margin despite high gross margins implies significant non-operating costs, taxes, or inefficiencies. Persistently negligible net returns constrain retained earnings, limit ability to reward equity holders, and reduce internal funding for strategic investments.

Weak ROE and earnings volatility

An ROE near zero and historical swings in revenue and net income indicate inefficient use of equity and unstable earnings. This undermines predictability for capital allocation, increases cost of equity, and complicates long-term planning for growth or margin improvements.

Solara Active Pharma Sciences Ltd. Business Overview & Revenue Model

Company Description

Solara Active Pharma Sciences Limited manufactures, produces, processes, formulates, sells, imports, exports, merchandises, distributes, trades in, and deals in active pharmaceutical ingredients (API) in India. The company offers APIs for anesthetics, anthelmintic, anti-arrhythmic agent, anti-asthmatic, anti-hypertensive, anti-inflammatory, anti-Parkinson, anti-viral, antibiotic, anticoagulant, anticonvulsant, antidepressant, antiemetic, antiepileptic, antifungal, antigout agent, antihistamine, antihyperlipoproteinemic, antimalarial, antimycotic, antineoplastic detoxifying agent, antiprotozoal agent, antipsoriatic, antipsychotic, antitubercular, antitussive, antiulcerative, anxiolytic, bile acid analogue, calcimimetic agent, cardiovascular agent, central nervous system agent, chronic alcoholism, chronic kidney disease, dopamine receptor antagonist, folate analog, hyperkalaemia, immunosuppressant, lipid regulating agent, loop diuretic, muscarinic agonist, neuromuscular, OAB treatment, phenylalanine reducer, recovery of stroke, tardive dyskinesia, treatment of glaucoma and hyperphosphatemia, tropical anti-infective, and type-II diabetes therapeutic categories. It also provides contract research and manufacturing services for APIs, including contract development and manufacturing, analytical services, impurity synthesis, and regulatory support. In addition, the company exports its products. It operates in the Asia Pacific, Europe, North America, South America, and internationally. The company was formerly known as SSL Pharma Sciences Limited and changed its name to Solara Active Pharma Sciences Limited in March 2017. Solara Active Pharma Sciences Limited was incorporated in 2017 and is based in Chennai, India.

How the Company Makes Money

Solara generates revenue through multiple streams including the sale of Active Pharmaceutical Ingredients (APIs) to pharmaceutical companies, contract manufacturing services, and exports to various international markets. The company's revenue model is driven by long-term contracts with clients, ensuring a steady flow of income. Additionally, SOLARA engages in partnerships and collaborations with other pharmaceutical firms, which enhance its product offerings and market reach. The company's focus on research and development helps it to innovate and expand its product portfolio, contributing to increased sales and market share.

Solara Active Pharma Sciences Ltd. Financial Statement Overview

Summary

Solara Active Pharma Sciences Ltd. shows signs of recovery with improving operational margins and cash flow performance. However, profitability remains a concern with significant fluctuations in net income and low return on equity. The company is leveraging equity efficiently, but sustained efforts are needed to stabilize revenue growth and enhance net profit margins.

Income Statement

Solara Active Pharma Sciences Ltd. has demonstrated a volatile income trajectory reflected by fluctuating revenue and net income over the analyzed periods. The gross profit margin for the latest year is 51.2%, showing strong profitability in core operations, but the net profit margin is a mere 0.04%, indicating that high operational costs or other expenses significantly impact the bottom line. Revenue growth is relatively flat over the past year, with a minor increase of 0.76%. EBIT margin improved to 34.7% from negative figures in previous years, signifying operational recovery. Overall, the income statement reflects a mixed performance with potential stabilization in profitability.

Balance Sheet

The balance sheet of Solara Active Pharma Sciences Ltd. reveals a moderate financial position with a debt-to-equity ratio of 0.73, indicating a balanced approach to leveraging. The return on equity (ROE) is extremely low at 0.05%, suggesting inefficient utilization of equity to generate profits. The equity ratio stands at 49%, denoting a solid foundation of equity in the asset base. The company's reduction in debt and increase in equity over recent years are positive signs, but profitability remains a concern.

Cash Flow

The cash flow statement shows a strong improvement in free cash flow, which grew by 155% from the previous year, indicating enhanced cash generation capabilities. The operating cash flow to net income ratio is high, suggesting robust cash generation relative to net income, while the free cash flow to net income ratio also reflects healthy cash flows. These factors contribute to a positive cash flow outlook, signaling effective cash management despite past challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.39B	12.84B	12.89B	14.27B	12.68B	15.97B
Gross Profit	5.90B	6.57B	-1.30B	1.25B	5.60B	3.81B
EBITDA	2.30B	2.06B	-2.82B	1.52B	793.30M	4.14B
Net Income	245.20M	5.40M	-5.67B	-221.70M	-581.50M	2.21B
Balance Sheet
Total Assets	0.00	22.32B	23.51B	28.99B	29.53B	26.14B
Cash, Cash Equivalents and Short-Term Investments	41.10M	41.10M	84.40M	87.30M	463.80M	1.98B
Total Debt	0.00	7.96B	10.12B	10.13B	10.37B	6.21B
Total Liabilities	-10.97B	11.35B	14.14B	13.97B	14.18B	10.21B
Stockholders Equity	10.97B	10.94B	9.34B	15.00B	15.25B	15.89B
Cash Flow
Free Cash Flow	0.00	1.73B	678.10M	449.40M	-4.51B	-190.20M
Operating Cash Flow	0.00	2.13B	1.09B	1.56B	-2.42B	1.55B
Investing Cash Flow	0.00	-368.30M	-35.10M	-811.40M	-2.43B	-1.06B
Financing Cash Flow	0.00	-1.80B	-1.06B	-1.13B	3.34B	924.90M

Solara Active Pharma Sciences Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 582.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SOLARA, the sentiment is Negative. The current price of 582.8 is above the 20-day moving average (MA) of 540.19, above the 50-day MA of 551.61, and above the 200-day MA of 576.84, indicating a bearish trend. The MACD of -15.15 indicates Positive momentum. The RSI at 33.44 is Neutral, neither overbought nor oversold. The STOCH value of 16.65 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:SOLARA.

Solara Active Pharma Sciences Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMSPHARMA	65 Neutral	₹29.73B	33.07	―	0.13%	11.91%	36.92%
KRSNAA	62 Neutral	₹23.03B	27.16	―	0.38%	11.51%	21.56%
MOREPENLAB	57 Neutral	₹19.93B	20.21	―	0.49%	-0.29%	-29.04%
SOLARA	55 Neutral	₹24.32B	374.05	―	―	-4.18%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
PANACEABIO	51 Neutral	₹22.81B	-315.10	―	―	9.78%	50.78%

Solara Active Pharma Sciences Ltd. Corporate Events

Solara Active Pharma Sciences Addresses Surge in Trading Volume

Solara Active Pharma Sciences Limited has experienced a significant increase in the volume of its securities across exchanges. In response to an inquiry from the National Stock Exchange of India, the company clarified that it has complied with all disclosure regulations and has not withheld any material information that could affect its stock price or trading volume. This announcement aims to reassure investors and maintain transparency in the market.

Solara Active Pharma Sciences Ltd. Releases Unaudited Financial Results for Q2 2025

Solara Active Pharma Sciences Ltd. announced the publication of its unaudited financial results for the quarter and half-year ending September 30, 2025. These results were shared through newspaper advertisements in ‘Business Standard’ and ‘Pratahkal’ and are available on the company’s website. The announcement provides stakeholders with insights into the company’s financial performance, which is crucial for assessing its operational efficiency and market positioning.