Solara Active Pharma Swings to Rs 10.1 Crore Loss in Q2 FY26 Amid Shutdown Impact, Focuses on Deleveraging
New Delhi: Solara Active Pharma Sciences Limited has reported a consolidated net loss of Rs 10.1 crore for the quarter ended September 30, 2025 (Q2 FY26), compared to a profit of Rs 7.9 crore in the same period last year.
Despite the temporary setback, Solara’s management reiterated confidence in its long-term growth strategy, highlighting strong fundamentals, a diversified portfolio, and ongoing efforts to strengthen the balance sheet through debt reduction.
Despite the revenue dip, the company maintained a gross margin of 51%, slightly higher than 50.5% a year ago, though lower than 54.1% in the previous quarter. The improvement in year-on-year margin indicates continued efficiency in cost management, while the sequential decline reflects temporary disruptions in production and product mix changes caused by the shutdown.
Operating costs increased to Rs 1,246 million, up 8% quarter-on-quarter and 10% year-on-year, primarily due to one-time expenses of around Rs 40 million linked to the facility upgradation. This, combined with lower sales, resulted in a sharp fall in profitability. The company’s EBITDA stood at Rs 352 million, a decline of 39% from the previous quarter and 43% compared to last year, bringing the EBITDA margin down to 11.3% from 18% in Q1 FY26 and 17.7% in Q2 FY25.
Consequently, Solara posted a net loss of Rs 101 million for the quarter, reversing the profit of Rs 105 million reported in Q1 and Rs 79 million in the corresponding period last year. Earnings per share also turned negative at Rs (2.36).
However, the company continued to make progress on debt reduction. Gross debt declined by Rs 1,527 million during the first half of FY26, from Rs 7,760 million at the end of FY25 to Rs 6,233 million as of September 30, 2025, aided by funds from its rights issue and operating cash flows. Solara expects further deleveraging in the coming quarters, projecting gross debt at Rs 4,461 million by May 2026, which would bring the gross debt-to-EBITDA ratio down to about 2.5 times.
Regulated markets remained a core revenue driver, accounting for 75% of total sales in the quarter, underscoring Solara’s continued strength in key international geographies. The company also reiterated its focus on improving its product mix, cost optimization, and strengthening its balance sheet.
Sandeep Rao, MD & CEO, said, “We commenced FY26 with a clear objective: to pivot the business from a phase of reset to one characterized by sustainable, scalable, and reliable growth. Whilst our transformation journey remains intact, our financial performance during this quarter was primarily impacted by short-term disruptions arising from an unscheduled operational shutdown at Mangalore on account of facility upgradation resulting in delayed deliveries and reduced sales volumes during the quarter.
While these factors influenced current quarter results, 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 key markets.
Regulated markets and a healthy product mix continue to be a hallmark of the business. We are also actively working to strengthen the balance sheet, aiming to reduce debt through a combination of rights issues and operating leverage, resulting in a lighter and healthier financial position.”
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