Solara Active Pharma Sciences Limited

Solara Active Pharma Sciences Limited - Q3 FY21 Review

Solara Active Pharma Sciences Limited reported a net turnover of Rs 405.1 crore for the quarter ended Sept 30, 2021, when compared to Rs 403.2 crore for the quarter ended Sept 30, 2020. Profit Before Tax and Profit After Tax was Rs 30.2 crore and Rs 30.2 crore for the quarter ended Sept 30, 2021, as compared to Rs 55.9 crore and Rs 55.9 crore during the corresponding quarter of the previous year.

Solara Active Pharma Sciences Limited - Investment Summary

Overview

• 2nd largest player in Indian API/CRAMS market

• Cost leader in Ibuprofen API

• Strong presence in regulated markets

• The company aims a revenue CAGR of 25% over FY21-25

• Strong tailwinds supporting the industry- China Plus One strategy

• Merger with Aurore, Empyrean Lifesciences and Hydra Active Pharma

Solara Active Pharma Sciences Limited - Quarterly Summary

Business

Solara Active Pharma Sciences Limited is an emerging player in pure Active Pharma Ingredients (API) and Contract Research and Manufacturing Services (CRAMS). The merger of API businesses of Strides Shasun Ltd. and Sequent Scientific Ltd. brought Solara into existence in FY18. 30 years of presence in the industry, 2 R&D Centers, 6 manufacturing sites, and 25 successful USFDA Audits across different sites make Solara one of the strongest players in the industry. The Company has a diversified product portfolio and a strong presence across developed and emerging markets.

Solara mainly operates in two business segments - API and CRAMS. The company realizes around 90% of the revenue from the API segment and 10% of the revenue from the CRAMS segment. The API segment offers its products in the product categories of Commercial and R&D Pipeline. In the commercial category, the company has 36 products whereas, in the R&D Pipeline, it has 17 products. Solara offers the highest number of products in the therapeutic category of anti-inflammatory (9). The other therapeutic categories in which Solara has a strong presence are anesthetics, anthelmintic, anti-hypertensive, anticonvulsant, cardiovascular agents. The company has around 25 APIs in the development stage across high-value product segments. In FY21, Solara launched 2 new products across geographies, filed 8 US Drug Master Files (DMFs) and 3 EU DMFs. Solara has customers in 75+ countries.

The company provides differentiated services for APIs including contract development and manufacturing (CDM), analytical services, and impurity synthesis. The company has CDM capabilities along the entire value chain of a new chemical entity. Solara provides value along with the development of products, from the pre-clinical phase to the commercial phase. The company is associated with all-size pharma companies across North America, Europe, ROW, and Japan. Solara acts as a one-stop solution provider to its customers because of its track record in process development with superior quality systems and global accreditations for GMP manufacturing.

The company’s merger with Aurore Life Science, Empyrean life sciences, and Hydro Active Pharma Sciences made Solara the second-largest pure API player in India. The combined entities will complement each other in the areas of product portfolio, geographical presence, and customers. Aurore’s 20 filed DMFs in the US would further bolster Solara’s presence in the US market. Aurore realizes around 29% of its revenue from the APAC region. This merger transaction will make Solara one of the largest API suppliers in the APAC region. Solara’s CRAMS segment benefits from the addition of Aurore’s CRAMS portfolio. The combined entity would have 8 manufacturing sites, 3 R&D centers, 100+ commercial products, and 110+ DMFs.

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