SOLARA ACTIVE PHARMA SCIENCES LIMITED — Earnings Release 2025

May 15, 2025

Communication Address: Solara Active Pharma Sciences Limited TICEL BIO PARK., 6th floor

Module No. 601, 602, 603, Phase II – CSIR Road, Taramani, Chennai, Tamil Nadu – 600113. Tel: +91 44 47406200 Fax: +91 44 47406190 E-mail: investors@solara.co.in www.solara.co.in

May 15, 2025

The BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai – 400 001	The National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex Bandra (E), Mumbai–400 051

Scrip Code: 541540, 890202 Scrip Code: SOLARA, SOLARAPP

Dear Sir / Madam,

Subject: Press Release

Please find enclosed herewith Press Release (along with Earnings Presentation) for the Board Meeting held on May 15, 2025 issued by the Company titled:

Solara Q4’25 performance

This is for your information and records.

Thanking You,

Yours Faithfully,

For Solara Active Pharma Sciences Limited

SUDDAPALLI Digitally signed by SUDDAPALLI MURALIKRISHNA MURALIKRISHNA Date: 2025.05.15 16:30:38 +05'30' S. Murali Krishna Company Secretary and Compliance Officer Membership No: A13372

Solara Active Pharma Sciences Limited - CIN: L24230MH2017PLC291636

REGD. OFF: ‘Cyber One’, Unit No. 902, Plot No. 4 & 6, Sector 30A, Vashi, Navi Mumbai - 400 703

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Solara Q4’25 and FY25 Performance

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• Q4 Revenues at INR 2,790 Mn;

• Q4 Gross Margin at INR 1,605 Mn (57.5%);

• Q4 EBITDA at INR 510 Mn (18.3%);

• FY25 Revenues at INR 12,921 Mn vs INR 12,943 Mn in FY24; Flat YoY

• • FY25 Gross Margin at INR 6,649 Mn (51.5%) vs INR 4,891 Mn (37.8%) in FY24; improvement by 1,370 bps YoY

• FY25 EBITDA at INR 2,138 Mn (16.5%) vs. negative INR 917 Mn (-7%) in FY24; significant improvement by 2,360 bps YoY

• Significant miss on Revenue and EBITDA guidance due to a challenging year of intense competition on Ibuprofen range of products

• • While Revenues were flat in FY25 YoY, Gross Margin and EBITDA increased by 1,370 bps and 2,360 bps respectively

• Significant growth on Gross Margin & EBITDA attributed to continued focus on margin expansion

Q4 FY25 Results | May 15, 2025 Solara Active Pharma Sciences Limited

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Safe Harbor
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Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", seek to", "future", "objective", "goal", "likely", "project", "should", "potential", "will pursue", and similar expressions of such expressions may constitute "forward-looking statements“. These forward looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment and business income, cash flow projections, our exposure to market risks as well as other risks. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

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Solara continues to deliver on margin expansion & maintains stellar compliance track record
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Revenue
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▸ Q4’25 Revenue at INR 2,790 Mn vs INR 3,011 Mn in Q4’24

▸ FY25 Revenue at INR 12,921 Mn vs INR 12,943 Mn in FY24

• Revenues were impacted due to increased competition on Ibuprofen range of products and focus on margin expansion

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Gross Margin
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• Q4’25 Gross Margin at INR 1,605 Mn (57.5%) vs INR 1,412 Mn (47%) in Q4’24; Significant improvement by 1,063 bps YoY

• FY25 Gross Margin at INR 6,649 Mn (51.5%) vs INR 4,891 Mn (38%) in FY24 ; Significant improvement by 1,370 bps YoY

• Improved Gross Margins driven by higher Regulated market mix and focus on profitable products

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Cost Control
Measures
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• Tight control on Operating Costs

• Operating Costs at INR 1,095 Mn in Q4’25 vs INR 1,300 Mn in Q4’24; reduced by INR 205 Mn YoY

• Operating Costs at INR 4,511 Mn in FY25 vs INR 5,808 Mn in FY24; reduced by INR 1,297 Mn YoY

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EBITDA
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• Q4’25 EBITDA at INR 510 Mn (18.3%) vs INR 112 Mn (4%) in Q4’24; Significant improvement by 1,458 bps YoY

• FY25 EBITDA at INR 2,138 Mn (16.5%) vs INR -917 Mn (-7%) in FY24 ; Significant improvement by 2,360 bps YoY

• EBITDA expansion driven by improved Gross margins and tight control on Operating costs.

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Debt
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Compliance
Updates
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• Gross Debt as on 31-Mar-25 at INR 7,760 Mn vs INR 9,994 Mn in FY24; reduced by INR 2,234 Mn YoY

• Post utilization of first call money of the Rights Issue, our Gross Debt by end of May’25 is expected to be at INR 6,472 Mn (Net Debt / EBITDA at ~3 times );

• Post realization of second call money of the Rights issue in May’26 and normal debt repayment, Gross debt expected to be at INR 4,461 Mn (Net Debt / EBITDA at ~2.1 times );

• In Apr’24, Mangalore facility successfully received the EU GMP certification

• In May’24, Vizag facility completed USFDA Inspection with Zero 483 inspectional observations

• During FY25, Ambernath, Mangalore and Puducherry facilities received the WHO GMP certification

• In May’25, Ambernath facility completed USFDA Inspection with Zero 483 inspectional observations

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Solara continues to deliver on margin expansion theme
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Sandeep Rao,

MD & CEO

Performance (INR Mn)

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Reduced Operating
Gross Margin at historical
costs YoY
highs
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Particulars	Q4’25	Q3’25	QoQ%	Q4’24	YoY%	FY25	FY24	YoY%
Revenue	2,790	3,018	-8%	3,011	-7%	12,921	12,943	-
Gross Margin	1,605	1,673	-4%	1,412	14%	6,649	4,891	36%
Gross Margin %	57.5%	55.4%	_213 bps _	_46.9% _	1063 bps	51.5%	37.8%	1370 bps
Operating costs	1,095	1,082	1%	1,300	-16%	4,511	5,808	-22%
EBITDA	510	591	-14%	112		2,138	(917)	100%+
EBITDA Margin %	18.3%	19.6%	-132 bps	3.7%	1458 bps	16.5%	-7.1%	2360 bps
PAT	(21)	81		(1,666)		6	(5,666)

EBITDA Margin trending positively in line with the guidance

FY25 was a Reset year for Solara. While we regrettably missed our guidance both on Revenues and EBITDA, we continued to focus on profitable high margin and high quality business which led to Gross Margin expansion from 37.8% in FY24 to 51.5% in FY25 and EBITDA margin expansion from -7.1% in FY24 to 16.5% in FY25.

The miss on the Revenue and EBITDA guidance is attributable to intense competition on the Ibuprofen range of products. We continued to do better than expected on the remainder of our portfolio.

Our product mix continues to be healthy with a majority of Revenues coming from the Regulated markets.

Going ahead, we will continue our ongoing actions on improving profitability through cost improvement programs, operating cost optimization, optimizing working capital and debt as we pivot the organization from reset to growth.

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Improved Quality of Earnings, Margin Expansion and Operating Cost Reduction
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Revenues (INR Mn) and Gross Margin (%)

Regulated Market Revenues (INR Mn)

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4000 0.9
3641
3472
3500 0.8 2767
3011 3018 2639
0.7
3000 2790
2294
2500 50.5% 55.5% 0.6 2047 2143
46.7% 44.5% 57.5% 0.5
2000 76% 77%
0.4 76%
1500
0.3 76%
1000
0.2
68%
500 0.1
0 0
Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25
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Operating Cost (INR Mn)
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1296
1200
1138
1082 1095
Q4'24 Q1'25 Q2'25 Q3'25 Q4'25
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• Significant improvement in Gross Margin at 57.5% & EBITDA margins at 18.3%

• Improved margin profile attributed to cost improvement programs and operating cost optimization.

• Improved quality of earnings over the last four quarters with more focus on healthy product mix and Regulated markets.

• Significant operating cost reduction over the last four quarters leading to opex leverage. The Operating cost for FY25 at INR 4,511 Mn vs INR 5,808 Mn in FY24; reduced by INR 1,297 Mn YoY

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Q4’25 and FY25 Performance
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Q4’25 QoQ and YoY Performance (INR Mn)

FY25 YoY Performance (INR Mn)

Particulars	Q4’25	Q3’25	Change	Q4’24	Change
Revenue	2,790	3,018	-8%	3,011	-7%
Gross Margin	1,605	1,673	-4%	1,412	14%
Gross Margin %	57.5%	55.4%	213 bps	46.9%	1,063 bps
Operating cost	1,095	1,082	0%	1,300	-16%
EBITDA	510	591	-14%	112	355%
EBITDA Margin %	18.3%	19.6%	-132 bps	3.7%	1,458 bps
Exceptional items (gain)/loss	-	-		1,221
Depreciation	243	245		253
Finance cost (net)	288	265		304
Tax	-	-		-
PAT	(21)	81		(1,666)

• Regulated Markets constitute 77% of our total revenues (Q3’25 - 76%; Q4’24 – 68%)

• Gross Margin at 57.5%, up by 213 bps QoQ driven by Product mix change, improved Regulated market mix and our continued focus on profitable products and cost improvement programs

• EBITDA margin at 18.3%, down by 132 bps QoQ and significant improvement YoY

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Particulars FY25 FY24 Change
Revenue 12,921 12,943 -
Gross Margin 6,649 4,891 36%
Gross Margin % 51.5% 37.8% 1,370 bps
Operating cost 4,511 5,808 -22%
EBITDA 2,138 (917) 100+%
EBITDA Margin % 16.5% -7.1%
-
Exceptional items (gain)/loss 1,902
Depreciation 992 1,033
Finance cost (net) 1,140 1,029
Tax - (785)
PAT 6 (5,666)
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• Regulated Markets constitute 76% of our total revenues (FY24 – 66%)

• Gross Margin at 51.5% up by 1,370 bps YoY

• EBITDA margin at 16.5% significant improvement YoY

• Our ongoing actions on improving profitability through cost improvement programs, operating cost optimization, optimizing working capital and debt will yield benefits in the coming quarters

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Performance against Q4’25 and FY25 Guidance
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FY25 Guidance

FY25

Performance

Update on FY25 Guidance

Revenue

₹ 15,000 Mn+ EBITDA ₹ 2,300 Mn-₹ 2,600 Mn EBITDA 15%-17% Margin

₹ 12,921 Mn

₹ 2,138 Mn

16.5%

Revenue trending lower than guidance due to increased competition on Ibuprofen range of products and the Company’s focus on margin expansion

~93% achieved

In line with guidance

Q4’25 Exit Quarter Revised Guidance

Q4’25 Performance

Update on Q4’25 Exit Quarter Guidance

₹ 3,400 Mn- ₹ 3,600 Revenue Mn EBITDA ₹ 700 Mn - ₹ 800 Mn EBITDA 20%-22% Margin Net Debt to EBITDA* <2.5 times

₹ 2,790 Mn

₹ 510 Mn

18.3% ~2.1 times

Revenues were lower than guidance on account of continued price pressure on Ibuprofen range of products and the Company’s focus on margin expansion

~73% achieved

~92% achieved

In line with guidance

*Net Debt – Adjusted for the uncalled money on the Rights issue

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Our Focus remains on strengthening the Balance Sheet
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Sources of funds (INR Mn)

Particulars	Mar’24	Mar’25
Shareholders' funds	9,339	10,969
Less: Goodwill	-3,651	-3,649
Net worth	5,688	7,320
Term Loan Working capital Loan	2,391 7,603	2,031 5,729
Gross Debt	9,994	7,760
Total	15,682	15,080

Use of funds (INR Mn)

Particulars	Mar’24	Mar’25
Net Tangible Fixed Assets	11,166	10,787
Net Non-current Assets	1	(175)
Net Current Assets	4,515	4,468
Total	15,682	15,080

Net Debt (INR Mn)

Particulars	Amount
Gross Debt as on Mar’24	9,994
Add: New Term loan	750
Less: Repayment from Rights issue application money	( 1,186)
Less: Other repayments	(748)
Gross Debt as on Mar’25	7,760
Less:Post realization of first call money of the Rights Issue in which 75% will be used for debt repayment	(1,130)
Less: Repayment from Operating Cash Flows	(158)
Expected Gross Debt by end of May’25	6,472
Less: Post realization of second call money of the Rights issue in which 75% will be used for debt repayment	(1,063)
Less: Repayment from Operating Cash Flows	(948)
Expected Net Debt by May’26	4,461
▸During FY25, we reduced our Gross Debt from INR 9,994 Mn to INR 7,760 Mn; a reduction of
INR 2,234 Mn (INR 1,186Mn from Rights Issue application money and balance INR 748 Mn
from operating cash flows)

• The Net Debt by end of May’25 at INR 6,472 Mn post utilization of the 75% of the 1[st] call money towards debt reduction (Net Debt to EBITDA ~3 times)

• After adjusting for the uncalled Rights Issue money in which 75% will be used for debt repayment (INR 1,063 Mn) and repayment during FY26, our adjusted net debt by May’26 expected at ~INR 4,461 Mn (Net Debt to EBITDA ~2.1 times).

• Post carve-out of the CRAMS and Polymers business, which is subject to shareholders approval, there will be a push-down of INR 2,000 Mn of debt to the proposed entity., the net debt in May’26 is expected to be at ~ INR 2,461 Mn (Net Debt to EBITDA < 1)

Adjusted Net Debt to EBITDA (adjusted for the Uncalled Rights issue money & post push-down to the proposed CRAMS entity) < 1

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Update on the Demerger of the CRAMS and Polymers business from the Generic API business
(“Catalog API Business”)
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• Subject to Shareholders and statutory approvals, the Company announced the carve-out of the CRAMS and Polymers business, which delivered revenues of ~ INR 1,080 Mn in FY25 , from its’ Catalog API business on account of significantly different value drivers

for each business.

• The Catalog API business will benefit by having a stronger Balance Sheet with the transfer of INR 2,000 Mn of debt to the new

• Company and a higher ROCE & ROI.

• Consequent to the Rights Issue and the restructuring of the business, the Net Debt on the Catalog API business in May’26 is estimated at INR 2,461 Mn ( estimated Net debt to EBITDA at < 1 )

• The new company – “Synthix Global Pharma Solutions Limited”, housing the CRAMS and Polymers business, has been incorporated in April 2025 post the in-principle approval from the Board during the last quarter.

• The New Company shall invest and grow the CRAMS and Polymers business to size in 4-5 years thereby unlocking significant shareholder value.

• The Company would initiate the next steps with respect to securing all the necessary shareholder and statutory approvals in upcoming quarters.

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FY25 Key Updates and FY26 Outlook
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FY25 Key Updates:

• New management team took charge in Feb’25

• Continued to focus on high gross margin business

• Improved quality of Balance sheet

FY26 Outlook:

• Increased focus on Gross Margin and EBITDA growth

• Network optimisation to be prioritised.

• Revenue and EBITDA expected to grow marginally by 10% and 15%-20% respectively.

• The Net Debt in May’26 is expected to be at ~ INR 2,461 Mn (Net Debt to EBITDA at < 1)

• After adjusting for the uncalled Rights Issue money and repayment during FY26, our Net Debt is expected to be at ~INR 4,461 Mn (Net Debt to EBITDA ~2.1 times)

• Post carve-out of the CRAMS and Polymers business, which is subject to shareholders approval, there will be a push-down of INR 2,000 Mn of debt to the proposed entity.

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Thank you