Shares of Solara Active Pharma Sciences were locked at 20 per cent lower circuit limit at Rs 775.05, also its 52-week low, on the BSE on Thursday after the company reported a consolidated net loss of Rs 140 crore in December quarter (Q3FY22), due to lower revenue. The pharmaceutical company had posted a profit of Rs 65.78 crore in the year-ago quarter (Q3FY21).
The stock has corrected 58 per cent from its 52-week high level of Rs 1,859.30 touched on May 19, 2021. Till 09:33 am, around 55,000 shares changed had hands and there were pending sell orders for 770,000 shares on the NSE and BSE.
In Q3FY22, the company’s revenue declined 74 per cent sequentially and 76 per cent year-on-year (YoY) to Rs 105 crore. It reported operating loss of Rs 81.7 crore as against profit of Rs 88.5 crore in Q3FY21.
During the quarter, revenue from operations declined on account of continued demand softness of Ibuprofen & few other key products and delay in approval for Covld-19 products. Further, the Group also accounted for provision towards sales return to execute its strategy of shifting towards sales to direct customer by significantly limiting sales through channel.
The management said besides this one-off impact, “Solara’s Q3FY22 performance was muted mainly due to subdued regulated market demand and higher costs driven by volatile material pricing environment and increased logistics cost”.
That said, the management believes that the situation has bottomed out on the demand side, and the business would start seeing normalcy from the Q4FY22.
“We remain committed to delivering our long-term goals on growth and profitability, and we expect to bounce back from the second half of next fiscal. In the near term, we expect the topline trajectory to be back to pre-Q3 FY22 levels,” the management said.
Meanwhile, Solara announced that Bharath R Sesha has tendered his resignation as managing director & chief executive officer and director (MD & CEO) of the company to pursue interests outside the company. Rajesh Salwan, who currently is the executive vice chairman of the company, has been given the additional responsibility of MD & CEO, the company said.