The company's revenue contracted 21% to Rs 308.90 crore in Q4 FY20 from Rs 391.90 crore in Q4 FY19. Operating EBITDA fell 10% on a year-on-year (YoY) basis to Rs 72.40 crore during the quarter. However, operating EBITDA margins improved by 290 bps to 23.4% in Q4 FY20 from 20.5% in Q4 FY19.

During the fourth quarter, the company successfully completed the United States Food and Drug Administration (US FDA) inspection of its Puducherry and Mangalore facilities with zero 483s.

Solara said that Q4FY20 results were partially impacted by the countrywide lockdown due to COVID-19. The company took a temporary shutdown across all its locations w.e.f. 23 March 2020.

The company's net profit increased by 71% to Rs 114.5 crore despite a 4% fall in revenues to Rs 1349.3 crore in the full year ended on 31 March 2020 as compared to the full year ended on 31 March 2019.

Top ten customers and ten products accounted for 50% and 77% of revenues respectively in FY20. Solara filed two new drug master files (DMFs) in the US market in Q4FY20 with a total of four new US DMFs in FY20. The company completed market extensions for six of its existing products to nine new markets in FY20.

Following the US drug regulator's statement on Ranitidine, which is one of Solara's top ten APIs and contributes approximately 7% of its total revenue, the company has stopped manufacturing and sale of Ranitidine for the US market. The firm do not foresee any significant impact on our growth trajectory and continue to maintain a positive outlook for the future.

Commenting on the performance, Jitesh Devendra, managing director, remarked “We started FY20 with a theme to focus on efficiencies and better utilization of our resources, and we are pleased to report a positive trend in our operating margins and profitability. However, from a revenue standpoint, we reported degrowth for the year, and this outcome had been a consequence of several factors, including an unprecedented temporary disruption due to Covid-19. Following the advisory issued by the authorities, we took a temporary shutdown across our locations. We have also taken several proactive measures towards providing a safe working environment for our employees and ensure business continuity for our partners.

While this global pandemic has brought the world to a screeching pause, we believe that the pharmaceutical industry, globally, would see a faster pick up as the companies discharge their responsibilities towards the patients in need.

Despite the Covid19 situation and discontinuance of Ranitidine by USFDA, a top 10 product for us, we expect Solara to have a healthy performance in the year 2020-21.

We believe fiscal 2021 will be a year of accelerating growth which will hinge primarily on new capacity from our recently commissioned facility at Vizag, our CRAMS (custom research and manufacturing services) business, and by expanding our existing APIs to new markets, new customers and ramping up our new product filings.”

Solara Active Pharma Sciences offers a basket of diversified, high-value commercial APIs and contract manufacturing services in over 75 countries. It has a manufacturing base comprising five globally compliant API facilities, with approvals including the USFDA, EU GMP and PMDA in Japan.