NSEI:SOLARA

Stock Analysis Report

Solara Active Pharma Sciences

Executive Summary

Solara Active Pharma Sciences Limited manufactures and sells active pharmaceutical ingredients (API) worldwide.

Rewards

Trading at 74.8% below its fair value

Earnings are forecast to grow 18.12% per year

Earnings grew by 183.1% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Significant insider selling over the past 3 months



Snowflake Analysis

Very undervalued with acceptable track record.

Share Price & News

How has Solara Active Pharma Sciences's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOLARA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.5%

SOLARA

-2.0%

IN Pharmaceuticals

-2.9%

IN Market


1 Year Return

49.2%

SOLARA

-5.4%

IN Pharmaceuticals

2.8%

IN Market

Return vs Industry: SOLARA exceeded the Indian Pharmaceuticals industry which returned -5.4% over the past year.

Return vs Market: SOLARA exceeded the Indian Market which returned 2.8% over the past year.


Shareholder returns

SOLARAIndustryMarket
7 Day-5.5%-2.0%-2.9%
30 Day0.6%1.6%-1.4%
90 Day-10.1%1.9%6.2%
1 Year51.9%49.2%-4.6%-5.4%4.8%2.8%
3 Yearn/a-15.4%-17.2%31.3%24.4%
5 Yearn/a-7.4%-10.2%42.7%29.9%

Price Volatility Vs. Market

How volatile is Solara Active Pharma Sciences's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Solara Active Pharma Sciences undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SOLARA (₹420.4) is trading below our estimate of fair value (₹1665.87)

Significantly Below Fair Value: SOLARA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SOLARA is good value based on its PE Ratio (6.6x) compared to the Pharmaceuticals industry average (15x).

PE vs Market: SOLARA is good value based on its PE Ratio (6.6x) compared to the Indian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: SOLARA is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: SOLARA is good value based on its PB Ratio (1.1x) compared to the IN Pharmaceuticals industry average (1.3x).


Next Steps

Future Growth

How is Solara Active Pharma Sciences forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

18.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOLARA's forecast earnings growth (18.1% per year) is above the savings rate (6.5%).

Earnings vs Market: SOLARA's earnings (18.1% per year) are forecast to grow slower than the Indian market (19.6% per year).

High Growth Earnings: SOLARA's earnings are forecast to grow, but not significantly.

Revenue vs Market: SOLARA's revenue (11.5% per year) is forecast to grow faster than the Indian market (11.5% per year).

High Growth Revenue: SOLARA's revenue (11.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SOLARA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Solara Active Pharma Sciences performed over the past 5 years?

183.1%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: SOLARA has high quality earnings.

Growing Profit Margin: SOLARA's current net profit margins (7.3%) are higher than last year (3.8%).


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if SOLARA's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Insufficient data to compare SOLARA's past year earnings growth to its 5-year average.

Earnings vs Industry: SOLARA earnings growth over the past year (183.1%) exceeded the Pharmaceuticals industry 19.2%.


Return on Equity

High ROE: SOLARA's Return on Equity (10.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Solara Active Pharma Sciences's financial position?


Financial Position Analysis

Short Term Liabilities: SOLARA's short term assets (₹7.0B) do not cover its short term liabilities (₹7.6B).

Long Term Liabilities: SOLARA's short term assets (₹7.0B) exceed its long term liabilities (₹3.2B).


Debt to Equity History and Analysis

Debt Level: SOLARA's debt to equity ratio (57.8%) is considered high.

Reducing Debt: Insufficient data to determine if SOLARA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SOLARA's debt is well covered by operating cash flow (49%).

Interest Coverage: SOLARA's interest payments on its debt are not well covered by EBIT (2.5x coverage).


Balance Sheet

Inventory Level: SOLARA has a high level of physical assets or inventory.

Debt Coverage by Assets: SOLARA's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Solara Active Pharma Sciences's current dividend yield, its reliability and sustainability?

1.19%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%0.6%markettop25%2.6%industryaverage0.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: SOLARA's dividend (1.19%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: SOLARA's dividend (1.19%) is low compared to the top 25% of dividend payers in the Indian market (2.56%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether SOLARA's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if SOLARA's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (7.9%), SOLARA's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Solara Active Pharma Sciences's salary, the management and board of directors tenure and is there insider trading?

1.2yrs

Average management tenure


CEO

Bharath Sesha 0

0yrs

Tenure

0

Mr. Bharath R. Sesha serves as Chief Executive officer at Solara Active Pharma Sciences Limited since December 09, 2019. He joins Solara from Nalco Water, India where he was the Managing Director. He serve ...


Management Age and Tenure

1.2yrs

Average Tenure

Experienced Management: SOLARA's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

1.7yrs

Average Tenure

51.5yo

Average Age

Experienced Board: SOLARA's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: SOLARA insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Buy₹417,52908 Nov 19
R. Ramakrishnan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max Price₹417.53
Sell₹14,871,59906 Nov 19
Chaitanya Vaidya
EntityIndividual
Shares36,000
Max Price₹413.10
Buy₹364,14502 Jul 19
Pooja Srisrimal
EntityIndividual
Shares820
Max Price₹444.08
Buy₹179,00001 Jul 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares400
Max Price₹447.50
Buy₹666,28527 Jun 19
Pooja Srisrimal
EntityIndividual
Shares1,500
Max Price₹444.19
Buy₹2,242,00027 Jun 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,100
Max Price₹439.61
Buy₹443,00025 Jun 19
Pooja Srisrimal
EntityIndividual
Shares1,000
Max Price₹443.00
Buy₹666,00025 Jun 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,500
Max Price₹444.00
Buy₹1,337,05421 Jun 19
Pooja Srisrimal
EntityIndividual
Shares3,000
Max Price₹448.31
Buy₹1,107,00021 Jun 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max Price₹442.80
Buy₹3,315,77518 Jun 19
Pooja Srisrimal
EntityIndividual
Shares7,039
Max Price₹484.45
Buy₹3,968,00018 Jun 19
Shekama Family Trust
EntityCompany
Shares8,750
Max Price₹453.49
Buy₹1,651,00029 May 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,750
Max Price₹440.27
Buy₹342,00029 Mar 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares800
Max Price₹427.50
Buy₹3,286,43428 Mar 19
Spiracca Ventures Llp
EntityCompany
Shares7,500
Max Price₹438.83
Buy₹3,851,06626 Mar 19
Shekama Family Trust
EntityCompany
Shares8,763
Max Price₹445.63
Buy₹6,747,63725 Mar 19
Spiracca Ventures Llp
EntityCompany
Shares15,000
Max Price₹451.31
Buy₹1,122,00021 Mar 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max Price₹448.80
Buy₹23,19220 Mar 19
Deepak Vaidya
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman of the Board
Shares52
Max Price₹446.00
Buy₹15,399,27915 Mar 19
Spiracca Ventures Llp
EntityCompany
Shares35,000
Max Price₹440.94
Buy₹4,330,44313 Mar 19
Spiracca Ventures Llp
EntityCompany
Shares11,000
Max Price₹396.52
Buy₹978,00011 Mar 19
Shekama Family Trust
EntityCompany
Shares2,500
Max Price₹391.20
Buy₹2,692,00011 Mar 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,000
Max Price₹391.20
Buy₹6,310,26811 Mar 19
Spiracca Ventures Llp
EntityCompany
Shares16,500
Max Price₹384.35
Buy₹3,481,66107 Mar 19
Nirmal Bhogilal
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,000
Max Price₹389.31
Buy₹3,909,80607 Mar 19
Deepak Vaidya
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman of the Board
Shares10,000
Max Price₹390.98

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Bharath Sesha

    Chief Executive Officer

    • Tenure: 0yrs
  • Jitesh Devendra (41yo)

    MD & Director

    • Tenure: 2.8yrs
    • Compensation: ₹38.99m
  • Subramaniam Hariharan

    CFO, Executive Director of Finance & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹17.14m
  • B. Reddy

    Chief Operating Officer

    • Tenure: 1.7yrs
    • Compensation: ₹15.51m
  • V. Moorthy

    Chief Quality Officer

    • Tenure: 0yrs
  • Swaminathan Srinivasan

    Senior Vice President of Research & Development

    • Tenure: 0yrs
  • S. Murali Krishna

    Company Secretary

    • Tenure: 0.7yrs
    • Compensation: ₹4.20m
  • Venky Rangachari

    Chief Business Officer

    • Tenure: 0.6yrs

Board Members

  • Deepak Vaidya (74yo)

    Non-Executive Chairman of the Board

    • Tenure: 0yrs
    • Compensation: ₹1.10m
  • Nirmal Bhogilal (70yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: ₹1.10m
  • Jitesh Devendra (41yo)

    MD & Director

    • Tenure: 2.8yrs
    • Compensation: ₹38.99m
  • Ankur Thadani (35yo)

    Non-Executive Director

    • Tenure: 0.6yrs
  • Kausalya Santhanam (52yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: ₹1.10m
  • R. Ramakrishnan

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: ₹1.10m
  • Ron de Vries (51yo)

    Independent Director

    • Tenure: 1.2yrs
    • Compensation: ₹400.00k
  • Subramaniam Hariharan

    CFO, Executive Director of Finance & Executive Director

    • Tenure: 2.8yrs
    • Compensation: ₹17.14m

Company Information

Solara Active Pharma Sciences Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Solara Active Pharma Sciences Limited
  • Ticker: SOLARA
  • Exchange: NSEI
  • Founded: 2017
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: ₹10.925b
  • Shares outstanding: 26.04m
  • Website: https://www.solara.co.in

Location

  • Solara Active Pharma Sciences Limited
  • Batra Centre
  • 3rd & 4th Floor
  • Chennai
  • Tamil Nadu
  • 600 032
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SOLARANSEI (National Stock Exchange of India)YesEquity SharesININRJun 2018
541540BSE (Mumbai Stock Exchange)YesEquity SharesININRJun 2018

Biography

Solara Active Pharma Sciences Limited manufactures and sells active pharmaceutical ingredients (API) worldwide. The company offers APIs for antimalarial, anxiolytic, anticonvulsant, anthelmintic, antifunga ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 13:06
End of Day Share Price2019/12/12 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.