Revenue and Operating Performance Trends
Over the seven-year period ending March 2025, Solara Active's net sales exhibited variability, peaking at ₹1,616.88 crores in March 2021 before declining to ₹1,283.76 crores by March 2025. The total operating income mirrored this trend, with a high in 2021 and a gradual decrease thereafter. Raw material costs, a significant expense component, fluctuated notably, reaching a low in 2025 at ₹581.66 crores compared to ₹858.86 crores in 2022, reflecting possible operational adjustments or cost efficiencies.
Employee costs steadily increased from ₹185.81 crores in 2019 to ₹211.69 crores in 2025, indicating investment in human resources despite revenue pressures. Other expenses remained relatively stable, hovering around ₹239 to ₹335 crores, suggesting consistent operational overheads.
Operating profit before other income (PBDIT excl OI) showed considerable volatility, with a peak of ₹385.87 crores in 2021, followed by a sharp dip into negative territory in 2024, before recovering to ₹206.28 crores in 2025. This fluctuation underscores challenges in maintaining consistent profitability amid market or operational headwinds.
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Profitability and Margins
Profit before tax (PBT) and profit after tax (PAT) figures reveal a turbulent profitability landscape. After a strong positive PBT of ₹221.50 crores in 2021, the company experienced significant losses in 2022 and 2023, with PBT plunging to negative ₹488.42 crores in 2024. The PAT followed a similar pattern, swinging from a profit of ₹221.35 crores in 2021 to a loss of ₹566.96 crores in 2024, before a marginal positive PAT of ₹0.54 crores in 2025.
Correspondingly, earnings per share (EPS) reflected this volatility, with a high of 61.64 in 2021 dropping to a negative 145.26 in 2024, and a slight recovery to 0.13 in 2025. Operating profit margins excluding other income ranged from a robust 23.87% in 2021 to a negative margin in 2024, recovering to 16.07% in 2025. PAT margins followed suit, peaking at 13.69% in 2021 and falling to -43.99% in 2024, before stabilising near zero in 2025.
Balance Sheet and Financial Position
Solara Active's balance sheet shows a steady increase in shareholder's funds from ₹1,085.94 crores in 2020 to ₹1,094.24 crores in 2025, despite fluctuations in reserves. Total debt peaked around ₹1,024.57 crores in 2022 before declining to ₹776.06 crores in 2025, indicating efforts to deleverage. The company's net block of fixed assets remained relatively stable, around ₹1,133 crores in 2025, with capital work in progress increasing notably to ₹280.05 crores, signalling ongoing investments.
Current assets decreased from ₹1,239.28 crores in 2022 to ₹728.73 crores in 2025, while current liabilities also declined, resulting in negative net current assets in recent years, which may point to liquidity pressures. Cash and bank balances dropped significantly from ₹198.54 crores in 2021 to just ₹4.11 crores in 2025, reflecting tighter cash positions.
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Cash Flow and Operational Efficiency
Cash flow from operating activities has been inconsistent, with positive inflows in most years but a notable negative outflow in 2022. The company generated ₹212 crores in operating cash flow in 2025, a recovery from the previous year. Investing activities consistently showed cash outflows, reflecting ongoing capital expenditure and investments. Financing activities varied, with significant inflows in 2022 followed by outflows in subsequent years, indicating active debt management and capital restructuring.
Net cash inflow/outflow figures highlight a generally tight liquidity scenario, with a small net outflow of ₹4 crores in 2025 after a break-even in 2024. The closing cash balance has diminished sharply from ₹197 crores in 2021 to just ₹3 crores in 2025, underscoring the need for careful cash management going forward.
Summary
In summary, Solara Active's historical performance has been marked by strong revenue peaks and profitability in 2021, followed by a challenging period of losses and margin contractions through 2022 and 2024. The company has shown signs of stabilisation in 2025 with modest profitability and improved operating margins. Balance sheet metrics suggest ongoing investment alongside efforts to reduce debt, though liquidity remains a concern given negative net current assets and low cash reserves. Investors should weigh these factors carefully when considering the company's prospects.
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