Know why shares of Solara Active Pharma Sciences gained by nearly 19 per cent in a day

On Wednesday, the shares of Solara Active Pharma Sciences jumped by around 18.55 per cent. The primary reason for this was the outperforming rating given by a brokerage firm.

After initiating coverage on the stock, the brokerage firm Macquarie gave an outperforming rating to the stock. According to the brokerage firm, the company is considered to be among the top three pure-play API manufacturers in India.

Compared to its peers, the company’s growth outlook seems to be more positive with a long-term focus and growing presence in the contract research & manufacturing services (CRAMS) segment. Solara continues to focus on sterile, high potent and fermentation-based APIs. In high volume APIs like Ibuprofen, the company tends to enjoy a global cost leadership.

Also, the company’s financial base looks strong with better sustainable growth. Analysts at Macquarie believe that it is one of the cheapest API stocks globally and has strong upside potential.

The company has also seen an increase in the shareholders’ stakes. After the equity infusion in January 2019, the global private equity firm TPG Capital is also now a stakeholder in the company. Currently, according to the brokerage report, the promoter group holds a 45 per cent stake in the company as of September 30, 2020, while data on BSE shows that the promoter group of the company held a 41.88 per cent stake in the company as of June 30, 2020.

The stock of Solara Active Pharma has jumped by 212.43 per cent in one year and gained by 24.92 per cent in the last one month. Currently, the stock of the company is trading at Rs 1,169.05 per share, up by 11.32 per cent or Rs 118.90 per share. On Wednesday, the stock made a fresh 52-week high of Rs 1,245 per share on BSE.