Solara Active Pharma Sciences Limited (SOLARA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Solara Active Pharma Sciences Limited Q4 F526 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Abhishek. Thank you and out to you, Abhishek.

Thank you, NGO. Good afternoon, and thank you all for joining us today for Solara earnings call for the fourth quarter in financial year, 2026. Today, we have with us Sandeep, MD and CEO, and Sharad, CFO, the company, to share the highlights of the business and financials of the quarter in financial year. I hope you've gone through our results release and the quarterly investor presentation that have been uploaded on our website as well as the stock exchange website. The transcript of this call will be available in a week's time on the company's website. Please know that today's discussion must be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of the call, in case you have any further questions, please feel free to reach out to the InvestorSolution team. I now hand over the call to Sandeep to make his opening comments.

Thank you, Abhishek. A very nice good afternoon to all of you joining in today's Q426 earnings call. I sincerely appreciate your time and presence in this call. Q426 has been very good for us. Our business has delivered the highest revenue, gross margins, and EBITDA in the previous eight quarters. In Q426, our overall business has demonstrated a very strong sequential growth, QOQ of 12%, and an EBITDA growth of 65% QOQ. The primary driver of the strong performance has been undeniably our base business, which continues to gain momentum. As you know, this business has already demonstrated superior profitability. It operates at 26% EBITDA margin with gross margins of 54%. This further reinforces the objective we established at the start of the year, which was to pivot our business from a phase of reset to one that is defined by sustainable, profitable, and reliable growth. On ibuprofen, we continue to face persistent headwinds in this business where we recorded a negative EBITDA. We've appointed bankers to evaluate, our board has appointed bankers to evaluate strategic options for ibuprofen, and we expect this process to finish in the next two quarters. Consequent to this, the carve-out of the polymers in the grams business has been put on hold till such time as we can finalize the strategic options for the ibuprofen business in H-127. Just coming to a snapshot of our financial performance for the current quarter. Revenue has a 12% QOQ growth. We delivered 382 crores. Gross margins are at 47% with an absolute value of 184 crores for the quarter. This reflects improvement of gross margin by 170 basis points on a QOQ basis. The operating cost for the quarter is flat, QOQ-driven. This has resulted in an EBITDA of 61 crores, which reflects a significant QOQ growth of 65%. Business contribution from our developed markets, which is our mainstay, continues to be at 75% of overall sales. A short note on the crisis in the Middle East, Despite the significant crisis we've had in the Middle East and its impact on global business, I'd like to reiterate that the fundamentals of our base business continue to be strong. It continues to be supported by a resilient operating model and a healthy product mix across the developed markets. Lastly, I would like to thank our shareholders for your continued support, your trust in Solara, and for continuing to remain invested in Solara. With this, I will hand over the call to Sarat Kumar, our Chief Financial Officer.

Thank you, Sandeep. Ladies and gentlemen, good morning, good afternoon, and good evening to all of you. And thank you for joining me today's Q4 F526 earnings call. As shared by somebody, despite facing headwinds in our ibuprofen business, the overall Solara business has recorded a strong quarterly result in Q4 of F526, the business reporting its highest revenue gross margin as well as EBITDA in the previous eight quarters. The operating costs for the quarter were flat Q on Q and hence having a superior operating So, our business has clogged in EBITDA margin of 16% with an absolute EBITDA value of 61 floors plus, which reflects a significant growth of 65% Q on Q because we had quite few subdued quarters in Q 2 and Q 3. As we continue to focus our efforts on operating cost leverage and margin expansion, we are very confident of chasing incremental business growth at a

healthier margins going forward.

Towards our journey for a healthier balance sheet, we have been able to reduce our debt by roughly 158 odd gross during FY26, which actually signifies close to 21 percent reduction in the debt during the year, out of which 113 gross came up from the first call money of rights which we had in May 26. And then balance 45 crores were actually paid off from our operational cash flows. Further, we have a line of sight to reduce the debt to sub close to 503 odd crores by end of May 26, which is predominantly driven by the second and final call money proceeds, which we are expecting to be utilized by end of this month. Once again, we actually thank you for your support and patience. Thank you. As our NDA team works towards turning around this company, and we are happy to take your questions, if any.

Thank you.

Thank you.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sajal Kapoor with anti-fragile thinking. Please go by.

Yeah, hi. Thank you for the opportunity. Hi, team. Encouraging performance for sure. I've got a few questions, please. Q4 clearly showed momentum in the base business, but how much of the improvement reflects the structural change in utilization, customer mix, and operating leverage versus some of the more temporary factors that might have influenced Q4 performance, such as inventory, restocking, spot orders, or favorable product mix, perhaps?

Hi. So let me go first. Hi, Sajal. Yeah, hi. Firstly, if you see our revenue growth, we've grown 12%. We've grown from around the base business. Yeah, so on the base business, Sajal, we have a very healthy order book, and you've seen that in our numbers as well. So I'm very encouraged looking at this order book and the utilization across our facilities. That there is a strong performance and it is not factors outside our control that are really favoring our business.

So, Sandeep, I mean, what I'm trying to understand is there is no cyclical kind of one-off, like a spot order or some customer pre-polling purchases or a favorable product that may not repeat.

No, no, no, Sajjee. There's nothing one-off there. And like always, our story continues. Despite all the headwinds we are facing and the money that we are losing on the agriculture business, I think our base business is what's driving the momentum, is what's keeping the tailwinds on. Okay, coming back to your question, there's no one of you.

Yeah, yeah. Yeah, yeah.

No, excellent.

And then, so just to continue from there, I mean, at what, at current utilization level, how should investors think about incremental margins and from the base business itself, specifically, you know, what proportion of incremental revenue Can convert into EBITDA before meaningful new fixed costs or capex might be required. So I'm just trying to get my head around that, you know, how much spare capacity is still in the system. We could get some disproportionate benefit, i.e. the operating leverage, without introducing fixed costs, because the nature of the business is nonlinear, right?

So the story here is very clear. We want to keep our OPEX days minimal, and we have to increase year on year. But on the same OPEX days, we want to grow our business. So if you look at our capacities, we are currently using around 70% of our capacity. So there is enough capacity, there's around 30% capacity left that we can utilize. Of course, we can't utilize all 100% of it, but there's enough spare capacity that we can utilize. Having said that, If you remember the few calls we had a couple of quarters earlier, we've done some de-bottlenecking projects. This is not big capex, these are not green fields and brown fields, they're just improving cycle times on the line and so on. And those have also started showing up. So we've got some additional capacity for high margin products, while at the same time, we do have capacity across our sites for the existing product.

That's helpful, Kandeep. And finally, are you seeing customer relationships kind of deepen in a way that supports a multi-year growth visibility for the base business through larger share of wallets, longer contracts or integration into customer supply chain rather than just near-term order momentum? I mean, how do you see, you know, slightly medium-term, let's say, FY28 onwards?

So, very good question, Sajal. I think you are right. A lot of our time and attention was taken by the Ibuprofen business. To grow this base business, we've had to really invest a lot of time and energy with our customers especially, talking about these products, widening our customer base. Increasing our share of wallet. So a lot of the story is about finding the new customers primarily and new geographies for our existing products in the base business.

That's helpful. That's all from my side, Sundeep. Wish you all the very best.

Thank you. Thank you. Next question comes from the line of Pranav Chawla with Ambit. Please go ahead.

Congratulations, sir, on a good set of numbers. Can you elaborate on what type of strategic options for ibuprofen business are we looking at? And from the best of my recollection, we were supposed to announce something in the fourth quarter. We were supposed to give an update regarding this business.

So, you know, this is taking us some time. In fact, we've mentioned in our report out that we've appointed banker to sort of give us strategic advice on this. Ibuprofen business has been a drag for us, continues to be a drag for us. In fact, you will see from our numbers that the EBITDA, it's eaten out of our existing EBITDA, right? I believe we will be in a better position to put out the conclusion on this strategic piece in H1 of this financial year. You have to give us some more time.

Got it. Sir, and one more thing, we've also seen improvement in realizations in ibuprofen globally in this quarter. Any particular reason why it is not clearly reflecting into our numbers? Have we wound down certain parts of this ibuprofen business?

So, uh, so Q4 by the time this particular war had started, all this pricing upticks what you're talking about which is, uh, slightly practical currently in the, uh, due to the ongoing crisis. So, this is something which is happening off lately, but for the for the period Q4 since most of our order book was already secured and those all the spices were agreed, we did not have got incremental like price shifts coming into these numbers. So, Q1 is something we might have some kind of a tactical, say, impact of those pricing in Q1. But that is something which is too early to say, until that time we actually don't have the entire order book.

Got it. Sir, and one last question on this ibuprofen business. How backward integrated are we in ibuprofen?

We are not backward integrated.

Are we completely backward integrated or we procure input materials from outside?

So, our starting material is IBAP. So, we are absolutely not backward integrated by any means.

So, we don't manufacture the IBAP. We source the IBAP from third process. Got it. Got it. Perfect.

Thank you so much, sir. That would be all for my interest.

Thank you. Next question comes from the line of Ankur Padhikar with Antic Stockbroking. Please go.

Yeah, thank you for the opportunity. A couple of questions from my side. So, in the previous Armin's call, the company had indicated plans to, like, bring the Vizac facility back into commercial production within the next five to six months. So, uh, could you provide an update on the progress against the timeline and like are we on track for commissioning as planned?

So, um, I'm sure, uh, as compared to Wysa, Wysa planned commissioning has been actually done long back in 2024, but however, from 2024, that site has been mothballed. So, what we had mentioned in the last earnings call as well saying that once we evaluate this entire strategic options related to ibuprofen, then we will take a strategic call whether we want to move ibuprofen from Pondi to Vizag or we want to reutilize Vizag for a different set of things. As Sandeep mentioned in the call earlier, we are still in the process of evaluating those options and you will have to give us time till H1 by when we will have a clear roadmap of exactly what we do with Wysas.

Okay. And management had also mentioned that the facility would be like repositioned as a multi-purpose plant with one block being converted into a high potent API manufacturing block. So, could you elaborate on the potential implications for margins over the medium to long term? Like, how do you see the business going forward in terms of margins over the medium term?

You know, the primary driver of this business in the medium, three-year horizon, if I might call it, will be our day's business from the existing business. It won't be Visag driving these numbers. So, it's existing business, current manufacturing sites that are going to be driving the growth and the revenue growth and the margin growth.

Okay, that's helpful. Thank you so much. Thank you. Next question comes from the line of Dhruv Setlani with Everflow Partners. Please go ahead.

Thank you for the opportunity, sir. Congratulations on the good set of you.

Mr. Setlani, sorry for interrupting. We cannot hear you. Can you come a little closer to the mic and speak?

Am I audible?

Yes. Can you speak a little more louder? Okay.

Thank you for the opportunity. Congratulations on the good set of numbers in the growth API business. The growth API segment, I just wanted to know what is the product concentration like of the active product, that is revenue contribution of the top one or top three or top five molecules, and is there any single product that is contributing around 10-15% of the growth API revenue?

So, thank you for this question. So, we actually don't have a single molecule or say single product driving the most of the growth, but roughly we have commercialized close to 69, 70 products in the entire portfolio what we sell currently, of which roughly top 15 to 20 products has a mix of close to 75% of the entire business. So, we are not overtly dependent on any one molecule driving that particular numbers, but yeah, we have a basket of close to top 15 products which actually drive these margins and numbers close to 75-80%.

Okay, thank you. That would be a great help. Another question that I have is in the cramps revenue. So, it's approximately around 100 crores at a good margin. What is the growth rate of cramps in FY26 versus FY25? And do we have enough order book or new contract coming up in FY26 that would move this materially in FY27?

So, Do these entire numbers of 100 crores what you are talking about referring to is that particular cramps plus polymers business what we had as a combined entity which was supposed to be carved out as part of syntax which we had announced earlier. However, in this entire numbers cramps is something which is very subscale. For example, our annual numbers from cramps are close to just 10-12 odd crores. And we don't have a, that kind of a stronger pipeline to give you those kind of projections on this.

Okay, sir. Another question I have is that in our base business, what sort of steady state EBITDA margins we expect to achieve in like next two, three years down the line?

We have been maintaining that we will be close to in the range of 25% plus minus here and there and this is something that we have been demonstrating quite consistently for the past few quarters and that is something which should hold true for next few quarters as well. Okay, sir.

Thank you so much. Last question I have. In product, other than innovation, how much market share do you have in India? And would we be among the leading players or not?

Few products like complex chemicals like polymers, we are one of the leading players in the world. So, definitely from a market share standpoint, we do have Close to 50% plus of the entire market share. But then apart from this, most of the other products are something which are pure plate catalog generates. So, we don't have that kind of a market share tracking for all those products. Okay, sir.

Thank you for your time. That was all from my side.

Thank you.

Thank you. Next question comes from the line of Prolin Nandu with Edelweiss Public Alternatives. Please go ahead.

Yeah, hi, team. So, Sandeep, just wanted to understand when you mentioned that you have appointed banker to evaluate strategic options, What all options are included in this, right? And what has changed since last quarter? Because even in last quarter, we were, you know, under the process of reviewing what to do with this segment. So what is the definition of, you know, strategic options? What all things are included there? And what has changed since last quarter?

So, good question there. So, we started this process last quarter, you are right, and we are seriously looking at what options we have. We have the traditional option of finding somebody who is better than us who can run the business, or we convert into a multi-product facility where besides ibuprofen, we focus on other products as well. So, we are looking at various kinds of options. At this point, it's too early for me to sort of spin down and say, this is what we're going to do. But as soon as we make up our mind on that, we will reach out to, we will reach out and we will let people know on what route we have selected.

Okay, but Sandeep, the second option, you would be the better person to know, right, whether to change it to some other facility. Where will banker come into the picture?

I think there there's a priority, right? In the sense that if we do find a qualified buyer for this business, that probably would be option number one. That's where the bankers come in. Failing which we will try and see whether we can exercise option number two. So we've kept all our options open in the States. I mean, listen, that business is something we've run for 40 odd years. We have very credible partners. We have some marquee customers, very sticky business. So we are very... We are very careful about what option we choose and how we go about exercising that.

Sure. No, Sandeep, that's helpful. Two follow-up questions, right? I mean, what can someone who acquires this business do differently than what you have done for 40 years? For someone to look at this asset, right, from a value generation perspective. And the second related question, as you mentioned, right, there are lots of relationships. So what is the repercussion on our non-Ibu propane business from a customer relationship point of view, which also will go into the consideration of what we do for our Ibu business?

So, let me take your second question first because that's an easier question. What are the repercussions? A, even if we decide on one of these options that we talked about and it impacts our existing ibuprofen customers, we will make sure that we communicate it accordingly and make sure customers have enough time to change over to an alternate source, right? So, we will make sure that we maintain our credibility and reputation in the market. I think customers, with an open and transparent communications, customers will understand where we come from. So we do not see it impacting the non-ibuprofen business. We do not see it impacting the non-ibuprofen business. On the first one, I think the buyer is in a better position to sort of answer why they would want to look at the facility. I do, look, look, I mean, We are talking about, we are not backward integrated, point number one. We don't manufacture the IVAB. Secondly, we also don't have access to new technologies that some of our companies have. So I think if there's somebody out there who would have the intent to invest in a new process, who would have the intent to backward integrate on this manufacturing, I would still make a very compelling case for that company.

No, Sandeep, that was very helpful. Thanks a lot and all the very best.

Thank you. Thank you. Next question comes from the line of Harshit Khadka with RoboCapital. Please go ahead.

Hello, am I audible? Yes, you are. Yes, sir. Thank you for the opportunity. It's good to see, you know, 15 plus percent EBITDA margins in Q4. I just wanted to understand, like, what kind of numbers can we achieve for FY27 and FY28 on revenue and EBITDA basis? Do we have any outlooks?

No, no, we will not give any output at this point. I actually believe that the good performance in this quarter is a start to many such good quarters, but at this point in time, my priority and my team's priority is going to be just dig our heels in here and try to get a quarter over quarter.

Okay, thank you. Good luck.

Thank you.

Thank you. Next question comes from the line of Amlan Chakraporty, AK Investing Company. Please go ahead.

Good afternoon, Mr. Team Solara. I think it's a great set of numbers. My question to you is very simple. How much percentage of R&D is Solara really spending on growing its API business?

So, I am going to thank you for this particular question, so R&D is something which we have spent roughly close to 200 crores in the past 4-5 years. However, having said that, at the same time, we are also mindful that our R&D engine has not been able to come up with at least one new product filing in the last four years as well. So, although we have spent our efforts on R&D, we have not been able to have success from those particular efforts. Having said that, our current annual rate of spend is close to 25 crores on R&D. And now we have entirely derived that R&D engine with exactly commercially focused products pipeline for filing etc. So, this is something which has started in just

late of FI 26 and

will be mostly in play from FI 27 onwards. But the fruits of which will be only reflecting through FI 29 or say FI 30 onwards, because once we start filing our products, by the time it's actually commercialized, there's a sufficient time then of two to three years in between.

I have one follow-up question also on this. Am I audible? Previously, since you said that Solara did not invest much of an R&D, but we had seen an uptick in the number of DMFs which were being filed. So can we expect that the number of DMFs which will be filed, there will be an uptick and also gradually the interest of the customers with respect to those DMFs can be expected to rise further.

Thank you. So, we have a plan to do four to five DMS filings every year to start. As Sarath mentioned, the last four years we had no meaningful DMS filings. So, and You know, at the end of the day, when you engage a customer, you need new products to talk about, right? So we have an active DMF filing plan. Hopefully we'll do four to five this year, four to five next year, and so on. But all this will start seeing impactful revenues and margins coming in around the FY29, FY30 timeframe.

Thank you so much, sir, for your question, for your effort. Thank you.

Thank you. Next question comes from the line of Prahneesh Padia with Exilem. Please go ahead. Mr. Pardia, please go ahead with a question. Mr. Pardia, please unmute yourself and go ahead with a question.

We can go to the next question.

Since there is no reply from the line of Mr. Pardia, we will move to the next question. That is from the line of Dheeraj Kumar Reddy with Alpha Square. Please go ahead.

Hi, sir. Thanks for the opportunity. I just wanted to understand how is the company thinking in the cramps division? What are the areas of therapies which the company is working on, and how should one think about, because given that we are unwinding the ibuprofen business, now the two main centers of Solara will be the base business and the cramps business, right? So, how should one think about the CRAM's business, what kind of modalities, therapies, the company would be able to move? Thank you.

So, as I said in one of my earlier comments, the driver of our business over the next three years is going to be our base business. The cramps business has been subscale for us and sort of even gave you some numbers around it. So, I think what we are going to focus is we are going to focus on catalog generates, we are going to focus on polymer APIs. We are also going to focus on certain select intermediates, but that's going to be what's going to drive the growth in FY27, FY28, and FY29. We are currently not capturing a lot of cramps driving that growth. Cramps is something I think we still need to get back to the drawing table and figure out what we are going to do specifically to cramps.

Got it. And in the base business, how do you see the growth going forward? I mean, what will drive this growth?

I think two things will matter here, one is can you expand that business, right, one is can you expand that business with the existing business, as I said, all the new filings will come beyond the three horizon, right, so can you see new businesses with new customers. Second is going to be about how we drive operational efficiency. Can we improve the yields of our products? Can we de-bottleneck our capacity for high-margin products? And the third is going to be how do we wisely focus on how do you optimally use our working capital and the free cash that we generate. I think these are going to be the three pivots around which our growth is going to be centered over the next period of years.

Got it. And can we, sir, can we just assume that, I mean, the aspiration is to grow beyond like 15-20% in this business?

Well, as I said earlier, I don't think we will give an outlook here, but we are hopeful that we will be able to repeat this quarter's performance going ahead.

Got it.

Thanks a lot. That's helpful. Thank you. Next question comes from the line of C.A. Shilpa Sabu, an individual minister. Please go ahead.

Hello. Thank you for taking my question, and congratulations on the good set of numbers. My first question about the Pondisserie plant is already answered. So, my second question is that what are your plans on the Mysore facility? It is a small facility and already in a residential sort of an area. So, what are your plans on that?

So, the Mysore facility is a 30-acre facility, and on that 30-acre facility in 5 acres, we have an intermediate manufacturing site. It does manufacturing, it manufactures one of the key intermediates of a product that we eventually manufacture in mind. So, at present, we will continue using it as an intermediate site manufacturing for our products within our ecosystem.

Okay, so thank you.

Thank you. Next question comes on the line of Rohit Koti with Marshmallow Capital. Please go back.

Thank you for the opportunity. Sir, could I ask you to please repeat the three focus areas you spoke about in the previous question?

Sure. Three focus areas for us is, one is expanding the existing business, which is seeking new customers for existing products. Second is driving operational efficiency, driving that to capacity B bottlenecking, yield improvement, cost improvement, and the third is going to be about wisely managing our finances.

So, coming a little bit on the financial, we have finished raising the third call, sorry, second call of the rights issue. Do we expect to raise more capital for growth or for debt paid on over the next two, three years, in your view?

So, after this rights money call issue, what has been already subscribed, we actually don't have any further plans to raise further capital, either through equity or debt at this point of time.

Understood. So, do you see the debt? I mean, it's been a phenomenal work, I think, from the peak debt of more than 1,000 crores. We have used both the rights money and the... Cash flow generated to paid on debt to quite a low level. So for, I mean, I wanted to hear your views on, for our business, which is a base business, of that quality and the growth plan that we have, how much debt do you think would be required? I would assume that it would be a risk-free company, given the quality of that business, what we have shown in the presentation of the last two-week quarters. But wanted to hear your views on that.

We also concur with kind of similar views. So, we have an internal target of making Solara debt-free by FY29.

Understood. So, this is debt-free. I'm guessing you're talking not just about long-term debt-free, you're talking about working capital debt-free as well, right? Understood. So, I have been invested in the company for the last two-odd years or three years, and personally, I have been very excited by the team that is in place right now. I mean, from whatever I have seen online, everybody from the CEO to Shara's CEO to the commercial officer, quality officer, all of you are from bigger organizations, much bigger organizations than Solara. And so the extrapolation from somebody like us is that the intent is... Interesting going forward or big going forward. So it would be nice to hear not a one, two-year view, but let's say three to five-year view, we have broadly three legs, right? Catalog generics, the high-performance APIs, and the cramps, which is very, very tiny right now. So over a three to five-year view, how do you see the team driving the company forward? The deck-free part was super helpful to hear, but anything else like capacity expansion? In the three pivots you talked about, you talked about more customers for existing products, but you didn't talk about new products. Could you speak about a long-term strategic mission for the company that the team has?

So let me take, there are a lot of questions in this one question. Firstly, thanks for million for staying invested in Solara, because I know with Solara, it's been like a year. There are quarters we do fairly well, and then there are quarters we don't perform to expectations. So thanks for staying invested. We've spent a lot of time putting a good team together. If you remember, Sarat and I joined this company in February last year. We followed up with hiring a very, very experienced chief commercial officer who joined us towards the end of the same month. Then we hired a chief human resources officer towards the middle of the year. So I think we have a good team in place, a good team that can steer this company to good results. In terms of capacity, we are not planning to take up any greenfield projects. There's no big capex that we're going to invest. In our existing facilities itself, we have around 30% capacity available. So I think it's going to be all about how smartly and wisely we can use this capacity for our... High margin products. I think the thing here is going to be how do we make use of optics leverage? How do we operationalize our business? I think those are going to be the key drivers. So we are very hopeful, though I will not give you a 3-5 year outlook. With a good team in place, with capacities available, and with all the new seedings that we've done in the market with our existing business, I'm really hopeful that we can keep this momentum going.

So, in terms of the outlook, I'm not looking for the numbers at all, just looking at more strategic direction in terms of what will you focus on more in terms of areas or products was the And when you speak about the 30% extra capacity available, I assume it is in the ex ibuprofen facilities. Is that right?

That is right. That is right. Because ibuprofen is a dedicated facility anyways, we can't do much else there.

Understood. And in terms of the areas you will focus on, I mean, so 30% sounds nice today, but over a three to five year horizon, I am guessing it will fall short of the aspirations we have. So do we have space in the existing facilities in the base business to expand capacity, brownfield expand if required?

So what we are doing is while we are not putting big capex, we are putting incremental capex, right? Incremental capex in trying to de-bottle certain lines which run high margin products, but we are falling short of. So we keep doing these incremental fixes and it's always nice to be in a position where all our facilities are filled and we're looking for new capacity. So I would really like to be in that position. But for now, I have the capacity and we have the immediate fixes that we've done through debodling exercises. In terms of the only other lever that I haven't talked about and since you mentioned a five-year horizon, the only other lever that I haven't talked about is R&D. And we have a full-time launch of the R&D Cars, which, as I said, we intend to provide four or five new EMFs every year, starting this year. And those products will start in the light of the day, and they are going in 30, 31 timeframe. So on a final horizon, we should see a growth momentum coming from new R&D products as well.

Thank you. Mr. Koti, please reach out to you for more questions. Next question comes from the line of JustPreachSync. An individual master, please go ahead.

Hello, am I audible?

Yes.

So, I wanted to ask what has been done in the last one year since you guys have come in the scene. What are the reasons or steps that you have been taken in the last one year?

Sorry, I didn't get the second part of the question.

Am I audible?

No, you are audible. I heard the first part of the question. Can you repeat the second part of the question?

You know, I wanted to ask what the decisions and steps that have you taken in the last one year or so.

Okay, so the five things we have done in the last one year, obviously, the first one was to study the shit. I think what this company needed was a very healthy order book. So, we've really worked on... Getting more customers to the table, finding new geographies for our products, so a lot of effort in the background has gone in increasing our market share, increasing our share of wallet, as somebody mentioned. The second thing is, as I was mentioning earlier, is about reigniting this R&D engine, because we put roughly 25 crores every year in R&D, and we would like to see meaningful EMS being filed. So we intend to have four to five DMS trial. In fact, we filed our first DMS in the first week of April. So there is already some traction there. The third is about how do we optimally utilize the capacity. So we initiated a lot of D-bottling exercises where we had good products with high margins, but we didn't have the capacity. So we initiated CAPEX and projects on these. Third, the fourth thing that we've done is obviously judicious use the limited working capital that we have, right? So with that, we are maintaining the fine balance between continuing our manufacturing, trying to pay off vendors as much as we can, and having money available for cap expense as well. So these are four areas that we've been working on. And the fifth one, which is also a very important one, is driving the organization towards performance. And there is a big people component in this as well. So we are trying to align people to be building a performance-oriented organization. Does that help, just please? Thank you.

Mr. Singh, please return to the queue for more questions. Next question comes from the line of Ketan R. Cheda, an individual master. Please go ahead.

Hi, thank you for the opportunity. Team, I'd like to ask, since the WISAC facility is northward, so I'm assuming that we are not generating any revenues from there, but at the same time, is there any expenses that we are incurring on that facility LAPS? How much are those expenses? Thank you.

Yeah, so... As you rightly said, this particular entire stride has been mothballed since 24. However, we have certain bare minimum fixed cost expenditure for that particular stride, which is to go 20 to 15% annually.

Thank you very much. And the other question I have is with respect to the options that you are trying to work out for the ibuprofen business. Now, you mentioned that, you know, one of the reasons why you would want to kind of, you know, look at buyers who could either bring in technology change or, you know, backward integration, which we are not doing right now. We are not backward integrated. So, my question is... to be done.

But, uh, isn't that, uh, The end of the day, ibuprofen is a commodity business, right? In one bucket, I have a commodity business, which is ibuprofen, and on the other bucket, I have a base business that is giving me 23-25% editor. I think...

Sorry, I think your voice is very buffened. Okay, I'll try and speak a little louder. Can you hear me now? Yeah, this is better, better. Thank you so much.

Okay, see, at the end of the day, ibuprofen is a commodity business, right? And a business that has continuously generated negative EBITDA for us. It's not today. It's been happening for the last few quarters. So from there, I see two businesses. I see one commodity business, which requires investment, and it gives me negative returns, and on the other hand, I see a base business that gives me 50-55% gross margins and 23-25% EBITDA. I would like to invest monies available on the base business so I can grow that business to something a lot more meaningful than the current base business. So that's where I think we would like to focus our enemies.

Okay, and then, you know, on the other hand, we also have the derivative, Ibu derivatives, which is profitable for us, if I'm not wrong. So, once we kind of, you know, high-walk the Ibu business, you know, what impact will that have on our derivatives business?

So, a derivative business is something which we intend to continue as it is. That is something which we are not looking at any strategic options at this point of view.

No, what I was trying to understand is like, you know, is any part of the iDo profane that we are generating is being used captively for our derivatives business? And if yes, then after the hiving off, assume we kind of hive off in whatever manner in the future, how would we then take care of the capital supply that we were having?

Either whoever will hire it off to continue manufacturing the ice cream for us, or we can go to third party and buy the ice cream. But you are right, the derivative business is the better part of the ITB business.

And the last question is, the change business that we have right now, if I compare it with the 25 numbers, we've kind of grown at about 600%. Is there a possibility that, you know, I mean, this business can grow at a better rate?

There is a lot of management time, attention.

All right. Thank you. Thank you so much for clarifying my questions. Wish you all the best.

Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments.

Thank you, everybody, and I'd like to reiterate thank you for your support. Thank you for staying invested in us. Your team is working really hard to make sure that we build on EQ4 performance and hopefully show quarters as good or better than this in the future. Thank you.

Thank you. On behalf of Solara Active Pharma Sciences Limited, we conclude this conference. Thank you for joining us. You may now listen to me.