Solara Active Pharma Sciences Limited (SOLARA) Q3 FY23 Earnings Concall Transcript

Solara Active Pharma Sciences Limited (NSE:SOLARA) Q3 FY23 Earnings Concall dated Jan. 25, 2023.

Corporate Participants:

Abhishek Singhal — Investor Relations Consultant

Jitesh Devendra — Managing Director

S. Hariharan — Executive Director and Chief Financial Officer

Analysts:

Unidentified Participant — — Analyst

Mahek Talati — YellowJersey Investment Advisors — Analyst

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

Nitin Agarwal — DAM Capital Advisors — Analyst

Mahesh Vyas — UTI Mutual Fund — Analyst

Gagan Thareja — ASK Investment Managers — Analyst

Pooja Rathi — YellowJersey Investment Advisors — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Solara Active Pharma Sciences Limited Q3 FY ’23 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhishek Singhal. Thank you, and over to you, Mr. Abhishek Singhal.

Mr. Abhishek, we cannot hear you.

Abhishek Singhal — Investor Relations Consultant

Sorry. Okay. Am I audible? Hello?

Operator

Yes, yes. Please go ahead.

Abhishek Singhal — Investor Relations Consultant

A very good afternoon to all of you, and thank you for joining us today for Solara Active Pharma Sciences’ Earnings Conference Call for the Third Quarter and nine months ended Financial Year 2023. Today, we have with us, Jitesh, Solara’s MD; and Hari, ED and CFO, to share the highlights of the business and financials for the quarter.

I hope you have gone through our results release and the quarterly investor presentation which have been uploaded on our website, as well as stock exchange website. The transcript of this call will be available in a week’s time on the Company’s website. Please note that today’s discussion will be forward-looking in nature and must be viewed in relation to risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to Investor Relations team.

I now hand over the call to management to make the opening comments. Jitesh?

Jitesh Devendra — Managing Director

Thank you, Abhishek. Good afternoon, everyone. Thank you for joining the call today. Before I get into the financial results, we take this opportunity on behalf of the promoters, the Board, the management, we’d like to thank all our investors, our bankers, our partners, customers, suppliers for reposing faith in Solara as we have returned to positive growth territory. So, thank you all once again.

Coming to the Q3 performance. The Q3 FY ’23 has been a turnaround quarter for Solara as we have achieved most of the targeted goals when we embarked on the cost correction journey last year. We had crossed our historical quarterly revenue run rate of INR400 crores, and our revenue stood at INR401.9 crores, growth by 17% sequentially. Gross margins improved by 308 basis points, and it stood at 47.3%. EBITDA grew 70% sequentially, standing at INR51 crores. We’d like to reiterate that our course correction strategy has started to yield positive results, which is visible from our Q3 performance. We continue to focus and build on the actions that we have initiated in this financial year to get back to growth, both in terms of revenue and margins, improving our cash flows, and strengthening our balance sheet.

Firstly, our base business has shown strong growth momentum in Q3 FY ’23 when compared with the previous two quarters. Regulated market revenues stood at 72% during the Q3 FY ’23. Regulated markets contribution has seen some improvements due to sales from our focus market, that is Brazil. Our base business has achieved EBITDA margins of 17.7%.

Coming to our R&D, we have filed two new US DMF, and are on track to file another four new DMF in Q4 FY ’23. That brings us to a total of six new DMF for this financial year. Apart from the new products, we continue to expand our geographical presence in existing products. Five market extensions were done for five existing products during the quarter three FY ’23, bringing to a total of nine market extensions for 15 existing products for nine months FY ’23. The investments we have made in new products since the inception of Solara are yielding us the results. We continue to invest in our R&D for strengthening our generic API portfolio and CRAMS to meet the growing demands for our existing products filed as part of increasing market share through market extensions and addressing regulatory requirements for new products.

Coming to Vizag, we have started manufacturing of intermediates and finally APIs during Q3, and sales were made to semi-regulated markets, which has led to a reduction in the under-recovery. We reiterate that we are confident about our Vizag strategy, and it is playing to the plan. We are making good progress for regulatory accreditations for our Vizag facility; first one, being the CP approval for ibuprofen, while we wait for US FDA inspections, which has been triggered by one of our major customer.

Out of the two new DMFs which we have filed in Q3, one of them has been filed from Vizag. So, to give an update on our Cuddalore site, while we wait for reaudit and reclassification of our Cuddalore site, we have taken action to qualify two critical products, which is being manufactured at Cuddalore, and that qualification has taken place, one in Pondi and second in Vizag. We will be including Vizag and Pondi as additional sites in the two product DMFs.

Our focus markets, Latin America and China, has seen traction. Our total number of filings in Brazil now stands at four. Our order book continues to improve each quarter, and cost improvement plans have started to deliver outcomes, resulting in better profitability in the coming quarters. On the CRAMS front, we have had good inroads in the US market while onboarding of our CRAMS Head for North America. We will see traction of these efforts in the next financial year. Meanwhile, the RFPs we have submitted in the first half of this year, we are confident that we will win some of those RFPs.

I now hand over to Hari to take us through the financials for Q3 FY ’23. Thank you.

S. Hariharan — Executive Director and Chief Financial Officer

Thank you, Jitesh. We are pleased to announce our quarter three results. The key highlights for the quarter are as follows: our revenue for quarter three is at INR401.9 crores. Our gross margin stands at 47.3%, improved by 300 basis points over quarter two FY ’23. Operating EBITDA at INR70 crores with a 17.4% margin, and reported EBITDA at INR51 crores at 12.7% margin. As Jitesh rightly pointed out, our course correction strategy have started to yield positive results, which were visible from our quarter three performance. Our immediate priority is to offset the under-recoveries at Vizag, and make, achieve breakeven and profitable growth in the near-term.

During this quarter, we initiated sales from our Vizag facility to semi-regulated markets, which has led to the reduction in under-recovery at Vizag during quarter three. Our net worth — our net current assets have reduced by INR42 crores in nine months, primarily due to the reduction in the inventory and GST follow-up refunds. We are looking to achieve comfortable net debt-to-EBITDA ratio. Our primary focus is improving our cash flow by prudent application of capital. We continue to remain focused on the actions to improve profitability. Very confident about the growth prospect of Solara.

Thank you.

Abhishek Singhal — Investor Relations Consultant

Deepak [Phonetic], can you take the Q&A, please.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Rohit Mundra [Phonetic], Individual Investor. Please go ahead.

Unidentified Participant — — Analyst

Hi, sir. So I have three set of questions. So first is that we are back to INR400 crores of quarterly revenue run rate, and could you please highlight what led to this growth during the quarter? And is this a sustainable base, going forward? And given historically, our Q4 has been the strongest quarter, are we expecting a stronger Q4 this year?

My second question is, regarding Ibuprofen. So, how is the demand scenario currently for the product? And are you seeing any incremental competition for the product in your target market?

And my last question is, on the gross margin side. So what has led to the gross margin improvement during the quarter? And are we confident of achieving 50% gross margin by Q4, as guided earlier? So these are my three questions. Thank you.

Jitesh Devendra — Managing Director

Yeah, thank you. So from a revenue point of view, we are confident that we will be able to maintain our INR400 crores run rate. Our overall business as I mentioned in our previous calls, we have reset the business at Solara and we are very confident to get back to our historical revenues, as well as to gross margins. So revenue, yes.

On the gross margins, yes, that’s our aim in terms of getting closer to the 50%, getting to our historical run rate. There are a lot of actions which have been put in place for which we will see the results just not in the Q4, but in the next financial year as well. We have looked at various markets in terms for our existing products by increasing our market share, which I’ve mentioned, but we have done market extensions. We are the probably the only company outside of China who has got the Ibuprofen approval in — for China market.

And coming to the demand for Ibuprofen, yes, the demand has come back for Ibuprofen. And as I said, probably we are the largest manufacturers of Ibuprofen for the regulated market. And it’s just not Ibuprofen, we have various forms of Ibuprofen, the value-added Ibuprofen, which we are focusing on which will lead to expansions in the gross margin.

Unidentified Participant — — Analyst

Okay. Thank you.

Abhishek Singhal — Investor Relations Consultant

Deepak [Phonetic], can we take the next question, please?

Operator

Yes. [Operator Instructions]. Our next question is from the line of Mahek Talati with YellowJersey Investment Advisors. Please go ahead.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Yeah, hi. Thank you for the opportunity. Sir, I had a few questions. First is, our other expenses have gone up on quarter-on-quarter and Y-on-Y basis. So what has led to this jump? And are there any one-off during the quarter?

S. Hariharan — Executive Director and Chief Financial Officer

This is in line with — there has been a steep increase in the power charges across the channel — various places of what we manufacture, and also due to the normal increase in the inflation has resulted in increase in the other expenses. There is no one-time activity charge-off during the current year.

Mahek Talati — YellowJersey Investment Advisors — Analyst

So these other expenses are going to continue next few quarters as well?

S. Hariharan — Executive Director and Chief Financial Officer

Yeah, yeah. Because, the power outage and the power charges, given the fee of [Phonetic] the currents, which are the major source models to power, there has been a steep increase in the power charges. And also the solvent and other consumables due to current international situation that has been increased in the price.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Okay.

S. Hariharan — Executive Director and Chief Financial Officer

Which is getting — I think, within one or two quarters, it will get regularized.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Okay. Sir, next question is regarding the CapEx. So what was the CapEx done during the nine months FY ’23, and any major CapEx plans going forward for next two years?

S. Hariharan — Executive Director and Chief Financial Officer

No. We only did the normal maintenance CapEx during the current year, and we have pre-planning [Phonetic] the capacities at our new site in Vizag to allow these unfinished agendas of impact of integration projects to complete. And we have not yet formed these long-term capital expenditure plan. Based on the Board approval, we’ll be planning it during the — next call, we’ll be able to explain you our growth strategy along with the CapEx details for the new projects.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Okay, fair enough. Sir, there was one question regarding the Vizag plant. So we have started commercial surprise to less-regulated markets. So was there any specific reason that we have not done this before in previous quarters and that — let’s say, two quarters back, and in this quarter we have started?

Jitesh Devendra — Managing Director

Yeah. So I can answer for this financial year. So, when we were back in Solara, we have taken all the actions in terms of ensuring certain products which we are manufacturing at other sites to be qualified in Vizag, and all those actions have been taken in place. And once we were confident taking the validation batches, we had gone out to seek orders from the less-regulated markets.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Okay.

Jitesh Devendra — Managing Director

So all these actions for the sales which happened in Q3, the actions have been taken and initiated in Q1 itself.

Operator

Thank you. [Operator Instructions]. Our next question is from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

Thanks, and congrats on a good set of numbers. Sir, just I would like to understand the contribution by Ibuprofen for the quarter, broadly?

Jitesh Devendra — Managing Director

No, we don’t give contributions of our products on a revenue breakup basis.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

So at least, if you could share me what are the growth that has come both year-on-year or even on a quarter-on-quarter basis any certain product-specific growth or is it more broad ways growth?

Jitesh Devendra — Managing Director

We are seeing growth in most of our creditable products, key products. We have seen growth on a quarter-by-quarter basis, and that’s reflected in the revenue expansion as well.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

Thank you. And in Vizag, is this the full-quarter impact, so to say, for 3Q in terms of revenue?

Jitesh Devendra — Managing Director

I’m sorry, I didn’t understand your question. If you can repeat that again, please?

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

At Vizag, the INR7 crore sales, is it like we had the entire quarter for the sales or it’s just part of the quarter?

Jitesh Devendra — Managing Director

So again for Vizag, that’s only starting off the sales, right, and we are looking at increasing the sales even in Q4.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

So, like what kind of run rate should we kind of think about Vizag at least for the next 12 to 18 months?

Jitesh Devendra — Managing Director

We’ll have a better answer in the next investor call as we are firming up the plans, just not for the Q4 but even for the next financial year.

S. Hariharan — Executive Director and Chief Financial Officer

And as you know, Tushar, that we’ve got the CEP approval of Ibuprofen from Vizag, so we are having a site EUV [Phonetic] inspection in this quarter. So that, that will further enhance that we can supply Ibuprofen from Vizag site. So that’s the upside we are anticipating.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

Got it. And just lastly, if you could help us understand more on the year-on-year basis, or at least quarter-on-quarter basis, how has been the pricing for most of the products on a blended basis? And/or how has been the volume growth?

S. Hariharan — Executive Director and Chief Financial Officer

It’s stable.

Jitesh Devendra — Managing Director

Yeah, it’s stable. I mean, we find it to be stable from a pricing point of view. And yes, volume growth, we are expecting it to happen for our critical products where we have done market extensions.

Tushar Manudhane — Motilal Oswal Financial Service Ltd. — Analyst

Okay, sir. Well done. Thank you.

Operator

Thank you. [Operator Instructions]. Our next question is from the line of Nitin Agarwal with DAM Capital Advisors. Please go ahead.

Nitin Agarwal — DAM Capital Advisors — Analyst

Hi, thanks for taking my question. Actually, on the — on our gross margins, so in the past, when you’re doing about INR400 crores gross margin FY ’21, we’d rather INR400 crores of quarterly revenues you are doing gross margins about 56%, 57%. Now in these sort of new dynamics as a businesses today, I mean, where do you see our optimal gross margins could be for the business over the next few quarters?

Jitesh Devendra — Managing Director

So, we are working in terms of the gross margin expansion. Yeah, when you compare it to the FY ’21 results, we were at the gross margins of 56%. Our aim is to get to that. As I said, we will get back to you on the guidance in the next investor call.

Nitin Agarwal — DAM Capital Advisors — Analyst

Which is fair. I’m saying, but in terms of aspirationally rather given where the landscape has changed.

Jitesh Devendra — Managing Director

Yeah. Our aspiration, of course, is to get to the 50%. It’s only about the timing as we firm up the business plan and when do our CIPs also come into play. So we will have a better answer. But yes, the aspiration is to be at minimum 50%.

Nitin Agarwal — DAM Capital Advisors — Analyst

Okay. And secondly, on the debt part of it, we’re still about north of INR900 crores of net debt. Lot of it essentially is in working capital. Now, how are we looking at reduction of this net debt number, going forward?

S. Hariharan — Executive Director and Chief Financial Officer

See, in the term loan, you would have seen that INR472 crores [Phonetic] beginning of the year and now it’s done INR352 crores. So INR120 crores will be the reduction in the term loan every year. And working capital, there is has been a slight increase due to the support — the increase in the sales during the quarter three and quarter four. And once that business operation improves, and as soon as we’ll reduce our debt levels, and we get to a comfortable level of plans.

Nitin Agarwal — DAM Capital Advisors — Analyst

Sir, what is the debt level that you’re comfortable with, that you’re sort of eyeing your target on that account?

Jitesh Devendra — Managing Director

Yeah. First, we want to reach nearly three times of EBITDA. That’s our plan in the next financial year.

Nitin Agarwal — DAM Capital Advisors — Analyst

Okay. Okay. Thank you.

Operator

[Operator Instructions]. Our next question is from the line of Mahesh Vyas with UTI Mutual Fund. Please go ahead, sir.

Mahesh Vyas — UTI Mutual Fund — Analyst

Hello. Am I audible?

Jitesh Devendra — Managing Director

Yes, you’re audible. But, there is a lot of background noise. Yeah.

Mahesh Vyas — UTI Mutual Fund — Analyst

Sir, what is the capacity we have for — specifically for Ibuprofen, and what’s the utilization we are having from them?

Jitesh Devendra — Managing Director

If I understood your question right, you asked what is the utilization of Ibuprofen capacity?

Mahesh Vyas — UTI Mutual Fund — Analyst

And what is the annual capacity we have for Ibuprofen?

Jitesh Devendra — Managing Director

As I said, we don’t say about the annual capacity budgets. Our utilization of Ibuprofen is getting to — closer to 90%.

S. Hariharan — Executive Director and Chief Financial Officer

Pondi.

Jitesh Devendra — Managing Director

In Pondi facility.

Mahesh Vyas — UTI Mutual Fund — Analyst

Okay. Okay. And capacity you don’t share. Okay, fine.

Hello?

Jitesh Devendra — Managing Director

Yes.

Mahesh Vyas — UTI Mutual Fund — Analyst

Do you share the capacity, sir? I just missed out your first sentence.

S. Hariharan — Executive Director and Chief Financial Officer

There is a huge noise coming — background noise.

Jitesh Devendra — Managing Director

No, we don’t share capacities of our key products.

Mahesh Vyas — UTI Mutual Fund — Analyst

Okay. Okay, okay. Sure, sure. Thanks then.

Operator

[Operator Instructions]. Our next question is from the line of Gagan Thareja with ASK Investment Managers. Please go ahead.

Gagan Thareja — ASK Investment Managers — Analyst

Yeah, good afternoon. Am I audible?

Jitesh Devendra — Managing Director

Yes, you are. Thank you.

Gagan Thareja — ASK Investment Managers — Analyst

Yeah. Sir, the first question is regarding the Ibuprofen inventories. I think the whole of last 12 months or more has been a phase where there was excess stock of Ibuprofen in the channels across regulated and non-regulated markets, which had an impact on both what you could sell to your partners and at the same time what price could be realized. How do these two things stack up now versus maybe a year ago?

Jitesh Devendra — Managing Director

So our business across just not Ibuprofen, but across our products, it’s much stronger compared to the last financial year. Most of our businesses are direct businesses. There are no one-time sales to any channel partners. And especially coming to your question on the inventory of Ibuprofen. Whatever was returned has been — it was of good quality, and those same have been sold as the demand has come back. So we are not sitting on any idle inventories of Ibuprofen.

Gagan Thareja — ASK Investment Managers — Analyst

And have the prices of key starting materials or intermediates come down, I mean, at least qualitatively, that’s the feedback we get from quite a few of the chemical companies. And if that is the case, and prices — output prices of firm, is there any reason to then believe that spreads or margins of Ibuprofen could actually keep on improving, given the current market situation?

Jitesh Devendra — Managing Director

As per our regular trend, there has been no substantial increase or decrease in any of the raw material prices.

S. Hariharan — Executive Director and Chief Financial Officer

Actually, the petroleum products, derivative product prices have not come down. And also the metal prices have not come down in the international markets in the current international situation. We expect that by — within two quarters, we expect a normalization of this petroleum product prices.

Gagan Thareja — ASK Investment Managers — Analyst

Okay. And you indicated — you don’t give [Phonetic] capacity utilization. Can you give overall aggregate capacity utilization for the company as a whole? And maybe split it up on Vizag and the base business?

S. Hariharan — Executive Director and Chief Financial Officer

Our overall capacity should be some 77% [Phonetic].

Gagan Thareja — ASK Investment Managers — Analyst

I’m sorry. You were not very clear. Could you repeat that number, please?

S. Hariharan — Executive Director and Chief Financial Officer

Our overall capacity is 77% across all the sites and products.

Jitesh Devendra — Managing Director

Yeah.

Gagan Thareja — ASK Investment Managers — Analyst

Okay. And on Vizag given, there is some sales resuming and you also have a pending inspection due in Q4. For the coming year, would it be reasonable to assume that that’d be hitting breakeven in the next maybe two, three quarters for you?

Jitesh Devendra — Managing Director

So, yes. We did get CEP approval for our Ibuprofen. We are awaiting the US FDA inspection. And the goal is, as we are filing new products which I’ve already mentioned that our two new products we have filed, we have filed one in Vizag. So the focus is to make Vizag breakeven, and we have clearly laid out the plans for Vizag, which overall it has a big role to play in the growth of Solara.

Gagan Thareja — ASK Investment Managers — Analyst

I mean, and to the perspective I’m coming from is that this quarter, you hit base business EBITDA run rate of around 17%, and you managed to reduce your under-recoveries on Vizag. If you can maintain base business EBITDA run rate and maybe improve somewhat as you enter the next year, and as the Vizag under-recoveries sort of reduce, keep on reducing, would it be fair to assume that you would be in a position to hit high-teens to double-digit by the exit of next year or maybe earlier?

Jitesh Devendra — Managing Director

Overall, from the company, taking into account even for the Vizag and after the R&D costs from mid-to-high teens is what we are targeting.

Gagan Thareja — ASK Investment Managers — Analyst

Okay, all right. And your thoughts and your commentary on the CRAMS piece and the new product, please? And one final question on how should we think of tax rates going ahead?

S. Hariharan — Executive Director and Chief Financial Officer

Tax rate, you know, we have — it can be — we are in the higher [Technical Issues] but it will be around 20%, 22% will be the net debt to effective tax rate.

Gagan Thareja — ASK Investment Managers — Analyst

Okay. For FY ’24, should we pencil in 22? 20% to 22%, is what you’re saying?

S. Hariharan — Executive Director and Chief Financial Officer

Yes. Yes, yes.

Gagan Thareja — ASK Investment Managers — Analyst

Okay. And your outlook on the CRAMS business and new products introduction?

Jitesh Devendra — Managing Director

Yes. So our outlook on the new products, as I said, this year we are going to file six. Four are planned during this quarter. We already have a pipeline of eight products for the next financial year. This is a very important piece for our growth business as well as it helps in the under-recovery of the R&D. R&D is really an investment for us for new products and CRAMS.

Coming to the CRAMS business, we are seeing a good traction in the CRAMS business, even though today it is at single-digit of the overall company’s revenue, but this business is the focus in terms of the growth. We are hiring people in terms of expanding our market reach. We have already done that in the US, we — have — and we are going to add some new capabilities that would be differentiated. We are just firming up our CapEx plan for the next financial year, which would have a big driver for the CRAMS business.

Gagan Thareja — ASK Investment Managers — Analyst

And then, you’re almost hitting 77% utilization. I would presume, it could be 80%, 85%, and then you’ll need to add capacities, which means by the time you’re in the middle of next year or so, you will be looking to invest in additional capacities. Any thoughts on the investments that would be required that you can share, going ahead?

Jitesh Devendra — Managing Director

Yeah, close. So I just want to reiterate, without Vizag, its capacity utilization is 77%. So we have base business also growing. And with Vizag, we have capacities in terms of catering to our demand. And I meant, CapEx in terms of — for the CRAMS in terms of the differentiated technology that would be initially more from an R&D perspective.

That it’s not going to be a huge CapEx. But definitely, if we are going to win some RFPs on the R&D side, then there would be a possibility to expand that on the commercial side. But we are going to be very cognizant in terms of how we are going to invest in the CapEx for the future growth of Solara.

Gagan Thareja — ASK Investment Managers — Analyst

And what could be the peak sales potential from the Vizag site?

Abhishek Singhal — Investor Relations Consultant

Hello. Can you repeat the question?

Gagan Thareja — ASK Investment Managers — Analyst

What could possibly be the peak sales potential of the Vizag plant at full utilization?

Jitesh Devendra — Managing Director

So with the investments what we have made right now, at the peak sales, if it plays out to our plan, Vizag revenue could generate at least about INR300 crores to INR400 crores.

Gagan Thareja — ASK Investment Managers — Analyst

Okay. Thanks, sir. I’ll get back in the queue for now. Thank you.

Operator

Thank you. [Operator Instructions]. Our next question is from the line of Pooja Rathi with YellowJersey Investment Advisors. Please go ahead.

Pooja Rathi — YellowJersey Investment Advisors — Analyst

Thank you for the opportunity. So I wanted to ask, could you give an outlook on revenue and EBITDA margin for coming two to three years?

Jitesh Devendra — Managing Director

As I said, we are just forming up our plans, we’ll have a better guidance in the next investor call.

Pooja Rathi — YellowJersey Investment Advisors — Analyst

Okay, thank you.

Operator

Thank you. [Operator Instructions]. Our next question is from the line of Jenish Shah [Phonetic], Investor. Please go ahead.

Unidentified Participant — — Analyst

Hello. Good evening, sir. Just wanted to get some understanding about the business structure. I mean you have, I think, close to 60 plus kind of products, which are already there in the portfolio. And in terms of markets, 72% of the market — of the revenue coming from the regulated one, and you aspire to add more. So I’m just trying to understand from a concentration perspective, in terms of the product in the market concentration, how does it stack up? And we hear from you that your focus markets will be more like Latin America or China. Then we just need to understand like how does the business is being aligned for future? Can you just give that one, I mean some understanding of that?

And second question is also if we can give a broader outlook, or maybe an update on how the global market have been in the shape, as we hear more from challenges like European countries already facing in terms of manufacturing. And even given the growth slowdown, which has been expected across various economies in such environment — like what’s your assessment in that?

Jitesh Devendra — Managing Director

See, from a business point of view, the way we are looking at from the current products, we do have certain products which are right now filed only in one market, and there are potentials for other markets as well. Hence the reason why we are doing market extensions of some of these products to increase our market share. As we want to derisk — so the way we look at it is we want to derisk our product portfolio, the dependence on products as well as dependence on market.

And when you look at the overall Solara revenue, I think we are well placed from a global perspective, where we have good presence in North America, Europe, and Asia-Pacific regions, which is more driven by Japan and South Korea. The territories where we have a marginal presence, but the opportunity is large, and that’s where we are looking at focusing on Brazil and China. Of course, there are other markets also which we would like to increase our market share, just not for existing products, but for new products as well. So summarizing your question, yes, the goal is to derisk both the product portfolio as well as derisk dependence on customers, as well as on the markets.

On the second question you asked about the global slowdown, I mean, for the products, what we have in place, we have not in fact seen any slowdown at all. In fact, it’s come back in terms of the demand. So I don’t have any specific or more answer to that question, but I can say that, yes, we are very upbeat in terms of how the business is progressing for Solara.

Unidentified Participant — — Analyst

Okay. So — okay. And in terms of the debt, you said you’ll be repaying INR150 crores of term loans every year, right? That’s what — is the correct, which I’ve taken?

S. Hariharan — Executive Director and Chief Financial Officer

Yeah, INR120 crores.

Unidentified Participant — — Analyst

Okay, okay. Thank you. Thank you very much.

Operator

Thank you. Our last question is from the line of Mahek Talati with YellowJersey Investment Advisors. Please go ahead.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Yeah. Hi. Thank you for the follow-up. Just one question. When are we expecting the US FDA approve for our Vizag facility?

Jitesh Devendra — Managing Director

We are also keenly waiting for the outcome.

Mahek Talati — YellowJersey Investment Advisors — Analyst

Okay. Got it. Thank you.

Operator

Thank you. As there are no further questions, I would like to hand the conference over to the management for closing comments.

Jitesh Devendra — Managing Director

Thank you everyone for taking your time to join us for this investor call. We look forward to our Q4 call and the year as a whole in the coming months. Thank you once again.

Operator

[Operator Closing Remarks]