Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Solara Active Pharma Sciences Limited (NSE: SOLARA) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Abhishek Singhal — Investor Relations Consultant
Sandeep Rao — Managing Director and Chief Executive Officer
Sarat Kumar — Chief Financial Officer
Analysts:
Sajal Kapoor — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and Gentlemen, good day and welcome to Solara Active Pharma Sciences Limited Q4FY26 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 then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Abhishek.
Thank you. And over to you Abhishek.
Abhishek Singhal — Investor Relations Consultant
Thank you nju Good afternoon and thank you all for joining us today for Solara Earnings call for the fourth quarter and financial year 2026. Today we have with us Sandeep in MD and CEO and Sharat, CFO of the company to share the highlights of the business and financials for the quarter and 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 note that today’s discussion will be forward looking nature and must be viewed in addition to the risk 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 investorization team. I now hand over the call to Sandeep to make his opening comments.
Sandeep Rao — Managing Director and Chief Executive Officer
Thank you Abhishek. A very nice good afternoon to all of you joining in today’s Q4.26 earnings call. I sincerely appreciate your time and presence on this call. Q4. 26 has been very good for us. Our business has delivered the highest revenue, gross margins and EBITDA in the previous eight quarters. In Q4.26 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 already put on hold till such time as we can finalize the strategic options for the IBU. Growth in business in H1 27 just coming to a snapshot of our financial performance for the current quarter. Revenue has a 12% QoQ growth. We delivered 392 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.
Sarat Kumar — 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 in today’s
Sandeep Rao — Managing Director and Chief Executive Officer
Q4FY26 earnings call as shared by Sandeep. Despite facing headwinds in our ibuprofen business, the overall Solara business has recorded a strong quarterly result in Q4 of FY26 with the business recording its highest revenue gross margin as well as ebitda. In the previous eight quarters the operating cost for the quarter were flat Q on Q and hence having a superior operating leverage, Solar business has clogged an ebitda margin of 16% with an absolute EBITDA value of 61 crores plus which reflects significant growth of 65% Q on Q.
Because we had quite few subdued quarters in Q2 and Q3. 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 crores during FY26 which actually signifies close to 21% reduction in the debt during the year out of which 113 crores came off from the first call money of rights which we had in May 26th 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 26th 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 as our entire team works towards turning around this company and we are happy to take your questions if any. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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 antifragile thinking. Please go ahead.
Sajal Kapoor
Yeah. Hi, thank you for the opportunity. Hi team. Encouraging performance for sure. I have a few Questions please. So Q4 clearly showed momentum in the base business. But how much of the improvement reflects a 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?
Sandeep Rao
Hi, so let me go first. Hi Suzil.
Sajal Kapoor
Yeah.
Sandeep Rao
Firstly if you see our revenue growth, we’ve grown 12%. We’ve grown from around the base business. We have a very healthy order book and you’ve seen that in the numbers as well. So I’m very encouraged looking at this order book and the utilization across our facilities. There is a strong performance and it is not factors outside our control that are really favoring our business.
Sajal Kapoor
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 preponing purchases or a favorable product mix that may not repeat.
Sandeep Rao
No, no, no such. 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 item business. I think our base business is what’s driving the momentum is what’s keeping the tailwinds on. So okay, again coming back to your question, there’s no one off here.
Sajal Kapoor
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, that is the operating leverage without introducing fixed cost because the nature of the business is nonlinear.
Right.
Sandeep Rao
So the story here is very clear. We want to keep our OPEX base minimal and we have to increase year on year. But on the same OPEX base 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 become some debottlenecking projects.
This is not big capex. These are not greenfield or downfield. They’re just improving cycle times on the line and so on. And those have also started showing. 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.
Sajal Kapoor
No, that’s helpful Sandeep. 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 wallet, 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.
Sandeep Rao
So very, very good question. I think you are right. A lot of our time and attention was taken by the Ipofen 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.
Sajal Kapoor
That’s helpful. That’s all from my side. Sandeep, wish you all the very best. Thank you,
Sandeep Rao
Thank you,
Operator
Thank you. Next question comes from the line of Pranav Chawla with Ambit. Please go ahead.
Sarat Kumar
Congratulations sir, on the 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.
Sandeep Rao
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, we see from our numbers that the ebitda, it’s eaten out of our existing ebitda. Right. But I believe we’ll be in a better position to put out the conclusion on us on this, on the strategic piece in H1 of this financial year. You have to give us some more time.
Sarat Kumar
Got it. So, and one more thing. We’ve also seen improvement in realizations in ibuprofen globally in this quarter. Any particular reason why that is not clearly reflecting into our numbers? Have we wound down certain parts of the size of business?
Sandeep Rao
So by the time this particular war had started, all this pricing upticks what you’re talking about, which is slightly tactical currently due to the ongoing crisis. So 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 didn’t have that 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 the time we actually don’t have the entire order book.
Sarat Kumar
Got it, sir. And one last question on this ibuprofen business. How backward integrated are we in ibuprofen?
Sandeep Rao
Backward
Sarat Kumar
Integrated or we procure input materials from outside.
Sandeep Rao
Our starting material is ibap. So we are absolutely not backward indicator by any means. So we don’t manufacture the ibad. We source the IBAC from third person.
Sarat Kumar
Got it? Got it. Perfect. Thank you so much. So that would be all from my end.
Operator
Thank you. Next question comes on the line of Ankur Padekar with antique stockbroking. Please go.
Unidentified Participant
Yeah, thank you for the opportunity. A couple of questions from my side. So in the previous earnings call the company had indicated plans to like bring the VIZAC facility facility back into commercial production within the next five to six months. So could you provide an update on the Progress against the timeline and like are we on track for commissioning as planned?
Sandeep Rao
So Ankur as compared to Vizag plant commissioning has been actually done long back in 2024. But however from 2024 that site has been mothballed. So what what we had mentioned in the last earnings call as well saying that once we, 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 wiser 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.
Unidentified Participant
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?
Sandeep Rao
The primary driver of this business in the medium three year horizon if I might call it will be our base business from the existing facility. It won’t be Vizag 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.
Sarat Kumar
Okay, that’s helpful. Thank you so much.
Operator
Thank you. Next question comes from the line of Dhruv Sitlani with Everflow Partners. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir. Congratulations on the good setup. Mr. Sedlani,
Operator
Sorry for interrupting, we cannot hear you. Can you come a little closer to the mic and speak?
Unidentified Participant
Am I audible?
Operator
Yes. Can you speak a little more louder?
Unidentified Participant
Okay. Thank you for the opportunity. Congratulations on the good set of numbers in the group 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?
Sandeep Rao
So thank you for this question. So we actually don’t have a single molecule or 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 points which actually drive these margins and numbers close to 75, 80%.
Unidentified Participant
Okay, thank you. So 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.
Sandeep Rao
So this entire numbers of hundred 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 crams is something which is very subscale. For example, our annual numbers from crimes are close to just 1012 odd crores. And we don’t have that kind of a stronger pipeline to give you those kind those kind of projections on this.
Unidentified Participant
Another question I have is that in our base business what sort of steady state EBITDA margins we expect achieve in like next two, three years down the line.
Sandeep Rao
We have been maintaining that we will be close to in the range of 25% plus minus here and there. And this is something 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.
Unidentified Participant
Okay, sir, thank you so much. Last question I had in product. Other than how much market share do we have in India or globally and would we be among the leading players or not?
Sandeep Rao
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 that market share. But then apart from this, most of the other products are something which are pure Play catalog generics. So we don’t have that kind of a market share tracking for all those products.
Unidentified Participant
Okay, sir, thank you for your time. That was all from my side.
Sandeep Rao
Thank you.
Operator
Thank you. Next question comes from the line of Prolin Nandu with Edelweiss Public alternatives. Please go ahead.
Unidentified Participant
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?
Sandeep Rao
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’s 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 kind of options at this point it’s too early for me to sort of pin 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 reach out and we let people know on what route we have selected.
Unidentified Participant
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?
Sandeep Rao
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 what the bankers come in sailing. 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 that business is something we’ve done 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.
Unidentified Participant
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 ibuprofen business from a customer from a relationship point of view which also will go into the consideration of what we do for our IBU business.
Sandeep Rao
Let me take your second question first because that’s an easier question. What are the repo questions? 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 compare, communicate it accordingly and make sure customers have enough time to change over to an alternate source. 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 did not see it impacting non aggregation 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 mean, look, I mean we are talking about we are not backward integrated. Point number one, we don’t manufacture the ibap. Secondly, we also don’t have access to new technologies that some of our competitors have. So I think if there’s somebody out there who would, who would have the intent to invest in a new process, who would have the intent to backward integrate on this manufacturing, I suppose still make a very compelling case for that.
For that.
Unidentified Participant
No. Sandeep, that was very helpful. Thanks a lot and all the very best.
Sandeep Rao
Thank you.
Operator
Thank you. Next question comes from the line of Harshit Khadga with Robo Capital. Please go by.
Unidentified Participant
Hello. Am I audible?
Operator
Yes, you are.
Unidentified Participant
Yes sir. Thank you for the opportunity. Very good. It’s good to see, you know, 15 percent EBITDA margins in Q4. 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 outlook?
Sandeep Rao
No, no, we will not give any outlook at this point. I 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 doing better quarter over quarter.
Unidentified Participant
Okay, thank you. Good luck.
Sandeep Rao
Thank you.
Operator
Thank you. Next question comes from the line of Amlan Chakraborty, AK Investing Company. Please go ahead.
Sarat Kumar
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?
Sandeep Rao
So Amna, thank you for this particular question. So R and 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 and D engine has not been able to come up with at least one new filing in the last four years as well. So although we have spent our efforts on R and 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 and D.
And now we have entirely revived that R D engine with exactly commercially focused products, pipeline for filing, etc. So this is something which has started in just late of FY26 and will be mostly in play from FY27 onwards. But the fruits of which will Be only reflecting through FY29 or FY30 onwards. Because once we start filing our products, by the time it’s actually commercialized, there’s a sufficient timeline of two to three years in between.
Sarat Kumar
I have one follow up question also on this. Am I audible?
Sandeep Rao
Yes.
Sarat Kumar
Previously, since you said that we did not invest Solara did not invest much of an R and D. So. But we had seen an uptick in the number of DMFs which were being filed. So can we extend 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.
Sandeep Rao
So we have a plan to do four to five DMS filings every year to start. As Sarat 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 4 to 5 this year, 4 to 5 next year and so on. But all this will start seeing impactful revenues and margins coming in around the FY29, FY30 time frame.
Sarat Kumar
Thank you so much sir for your question, for your efforts. Thank you.
Sandeep Rao
Thank you.
Operator
Thank you. Next question comes from the line of Pragnesh Padia, Exylum Investments. Please go ahead. Mr. Padia, please go ahead with the question. Mr. Padia, please unmute yourself and go ahead with the question.
Abhishek Singhal
We can go to the next question. Since
Operator
There is no reply from the line of Mr. Pardia. We’ll move to the next question. That is from the line of Dheeraj Kumar Reddy with Alpha Square. Please go by.
Sarat Kumar
Sir, thanks for the opportunity. I just wanted to understand how is the company thinking in the grams division. What are the areas of therapies which the company is working on and how should one think about? Because given that we are, 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 cramps business? What kind of modalities therapies the company would be working on?
Sandeep Rao
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 crams business has been subscale for us and Sarah even gave you some numbers around it. So I think what we are going to focus is we are going to Focus on catalog generics. We are going to focus on polymer APIs. We are also going to on focus focus on certain select intermediates. But that’s going to be what’s going to drive the growth in FY27, 28 and 29. We are currently not factoring a lot of crams driving that growth.
Crams 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 crams.
Sarat Kumar
Got it. And in the base business, how do you see the growth going forward? I mean what will drive this growth?
Sandeep Rao
I think two things will matter here. One is can you expand that business? One is can you expand that business with the existing business? As I said, all the new filings will come beyond the three year horizon, right? So can you see new businesses with new customers? Second is going to be about how we drive operational efficiency. Can we. Can we improve the yields of our products? Can we de bottleneck our capacity for high margin products? And third is going to be how do we wisely focus on how do we 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 three or four.
Sarat Kumar
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.
Sandeep Rao
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.
Sarat Kumar
Got
Operator
It.
Sarat Kumar
Thanks a
Operator
Lot. That’s helpful for
Sandeep Rao
That.
Operator
Thank you. Next question comes from the line of ca, Shilpa Sabu individual master. Please go ahead.
Unidentified Participant
Hello. Thank you for taking my question and congratulations on the big set of numbers. My first question about the Pondicherry plant is already answered. So my second question is that what are your plans on the micro facility? It is a small facility and already in a residential sort of an area. So what are your plans on that?
Sandeep Rao
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 mango. So at present we will continue using it as an intermediate site manufacturing for our products within our ecosystem.
Unidentified Participant
Okay, sir, thank you.
Operator
Thank you. Next question comes from the line of Rohit Koti with Marshmallow Capital. Please go back.
Unidentified Participant
Thank you for the opportunity. Sir, could I ask you to please repeat the Three focus areas you spoke about in the previous question.
Sandeep Rao
Sure. Three focus areas for us is one is expanding the existing business which is seeding new customers for our existing products. Second is driving operational efficiency, driving that through capacity debottlenecking, yield improvement, cost improvement. And the third is going to be about wisely managing our financing.
Unidentified Participant
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?
Sandeep Rao
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.
Unidentified Participant
Understood. So do you see the debt? I mean so it’s been a phenomenal work. I think from the peak debt of more than thousand crores we have used both the rights money and the cash flows generated to pay down 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, that quality and the growth plan that we have, how much debt do you think would be required? I would assume that it should be a debt free company given the quality of that business.
What we have shown in the presentation of the last 2 3/4 but wanted to hear your views on that.
Sandeep Rao
We also concur with kind of similar views. So we have an internal target of making Solara debt free by FY29.
Unidentified Participant
Understood. So this is debt free. I, I’m guessing you’re talking not just about long term debt free, you’re talking about working capital debt free as well, right?
Sandeep Rao
Yes, yes,
Unidentified Participant
Understood. And so, so I have been invested in the company for the last two odd years or three years and personally I’ve been very excited by the team that has been that is in place right now. I mean from whatever I’ve what I have seen team online, everybody from the CEO to Sharad, CFO 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 will be nice to hear not a 12 year view but let’s say three to five year. We have broadly three legs, 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 debt free part was super helpful to Hear but anything else like capacity expansion in the three pivots you talked about. You about talked, talked about more customers for existing products but you didn’t talk about new products.
Could you speak about a long term strategic vision for the company that you or the team has?
Sandeep Rao
So let me take. There are a lot of questions in this one question. Firstly, thanks a 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 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, Sarath and I joined this company in February last year. We followed up with hiring a very very experienced chief commercial officer 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 want 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 OPEX 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.
Unidentified Participant
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 idea. And when you speak about the 30% extra capacity available I assume it is in the ex hybroprofen facilities, is that right? Yes,
Sandeep Rao
That is right. That is right. Because IBU broken as a dedicated facility anyways we can’t do much. I would share.
Unidentified Participant
Understood. And in terms of the areas you focus, I mean 30% sounds nice today but over a three to five year horizon I’m guessing it will fall short of the aspirations we have. So do we have space in the existing non existing facilities in the base business to expand capacity? Brownfield expansion if required.
Sandeep Rao
So what we are doing is while we are not putting big capex, we are putting incremental capex. Right, Incremental capex and trying to debottle certain lines which run high margin products. But we are falling short of incremental capacity. So we’re keeping 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 debottle 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 and D which as I said, we intend to file four, five new EMFs every year starting this year and those products start seeing the light of the day in the FY 29, 30, 31 time frame. So we have a five year horizon. We should see a growth momentum coming from new R and D products as.
Operator
Thank you Mr. Koti. Please rejoin the queue for more questions. Next question comes from the line of Jaspreet Singh, an individual master. Please go ahead.
Sarat Kumar
Hello. Am I audible?
Sandeep Rao
Yes.
Sarat Kumar
So I wanted to ask what has been done in last one year since you guys have come in the scene? What decisions or steps that you have given taken in last one year?
Sandeep Rao
Sorry, I didn’t get the second part of the question.
Sarat Kumar
Am I audible?
Sandeep Rao
No, I, I. You’re audible. I heard the first part of your question. Can you repeat the second part of your question?
Sarat Kumar
No, I wanted to ask what decisions and steps that have you taken last one minute or so.
Sandeep Rao
Okay. So the five things we have done in the last one year, obviously the first one was a steady the shift. 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 and D engine because we put roughly 25 crores every year in R and D and we would like to see meaningful DMS being filed.
So we intend to have 4 to 5 DMS filed. 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 capacity. So we initiated a lot of debottle making 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, between continuing our manufacturing, trying to pay off vendors as much as we can and having money available for Capex spends 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 people to be building a performance oriented organization. Does that help? Jaspreet.
Operator
Thank you Mr. Singh. Please reach out to more questions. Next question comes from the line of Ketan Archeta, an individual investor. Please come in.
Unidentified Participant
Hi. Thank you. For the opportunity team, I’d like to ask, since the Vizag facility is mothballed, so I’m assuming that we are not generating any revenue from there but at the same time is there any expenses that we are incurring on that facility and if yes, how much are those expenses?
Sandeep Rao
Yeah. So as you rightly said, this particular entire site has been mothballed since 24. However, we have certain bare minimum fixed cost expenditure for that particular site which is to the 12 to 15% annually.
Unidentified Participant
Sir, you said 12 to 15 crores
Sandeep Rao
Annually
Unidentified Participant
Annually. Okay, okay, fine. And the other question I have is with respect to the options that you’re 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 backward integration, which we are not doing right now. We are backward integrated. So my question is why wouldn’t we think of doing those things and if it would be helpful for the business, wouldn’t be prudent for us to kind of change the technology, make it backwards integrated.
Of course it will need some Capex to be done. But isn’t that profitable? Or it could be a profitable option for us.
Sandeep Rao
So ibuprofen at the end of the day is a commodity business, right? I in one bucket I have a commodity business which is ibuprofen. On the other bucket I have a base business that is giving me 23, 25% debit.
Unidentified Participant
Your voice is very muffled.
Sandeep Rao
Okay, I’ll try and speak a little louder. Can you hear me now?
Unidentified Participant
Yeah, this is better. Better. Thank you so much.
Sandeep Rao
Okay. See at the end of the day, ibuprofen is a commodity business. Right. And a business that has continued continuously generated negative EBITDA for us. It’s not today. It’s been happening for the last few quarters. So from there I say I see two businesses. I see one proposal commodity business, which requires investment and it gives me negative returns. And on the other hand, I see a base business that gives me 54, 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 energies.
Unidentified Participant
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 that will that have on our derivatives business?
Sandeep Rao
So derivatives business is something which we intend to continue and as it is, that is something which we are not looking at in strategic options at this point of time.
Unidentified Participant
What I was trying to understand is like, you know, is any part of the IBU profile that we are generating is being used captively for our derivatives business. And if yes, then after the hiding off, assume we kind of, you know, hive off in whatever manner in the future. How would we then take care of the capital supply that we were having right now?
Sandeep Rao
So two options there. Either whoever we hive it off to continuous manufacturing, the iProfing for us, or we can go to third party and buy the IP. Those are the only two meaningful options we have. But you are right, the derivative business is the better part of the IPV business.
Unidentified Participant
Okay. Okay. And the last question is the base business that we have right now, if I compare it with the 25 FY25 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?
Sandeep Rao
That’s my goal. I want to grow that business at a better rate, which I think requires a lot of management, time, attention and resources. I’d like to invest more time in that business. I think it’s going far better than the 6% growth in the gross margins.
Unidentified Participant
All right, all right, thank you. Thank you so much for clarifying my questions. Wish you all the best.
Sandeep Rao
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answers session. I now hand the conference over to the management for closing comments.
Sandeep Rao
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 Q4 performance and hopefully show quarters as good or better than this in the future. Thank you.
Operator
Thank you. On behalf of Solara, Active Pharma Sciences limited concludes this conference. Thank you for joining us. You may now disconnect your line.