Solara Active Pharma Sciences Limited (SOLARA) Q4 FY23 Earnings Concall Transcript

Solara Active Pharma Sciences Limited (NSE:SOLARA) Q4 FY23 Earnings Concall dated May. 12, 2023.

Corporate Participants:

Abhishek Singhal — Investor Relations

Jitesh Devendra — Managing Director

Poorvank Purohit — Chief Executive Officer

S. Hariharan — Chief Financial Officer

Analysts:

Tushar Manudhane — Motilal Oswal — Analyst

Unidentified Participant — — Analyst

Subrata Sarkar — Mount Intra Finance — Analyst

Utsav Jaipuria — DAM Capital — Analyst

Dhwanil Desai — Turtle Capital — Analyst

Vedant Aryan Khaitan — Konark Investments — Analyst

Ankit Gupta — Bamboo Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Solara Active Pharma Sciences Limited Q4 FY 23 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. [Operator Instructions]

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

Abhishek Singhal — Investor Relations

Thank you Lisa. 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 fourth quarter and full-year ended financial year two 2023. Today we have with us, Jitesh, Solara’s MD, Poorvank, CEO 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 the stock exchange.

The transcript for this call will be available in a week’s time on the company’s website. Please note that today’s discussion may 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 the Investor Relations team.

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

Jitesh Devendra — Managing Director

Thanks Abhishek. Good afternoon everyone. Thank you for joining the call today. I’m delighted that we concluded fiscal year FY 23 on a positive note, having accomplished many of the goals we set for ourselves at the beginning of the year. Specifically coming to the Q4 performance on revenue front — coming to the performance for FY 23 on the revenue front, we had a 5% growth year-on year, gross margins stood at 50.3%. EBITDA at INR51.5 crores. When we started the financial year, we had set four key strategic priorities, which included resetting and concentrating the base business, restoring R&D velocity, addressing under-recoveries at our newly commissioned Vizag site and expanding into new products and geographies. We are pleased to report that we’re trending positively towards a broad range of outcomes and our performance in FY 23 is indicative of the company’s efforts to rebound.

Coming to our base business. Base business has shown strong growth momentum in second-half of FY 23, when compared to the first-half. Regulated market revenues stood at 72% during Q4 23. Our base business has achieved EBITDA margins of 19% during the quarter four FY 23, one of our key achievements is securing ibuprofen DMF approval in China. We believe we are the first company outside of China to achieve this milestone. Sales have already commenced. We continue to expand our ibuprofen franchise across regulated market geographies and branded customers. Our non ibuprofen business consists of key products like settlement Sevelamer Carbonate, Praziquantel, Sapropterin, Succinylcholine Chloride and many others where we are one amongst the few regulated market players. We continue to expand our portfolio on polymer-based chemistry with the addition of three products. Secondly, on our R&D we have filed three new US DMFs in Q4 taking the total to 5 new products filed in FY 23.

We continue to expand our geographies for our existing products. In quarter four FY 23, we have done three market extensions for our three of our existing products, taking a total of 12 market extensions for 15 existing products during FY 23. The investments we have made in new products since inception of Solara is yielding us the results. New product revenues contributed 14% of the total sales. We continue to invest in R&D for strengthening our generic API portfolio and plans to meet the growing demands for our existing products as part of increasing market-share through market extensions, addressing regulatory requirements for new products.

Coming to Vizag. We have received US-FDA and European safety approval in FY 23 our capacity utilization at Vizag improved in Q4. We have completed one of the key backward integration program for one of our APIs. The initially supply of API is from Vizag which commenced from Q3 FY 23. We’ve got commitments from our key customers to qualify Vizag, which will enhance capacity utilization in second-half of FY 24. Out of the 5 new US DMFs filed in the last financial year, three are from Vizag.

Fourthly, our efforts on the CIP has already given the results, but the full realization of the work which we have undertaken in the last financial year will flow through from Q2 of FY 24. We expect the momentum to carry-on for the goals which we have set to bring the company back to its historical growth rates.

With this, I now hand over to Poorvank, our CEO.

Poorvank Purohit — Chief Executive Officer

Thanks Jitesh. Good afternoon everyone. I’m excited to be part of Solara’s 3.0 growth journey. The second-half of financial year 2023 has brought in more confidence in the fundamentals of the business. Our margins have risen and we are working towards building new opportunities for sustainable growth. These improved financial results are a testament to the hard work and dedication of our employees and the strength of our product portfolio. Moving forward, we’ve continued to focus on outcomes that deliver value to all our stakeholders. I would like to talk primarily on our focus areas for growth for future. Number-one, we will be very strong, we’ll see a strong growth in the base business and new products by foraying into new geographies.

Secondly, we will have new capability addition, third we are talking about CRAMS big-time in terms of business growth through low molecular weight peptides and material sciences. Fourth, as the Jitesh already mentioned, we are talking about enhanced capacity utilization at Vizag and last but not least, we will continue to focus on cost improvement programs and backward integration.

With this, I now hand over to Hari, our Executive Director and CFO to take us through the financials for Q4 financial year 2023.

S. Hariharan — Chief Financial Officer

Thanks gentlemen. We have announce are FY23 financial results and key results are as follows. The revenue for FY23 is at INR1466 crores growth of 14% year-on year while gross margin stood at 46% and operating EBITDA INR226.8 crores with a 15.5% margin and our reported EBITDA at INR150.7 crores, growth of 63% over the last year. As Jitesh and Poorvank rightly pointed out that our [Indecipherable] already started giving results and is very visible from our FY 23 performance.

The corrective actions have resulted in many positive outcomes during FY23 that reduced under-recovery at Vizag, regulatory approvals for Vizag site, reduction in the net current asset, reduction in the gross debt level and improved financial ratios. Our net current assets have reduced by INR65 crores in FY23, primarily due to the reduction in the inventory, GST and our gross debt has been reduced by INR23 crores in FY23. We are working to achieve that comfortable net-debt to EBITDA ratio in the coming years, and our primary focus is improving the cash flows to — by prudent application of capital. We continue to remain focused on the actions to improve profitability and very confident about growth prospect for Solara.

Thank you.

Abhishek Singhal — Investor Relations

We can take the questions now.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Tushar Manudhane from Motilal Oswal Financial Services, please go-ahead.

Tushar Manudhane — Motilal Oswal — Analyst

Yeah, thanks for the opportunity. Sir, just on gross margins firstly, is this to do with better realization or with the lower raw-material cost? If you could explain that.

Jitesh Devendra — Managing Director

It’s a combination of the product mix and the CIP program. From a raw-material sourcing point-of-view, it’s more or less been the same over the quarters.

Tushar Manudhane — Motilal Oswal — Analyst

We’ve not witnessed — so just for more clarification, so we have not — in the past witnessed steep rise in raw material prices and so subsequently now we are not seeing the slowdown, more or less we are stable in terms of the raw material price, people, is that the way to understand?

Jitesh Devendra — Managing Director

Yes Tushar.

Tushar Manudhane — Motilal Oswal — Analyst

Okay, that helps. But unlike other API companies at least the ones, there has been a good amount and off-take in 4Q in particular. So, has there been any let’s say sort of a rebuilding in terms of the inventory — normalized inventory in the channel sort of thing or it’s more a steady-state for your products.

S. Hariharan — Chief Financial Officer

Inventory level, depending upon the product growth, inventory level — we have considerably reduced the total inventory compared to the last one year and we expect that there is procurement plan and production plan has been normalized so that we don’t just in time concept we have introduced and we don’t — we like to reduce our inventory level and working capital in a phased manner.

Tushar Manudhane — Motilal Oswal — Analyst

Understood. And just secondly, sequentially we have seen some dip in sales and subsequently how to look for FY 24 if any quantitative guidance, you would like to give in terms of revenue as well as margins?

Jitesh Devendra — Managing Director

So, we won’t want to say right now, but the focus is in terms of, as I have been always saying, in all the previous calls that we want to bring back the company to its historical levels. So, year as a whole for FY 24 there will be improvement in sales as well as in terms of the EBITDA. But I think at some points we’ll be happy to communicate in terms of the growth plans, what we have.

Tushar Manudhane — Motilal Oswal — Analyst

Okay sir, that’s it from me. Thank you.

Operator

Thank you. The next question is from the line of Dhruv Maheshwari [Phonetic] an Individual Investor. Please go-ahead.

Unidentified Participant — — Analyst

Hi, thank you for the opportunity. My first question is, good to see reduction in under-recoveries on the Vizag plant. By when are we expecting this plant to breakeven and what is the targeted capacity utilization for the plant over the next 12 months?

S. Hariharan — Chief Financial Officer

Just Jitesh in the call he has indicated we have the USFDA approval and new approval for the facility and we are in the process of qualifying and many customers to take the product from our site. From H2 onwards the substantial improvement in capacity utilization of Vizag plant and during — Q4. And in FY 24, the capacity utilization should be more than 60% in Vizag.

Unidentified Participant — — Analyst

Got it, my next question is, can you give us an outlook for the revenue growth and the EBITDA margin over the medium-term?

Jitesh Devendra — Managing Director

So, this goes back to the previous question what Tushar has asked right. The year as a whole for FY 24, you will see a growth in terms of revenue and the EBITDA. In terms of the guidance what I can definitely tell you is we are very upbeat in terms of Solara returning it to its historical levels and you will see this from the second-half of this financial year.

S. Hariharan — Chief Financial Officer

Just to add, Jitesh mentioned in the current year FY 23, there has been a substantial improvement in our EBITDA and we’ve grown our EBITDA up by nearly 63% and revenue growth by 14%, so this gives an indication that what corrective actions has resulted in FY23 improved performance. We are tracking the same line for FY 24 and we can see that good positive results in FY 24.

Unidentified Participant — — Analyst

Thank you. That’s all.

Operator

Thank you. [Operator Instructions] The next question is from the line of Vidhan Chaudhary, an individual investor. Please go ahead.

Unidentified Participant — — Analyst

Yes, thanks for giving me this opportunity Sir, my first question is, we are seeing consistent sequential improvement in gross margin over the last four quarters. So, is this number of 50% margin, a sustainable number going forward?

Jitesh Devendra — Managing Director

For the year as a whole, yes. But quarter-on-quarter there will be plus and minus but the year as a whole yes and because of the various product mix as well as some of the products where the supply happens during the second-half.

Unidentified Participant — — Analyst

Got it. Another question. We are seeing that our working capital has decreased 25 days in last financial year that is FY23. So in your opinion how much further can we reduce this in the next financial year?

S. Hariharan — Chief Financial Officer

I think our number of days is 200 days plus and it will come down to 150 days by FY24.

Unidentified Participant — — Analyst

Okay sir, thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Subrata Sarkar from Mount Intra Finance, please go-ahead.

Subrata Sarkar — Mount Intra Finance — Analyst

Hello. Sir, two-three questions, first on the capex, if you can give some guidance on the capex side, like for next year and for next two years. How much capex we are planning to do or most of the capex is done, number one? Second, for our Vizag facility, like what is our peak revenue, which we can achieve and like what kind of capacity utilization we are expecting for next year and generally how much time we are expecting for ramping-up of the Vizag facility is the initial question.

Jitesh Devendra — Managing Director

From a capex point-of-view, we will have our maintenance capex and then there is a growth capex. Growth capex is concerned, we have made all those investments and we are only focusing in terms of better capacity utilization in Vizag, but yes, there will be a maintenance capex across the plants for compliance and that could be in the range of the INR70 crores to INR80 crores total for the year.

And from a Vizag revenue perspective right, as Hari mentioned here, that once the customers take the validation batches and the capacity utilization will only increase in the second-half, we will able to then guide you what is the peak revenue we are looking at from a Vizag point-of-view. There is a lot of work is in progress right now.

Subrata Sarkar — Mount Intra Finance — Analyst

Just a back fill question, like how much we have spent total in Vizag and what kind of asset turnover generally, is optimum for this kind of a plant?

Jitesh Devendra — Managing Director

See, we are always aiming to improve the fixed assets turnover ratio, right and from a plant-wise, we don’t give any specific numbers and that includes even the investment, but you will see the revenue growth over the next years. The major revenue growth is going to be coming from Vizag.

Subrata Sarkar — Mount Intra Finance — Analyst

So we are not disclosing how much we spent on Vizag facility also?

Jitesh Devendra — Managing Director

Correct.

Subrata Sarkar — Mount Intra Finance — Analyst

Okay, no issues.

Operator

Thank you. [Operator Instructions] The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services, please go-ahead.

Tushar Manudhane — Motilal Oswal — Analyst

Sir, just one more on my side. This China approval like especially for the commercial part what will be the timeline?

Jitesh Devendra — Managing Director

Your question is related to the approval, what we got for ibuprofen in China, correct?

Tushar Manudhane — Motilal Oswal — Analyst

Correct.

Jitesh Devendra — Managing Director

We already have the approval and we have already commenced commercial supplies.

Tushar Manudhane — Motilal Oswal — Analyst

Okay. So any sort of market size, highlights for this product in China, currently?

Jitesh Devendra — Managing Director

We are also assessing the market size in China, they it’s substantial and there is not — the market, what is this type in IMS is different than what’s the actual ground reality. So we do hope that we will have a substantial market-share in China over the next few years.

Tushar Manudhane — Motilal Oswal — Analyst

And just lastly on this, the [Indecipherable] will have to participate in tender using your DNA and then that is how we’ll get the business or we already have the — since we already commercialized but just a clarification out there that, we already have a good amount of order for the coming year or it’s more like a few months on?

Jitesh Devendra — Managing Director

Yes. So, we have started getting the orders and then I said for our — it is just not one customer, at least we have a couple of customers and they are also preparing for the launch quantity. So the substantial requirement — jump-in the requirement is going to come in the next financial year.

Tushar Manudhane — Motilal Oswal — Analyst

And this is from Vizag facility?

Jitesh Devendra — Managing Director

This is from — right now from our Pondy facility, but we are also qualifying we are adding Vizag as an additional site. So that process will also be completed in this financial year.

Tushar Manudhane — Motilal Oswal — Analyst

Okay sir, thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Utsav Jaipuria from DAM Capital Advisors. Please go-ahead.

Utsav Jaipuria — DAM Capital — Analyst

Hi sir, thanks for the opportunity. Sir, my first question is regarding your pipeline, can you give some more color on the upcoming launch in FY24 FY25?

Jitesh Devendra — Managing Director

So from the pipeline perspective, one of the key actions what we are taking is the reclassification of the Cuddalore OAI and in the last couple of investor calls also I mentioned that there are 11 new approvals which are pending just from the Cuddalore side, and out of those 11 at least three are very significant in terms of both revenue as well as our EBITDA margins. And you know this — the momentum in terms of the new product filings, which we again initiated in the last year, for those we will start seeing commercial revenues in second-half of FY25. Typically we have at least three to four new product launches every year and that momentum will carry-on from FY 25.

Utsav Jaipuria — DAM Capital — Analyst

So sir, these 11 new approvals that you mentioned, so which therapeutic area would these be in and if you could give a broad color on the end-market size for these molecules?

Jitesh Devendra — Managing Director

See, what I can tell you is, when I say it’s significant, right, at least those two out of those three are polymer-based products and the market size, one of them is like a global requirement so it’s not just dependent on the US, we have initiated the efforts for Europe as well, but US market alone for –once we get the approval that could add at least $5 million just for one-product and the other one would be about another $4 million to $5 million. So these two products itself will give us $10 million in terms of new revenues coming out of our Cuddalore site. And this is one of our specialization is in the polymer-based chemistry, because what we look at is more from a therapeutic, we look at the complexity of product, whether it is in the process manufacturing or it is in the polymers.

Utsav Jaipuria — DAM Capital — Analyst

So, typically how many players would there be in these markets? In these polymer based products?

Jitesh Devendra — Managing Director

So, see in the polymer-based chemistry as a pure-play API company, right there are only two companies who have current approved DMF and selling polymer-based products and one is Solara.

Utsav Jaipuria — DAM Capital — Analyst

Okay, that’s great. Secondly, so API companies have reported very strong exports during the quarter and our growth has been relatively muted when compared to them. So, is there any reason that you could point out particularly for this?

Jitesh Devendra — Managing Director

Your question is related to our regulated market sales only being 72%.

Utsav Jaipuria — DAM Capital — Analyst

Yeah.

Jitesh Devendra — Managing Director

But historically also, when we say regulated markets right, when we classify this into North-America, Europe and then in Asia, we say, Japan, South Korea, these are some of the regulated markets and this percentage has been historically around that much, 70% to 75%. We have very small presence in semi-regulated markets and that is also very important for us because it’s not a spot business, it’s a long-term customer relationships what we’ve had.

So our regulated market business will be at 75% and once the Vizag and the Cuddalore approval comes the 75% can become 77% or 78% but it will be around that range only.

Utsav Jaipuria — DAM Capital — Analyst

Sir, so when do you expect the Cuddalore facility to be approved?

Jitesh Devendra — Managing Director

See, as per the GDUFA 3 guidelines, you could — the company can write to the USFDA for — asking for re-inspection of the facility and we have done that and we are hoping now in the recent waves, we have seen many companies who are in the warning letters — their warning letters have been cleared with the FDA inspecting, that gives us a positive outlook that we could have inspection, probably in this financial year itself. It’s not in the first-half.

Utsav Jaipuria — DAM Capital — Analyst

Okay, that’s great, thanks for taking my question.

Operator

Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go-ahead.

Dhwanil Desai — Turtle Capital — Analyst

Hi good afternoon, sir. Sir my first question is on balance sheet for FY24, how do we see the debt reduction so from INR1000 crore both short-term and long-term put together? How are we looking at from FY24.

S. Hariharan — Chief Financial Officer

So, there will be a margin reduction in the net-debt compared to the current travel and we don’t expect any substantial reduction because we are reserving the funds for the growth also. So whatever the funds we generate we’ll balance between the debt reduction and the fund allocation for the both. From INR1,000 crores we expect that there’ll be around 10% reduction in the debt level.

Jitesh Devendra — Managing Director

And of course, our net-debt to EBITDA if you compare the FY22 to FY23 it’s been a significant reduction. We were at 10% plus and now we are at 6%, and our aim is always to bring it down and you will see that the net-debt to EBITDA also will be going down in FY 24.

Dhwanil Desai — Turtle Capital — Analyst

That’s primarily because the EBITDA will go up. Sir, second question is, so you indicated from H2 onwards we will kind of strive to go back to earlier levels at which the company was operating, so are you talking more from volume perspective or absolute top-line perspective, can you throw some light on that? And also you can tie-in that with gross margin levels. I think we have always operated on 49% 50% kind of a gross margin we are already there. But, is there any scope for further improvement in gross margin compared?

Jitesh Devendra — Managing Director

For the year as a whole right we are aiming at maintaining at 50% and this and as I mentioned, we are just waiting for these new product approvals to come. I mean, just to give you a flavor, the Cuddalore reclassification happens at least we can see one of those two key products from the polymer side, we could have a good amount of sales in the second-half. And there the gross margin levels are anywhere between 55% to 55%.

So we are focusing on all these polymer products and the new products will definitely have higher gross margin but when you look at an weighted-average of the existing and the new products, it will be at about 50%. The other part is the CRAMS business of course comes with a significant higher gross margin compared to the generic API business side, we are making efforts in terms of the CRAMS. We did see a growth, but a growth of something which we are looking in terms of the significant growth in CRAMS will only come in FY25 or FY26 because we are seeding now when the commercial supplies takes some time in terms of the revenue as well as higher gross margin. But for at least for FY 24, the year as a whole, we are confident to be closer to that 50% level.

Dhwanil Desai — Turtle Capital — Analyst

Question on whether, we are looking at going back to earlier volume levels, because the reason I’m asking the question is that, of the Board because of the RM Price correction API prices have also gone down, so your realization also will not be the same.

Operator

Sorry to interrupt Mr. Desai, your audio is breaking up.

Dhwanil Desai — Turtle Capital — Analyst

Is it better?

Operator

Please repeat your question.

Dhwanil Desai — Turtle Capital — Analyst

Yes. So sir, my question is we indicated that we would want to go back to the earlier levels from second-half onwards. So, are we talking in terms of volume. because realizations year-on year, at least would have gone down because RM prices have corrected and in line with that API prices also would have corrected. So some guidance on that?

Jitesh Devendra — Managing Director

Revenue as well as the EBITDA, it’s a mixture of both. You just can’t say EBITDA is going to increase and the revenue is going to be at new point, but revenue also will increase. And our focus is only more in terms of how we realign our product mix — overall, we make a 50% gross margin.

Dhwanil Desai — Turtle Capital — Analyst

And earlier with very similar gross margin you used to make around 20% EBITDA margin so is that a realistic number to look at or a more realistic number would be 15% 17% kind of number.

Jitesh Devendra — Managing Director

See, as I said, we want to get back to our historical levels so yes, we have plans where we will be at high-teens or we will be at 20%, but this is going to take — it’s going to be a combination of just not FY 24, but it will be also FY 25 because if you look at the year as a whole when you look at on an outgoing second-half and more so with the Q4 of FY 24, then we will be in the high teens number. But yes our focus is always to see how we can get to the 20% and then always work on improvement of the EBITDA margins. And then we have done that in the past and there is no reason for us not to believe that we cannot get there.

Dhwanil Desai — Turtle Capital — Analyst

Just one follow-up on that. So, from where we are today to where we will exit in FY24, Q4 do we see gradual improvement moving towards that high teens number or will it come only in H2?

Jitesh Devendra — Managing Director

Yes, you will — the year as a whole when you compare FY24 to FY23, you will see a better number in terms of the EBITDA percentage. So yes and as I said, over the next few quarters we will be able to then come out and probably give a guidance as to how we are doing, because there are some moving parts which we want to just finalize, one of them being the reclassification of the Cuddalore OAI facility then getting the new products triggered by our customers and these new products, which we also file from Vizag that also we will see those validation, quantity is going to be picked-up by the customer. So all the actions what we have, we have already undertaken, now it’s only about the result and probably over the next few quarters, we’ll be able to guide better. But year-on year, there will be an improvement in both revenue, EBITDA as well as the EBITDA percentage.

Dhwanil Desai — Turtle Capital — Analyst

Understood, thanks sir. All the best.

Jitesh Devendra — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Vedant Aryan Khaitan from Konark Investments. Please go-ahead.

Vedant Aryan Khaitan — Konark Investments — Analyst

Yeah, hi, hello?

Jitesh Devendra — Managing Director

Yes please. Yes.

Vedant Aryan Khaitan — Konark Investments — Analyst

So, congrats on the Solara 3.0 strategy and the improvement in financials. I just wanted some guidance on what really changed between 2021 and today in terms of the business, because you said you turned the base, and how do we expect to get back to earlier levels or historic levels you mentioned?

Jitesh Devendra — Managing Director

So, if I understand your question you’re asking what is going to change from 2021 to the next financial year, correct?

Vedant Aryan Khaitan — Konark Investments — Analyst

What really changed for the dip in the financial performance and what are we doing to get back to historic levels?

Jitesh Devendra — Managing Director

So the did in financial performance, let me comment more in terms of what we are doing that will get back to historical levels and from there onwards the growth. We did mention the focus areas right and it all comes down to the execution of our focus areas that is growing the existing business, the new products, the CIP plan and building our CRAMS business. I think these are our four key areas and the subset of that is the enhanced capacity utilization at Vizag. So we are focusing on these four growth pillars as we call it and we are very confident that all the actions what we have planned for these four areas will yield in better results in the coming years. And we’re already seeing that in FY 23, you will see that in FY 24 as well as the years coming forward.

Operator

Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital, please go-ahead.

Ankit Gupta — Bamboo Capital — Analyst

Yeah, thanks for the opportunity. Sir, if you can talk about how has been the movement in realization of some of our CRI [Phonetic] products including ibuprofen over the past years?

Jitesh Devendra — Managing Director

So, we don’t give specific realization product-by-product, but as you can see the margin is improving so the realization of our overall product mix is getting better.

Ankit Gupta — Bamboo Capital — Analyst

And how much is ibuprofen currently contributing to our topline?

Jitesh Devendra — Managing Director

Again, we don’t give that number in terms of our ibuprofen vertical how much it contributes. It’s very sensitive information.

Ankit Gupta — Bamboo Capital — Analyst

But if you can just give a ballpark number, let’s say, like have we reduced our dependence on ibuprofen over the past two three years or it remains the same?

Jitesh Devendra — Managing Director

We are growing our ibuprofen business because ibuprofen, for us is just not one-product. There are multiple products in ibuprofen itself and our growth in Ibuprofen as well as non-ibuprofen products both are growing at probably the same percentage.

Ankit Gupta — Bamboo Capital — Analyst

So how do you see the product mix changing or remaining the same over the next two-three years?

Jitesh Devendra — Managing Director

The product mix is not going to remain the same because we also going to file new products, as I said we are improving the R&D velocity and we are focusing more on the quality of filings rather than the quantity. So yes, the product mix is just a funnel approach, right, because every new product we file, then we see the commercialization happening in two or three years. So that’s the momentum we are driving forward from a product mix perspective.

Ankit Gupta — Bamboo Capital — Analyst

And my last question was on the guidance for growth over the next year or so, so how do you see that growth in the topline for FY24 and FY25?

Jitesh Devendra — Managing Director

It will be in the similar lines of FY23 or better.

Ankit Gupta — Bamboo Capital — Analyst

Okay. Thanks.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for their closing comments.

Jitesh Devendra — Managing Director

Thank you again everyone for joining the Solara’s call and we look forward to our next call, post our Q1 results. Thank you and have a great day, bye.

Operator

[Operator Closing Remarks]