Solara Active Pharma Sciences Ltd
NSE:SOLARA
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
320.1
822.35
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Solara Active Pharma Sciences Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Q2 FY '24 Earnings Conference Call of Solara Active Pharma Sciences Limited. [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. Singhal.
Thanks, Michelle. 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 second quarter and half yearly ended financial year 2024.
Today, we have with us Poorvank Purohit, MD and CEO; and Mr. PV Raghavendra Rao, CFO, to share the highlights of the business and financials for the quarter.
I hope you've 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 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 the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out the Investor Relations team.
I now hand over the call to Poorvank to make his opening remarks.
Good evening, everyone. Thank you all for joining the call today. Q2 2024 is a turnaround quarter for Solara with improved capacity utilization. Our work on the key strategic priorities, which include resetting and concentrating the base business, restoring R&D velocity, addressing under-recoveries that are newly commissioned, Vizag site and expanding into new products and geographies have started to yield positive results for us and we'll continue to focus on further improvements.
Our current order book position is strong and there is improved visibility on Vizag. We have witnessed demand recovery across our product basket leading to top line growth in Q2 2024. We are pleased to note the increase in demand for ibuprofen business.
Coming to the Q2 performance, on revenue front, we had a 25% growth Y-o-Y. Gross margin stood at 44.3%. EBITDA at INR 38 crores, 27% growth Y-o-Y. On our R&D, we had filed 11 market extensions, which were done for 10 existing products during H1 2024. We continue to invest in our R&D further strengthening our generic API portfolio and CRAMS to meet the growing demands for our existing product filed as part of increasing market share through market extensions, addressing regulatory requirements for new products, et cetera.
Our capacity utilization at Vizag has improved significantly in Q2 2024. And we are currently in the process of qualifying regulated market customers to offtake products from our Vizag facility. We continue to focus on operating cost reduction, continuous improvement programs and inventory management to improve profitability.
Ramp-up in operations at Vizag facility led us to improved capacity utilization, resulting in reduction in under-recoveries. We continue to remain focused on the actions to improve profitability and confident about fundamentals of Solara.
Now I would now hand over to our CFO, Raghav, to take through the financial.
Thank you, Poorvank. Good afternoon to one and all. And this is my absolute pleasure and privilege to be part of this call and be talking to you as CFO of Solara. I will now take you through some of the numbers, and then we can open up for Q&A.
Our revenue for the quarter stood at INR 4,264 million, which is a 20% growth over previous quarter and about 25% growth year-on-year. Our gross margins are at 44.3%, which is similar to what we did in Q2 of last year in percentage terms. However, in value terms, we have profit gross margin of INR 1,891 million, which is a 25% growth over INR 1,561 million same quarter a year ago. And this growth is in line with the revenue growth.
Our Q1 gross margin was at 45.5%. Our EBITDA is at 9% for this quarter, this is 331 bps improvement over sequential quarter in percentage terms. In value terms, it is at INR 382 million and our EBITDA has grown by about 27% Y-o-Y. Our EBITDA for the same quarter last year was INR 300 million. And in Q2, it was INR 200 million.
Actions to improve our balance sheet and our debt position continue. We have reduced gross debt by about INR 283 million in H1. And further, we have also reduced the working capital by about INR 408 million, and it now stands at INR 8,115 million, it's approximately [ 190 ] days and is an improvement of approximately 20 days over March. We continue to work towards improving our debt position, our working capital, our cash flows and our overall balance sheet.
Thank you. We're good to open the Q&A session.
[Operator Instructions] The first question is from the line of Dina Jain, an Individual Investor.
My first question is on the revenue. So during this quarter, the revenue was INR 425 crores, which is a material jump both Y-o-Y and Q-o-Q. Is this revenue sustainable? And what drove the revenue during the quarter. Can we expect quarterly INR 400 crores now the new base on which the company will grow going forward?
Secondly, on the working capital days. So working capital days have stayed elevated since quite some time. What is the situation currently? And what is the sustainable working capital days that we can assume going forward?
Thanks for your question. And so talking about the revenue part. I think what we have done is we have put several robust review mechanisms to get maximum value out of the current assets and that was one of the primary reason why we have been able to grow the revenue.
Now coming to -- it is definitely a significant improvement over the last quarter, and we are getting back to old levels. But having said that, I think we would definitely be aspiring to these levels because we see a stability in the demand and we do have some engagement with customers. So we remain strong on the fundamentals. But like -- having said that, we would continue to focus on the fundamentals and the idea would be to deliver growth quarter-on-quarter, so that we are able to come out of boards what Solara has gone in the past. And therefore, we would be able to -- our objective would be not to be too ambitious at the current stage. But yes, definitely, this is just the beginning and we would continue to aspire for these numbers going forward.
With respect to the working capital, I can talk about the fact that, if you look at our current inventory levels, there was a lot of cash, which was stuck in the balance sheet and we have actually reduced the inventory and that has led to reduction in number of days. And our idea would be to have a continuous focus on the inventory reduction, which is also one of our strategic initiatives going forward.
Yes. Thank you, Poorvank. I agree with you in the sense that the working capital is at delineated level. And as you can see, there has been some progress made between March and September. There are actions that are happening and our efforts were in that direction improving the entire working capital in the year.
The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services.
Sir, just on this -- the revenue of [indiscernible] so I think what is driving demand for ibuprofen business. Is market share growing going...
I'm sorry to interpret. Your voice is...
Is this better?
The voice is not...
Yes. Your voice is muffled.
Is this better?
Yes. Please continue.
Okay. Sir, now on this current revenue base in the presentation, it highlights about good demand for ibuprofen business. So if you could further elaborate what is driving demand for ibuprofen business? Is it regulated, semi-regulated markets or it's more traction from the same customer, if you could throw some light?
So talking about the ibu demand, see what we have done is, if you look at the -- the primary driver has been -- we have -- we were -- we have strongly focused on the utilization of Vizag as strategic initiatives. That allowed us to jump the capacity utilization significantly. So some of the market, which we were not catering to because of the pricing realization, we actually tried to tap into that. And because of the stable demand, we are also getting into some long-term contracts with the customers, and that is actually allowing us to -- that allowed us to grow the revenue on that account. That's why you would see a -- in the slide also, there is a buyback utilization slide, you would see a significant jump on the utilization as well.
Understood. But at the same time, the gross margin has dipped quarter-over-quarter while sales have improved. So while the regulated market share is better off even sequentially. So how -- can you please explain that?
So in terms of the gross margin you're talking about?
Yes. Sequentially, it is still lower while the sales has improved and the share of revenue of...
Okay. So I got your point. So if you look at the broad revenue jump, I think it is pretty steep compared to the previous quarter and coming back to like the old levels or historical levels. So I think for us, it is -- we see it as a very positive sign because you talk about gross margin, especially when you are fully utilized. We cannot talk about under-recoveries and gross margins, that's number one.
Number two, I think we should look at it on a moving annual total basis, gross margin, it could be somewhere here and there, but I think we would still be in the same range. And our objective would be to go to higher gross margin levels going forward.
Okay. And even the traction in regulated market is not driven by ibuprofen is that safe to assume?
The traction in regulated is definitely there, and that is why you see -- I think we are talking about [ 70% ] revenue already from regulated markets. So that is already there. And it is not only on account of ibuprofen but also other products that we have seen, which allowed us to improve capacity utilization in other plants also. We had a higher demand on some of the other products, which allowed us to drive the revenue.
And also the overall revenue growth of 26%, if you could break down into price and volume?
So in terms of the price and volume growth, I would say that broadly, there is a volume growth because of increased utilization of Vizag. Pricing broadly has remained stable because we have not done any corrective measures, nor have we done any price reduction because at the same time, what we have actually focused on is the utilization of capacity, which actually allowed us to drive better revenue growth.
Because like I said, we talk about gross margin per se if the capacity is fully utilized. And I think that's also a very strong concept I would like to advocate. But if you're -- all your plants are fully utilized and you say that this gross margin level, it has gone up, gone down significantly. But if I'm able to maintain the same gross margin and increase the revenue growth significantly that adds to absolute gross margin. You see a INR 30 crores, INR 40 crores of jump of gross margin, which actually adds to the bottom line.
Sure, sir. And lastly, given that your -- you efforts in terms of the revenue growth and hence driving at least come into high single-digit EBITDA margin. But how far are we to be net profitable? Because if 9%, 10% EBITDA margin will still not help at INR 400 crores revenue to be coming out of the profit...
So what you're saying is absolutely right. So this EBITDA margin is not helping our -- we have spoken in the earlier earnings call also that our objective and our aim would be to get to higher teens levels on the EBITDA margins, and that is what we are striving to do. We are taking one corrective steps, one at a time. But like I said, continuing to display that growth quarter-on-quarter is very important for us. And therefore, I think I'm sure with the right steps and fundamentals, I can talk about the fundamentals. Fundamentals will remain very strong of the business. And we have covered very strong fundamentals, especially in the investor deck that we have shared, which actually gives a good flavor of that -- how we are attacking the business to grow higher margins in the long run.
[Operator Instructions] The next question is from the line of Monish Shah from Antique Stockbroking.
Just a question on capacity. What would be your total tonnage capacity at Vizag? And how much of that is operational?
So in terms of the capacity utilization, I can talk about -- from the previous year, we were talking about roughly around 20%, 25% of capacity utilization. We have gone to 50% capacity utilization levels now or even higher. And the objective is we are, in any case, qualifying other customers for Vizag. And also trying to enter into new markets, which will allow us to drive that capacity utilization. That's why you would see that our under-recoveries have halved in the first half. Earlier, we were only talking about a marginal decrease, but our under-recoveries have halved because our capacity utilization has significantly improved in Vizag now.
Got it. And how much of this would be dedicated for ibuprofen?
Broadly, it is -- I would say, majorly, it is dedicated for ibuprofen, but we are also looking at doing some of the other products there in separate blocks to increase the capacity utilization.
Okay. So I think from a previous update, I remember, it was roughly around 7,500 tonnes plant. So you're saying around 2/3 would be ibu and 1/3 would be...
Yes, yes, absolutely. Yes, yes, 2/3 would be ibu, but our objective would also be to utilize it for some of the other products. So we are -- the efforts are in place. And we have identified for 4, 5 products, and we will continue to have that focus as for Vizag.
Perfect. And are we naming any products besides of ibuprofen, which are keep on...
Yes, it would be. So let the revenue -- we start getting generated. That is only one of the product, but it may not be right to quantify because actually, we are looking at the mix of various products on what would be there. But having said that, it's a high KL capacity plant and we are looking at some high-volume products to be manufactured there.
Got it. And just last question on ibuprofen. So you've highlighted the demand scenario is better. So how should we look at it? Is it better in terms of pre-COVID versus today? Or is it still below pre-COVID?
See, when pre-COVID, so the demand for ibuprofen was there, but during the COVID times, it had come down and then the demand started picking up significantly. And I would say that it has not -- it would broadly be at the same level because ibuprofen generally, it's a very cyclical trend.
The demand right now, we see over the next 2 years, 3 years based on our discussion with the customer, we see the demands to be stable in a range and we do not see -- of course, there is some bit of pressure on the pricing, which, in any case, would be there because it's a commoditized product. But at the same time, our idea would be what we have understood from customers is the demand is going to be stable for some time.
Then lastly, on rights issue, any update over there?
Yes, Monish, this is Raghav. So I mean work is going on in the background. I know it's a little bit -- little bit time we have taken on this. But yes, the work is going on in background and you'll shortly hear some news on this.
Yes, I think we should be able to announce the plan in the next -- within this quarter only. So -- but yes, I think it's on fast track.
[Operator Instructions] The next question is from the line of [ Jagdish Sharma ], an individual investor.
There was a recent fire incident at Puducherry facility. Is there any impact on the business? And what kind of impact can we expect in the second half of FY '24? And has this facility [indiscernible] operations?
So sir, we have -- in any case, we have made an initial assessment of the impact, while the investigation is still going on, and we expect to complete the report within this week. But from prima facie, I can tell you, there would be some impact, but there will be no significant impact because we are talking about 2 blocks out of 76 blocks there.
But what would be the quantum of impact that is something we have to actually see. It is not doing any disruption with respect to supplies to the customer. But yes, what level of, of course and we would, in any case, be catered to -- it is something which we have to deal on the short-term basis on what would be and we are trying to come out of it. So it's not something we are much worried about. It's just there's some cost impact we'll have to take into consideration, but that's something only after the investigation, we can come to a conclusion.
Okay. Okay. Okay. My second question is like, can we expect the gross margin to come back to 50% -- like historic level of 50% in next 2, 3 years?
Yes. I can say, if I talk about the forward outlook, definitely, I think we have -- gross margin will remain a very primary theme for our company because what we do is we are actually not fully backward integrated on many of the APIs. So our objective would be to be reliant on the -- to make -- to have security of supply chain and that is where we are actually trying to bring focus on some of the molecules to bring down the costs while significantly improving the gross margin while doing some of the steps in-house, production. So that would definitely -- yes, in the next 2, 3 years, we can expect to be in that range only consistently.
[Operator Instructions] The next question is from the line of Piyush Saraogi, an Individual Investor.
What is the net debt as on the quarter end September '23? How much debt reduction can we expect by the end of this financial year?
Yes. So we are -- by the end of -- this is Raghav, Piyush. End of September, I think our debt portion is about INR 972 crores gross debt. So that's one. And second is -- as you'll have observed, we have reduced debt by about INR 28 -- sorry, INR 29 crores between March and September. So we are -- directionally, we are looking at further reducing the debt and we are working towards that.
Okay. And what is the contribution of our new products to the revenue this quarter?
Sorry, new?
New?
New products towards revenue this quarter?
New products.
New products. Are you talking about the new products?
Yes. Yes.
So it's roughly in the range of 5% to 10%, and that's the contribution we see from the new products.
Okay. And with a 2- to 3-year perspective, could you highlight our aspirational revenue growth target in mid-teens would be that a figure which we can estimate for the 2- to 3...
I think, yes, definitely, if I talk about that, this is something we are also aspiring. I am strongly bullish on the fundamentals of the company. And if we are able to do -- achieve all the measures that we are actually talking about, I think as we follow the process, we should be able to get to that level. That's a given.
The next question is from the line of Mayank Goel. [Operator Instructions] The next question is from the line of Mayank Goel, an individual investor.
Firstly congratulations on the revenue and EBITDA growth. Most of my questions have been answered. I would just like to know that when the company is expected to be back to the profitability level, when we would be posting profits? Is there any visibility on the quarter or year?
So I can tell you for a fact that I think those corrective measures have already been taken. And I would say that I think if you -- I talk about the forward-looking thing, I would not like to comment anything on the numbers per se. I would like to be little conservative with respect to what we are demonstrating and our objective would be to continue to display a strong quarter-on-quarter growth and year-on-year growth. And that is what -- and if we are able to deliver that track performance, then automatically, we'll come out of the woods. That's there.
Number 2 is also the fact that, of course, coming back to -- of course, we want to come back to the original levels, and we want to have a profit showing -- that is taking some time, but it is also because of some of the past measures that we have to actually -- we are taking that into account, which some of the old things that went into the company. So we are trying to do a quick assessment of that, and we are trying to attack each of the areas one by one.
So -- but yes, I do see that, looking at the fundamentals, we are trying to attack each of the areas one by one. Whether it is debt, whether it is gross margin, whether it is OpEx, whether it is cost improvement programs -- we are -- whether it is revenue growth. So we are looking at all these critical parameters to see where all we can actually do an improvement. And this is what you see, and we will continue to aspire to similar numbers going forward.
The next question is from the line of [ Shubro ] an individual Investor.
So sir, did you just mention that the Vizag facility utilization is about 50% on?
Yes.
But in the slide, I see the revenue for this quarter is just about INR 33 crores. And if I am not wrong, in one of the previous con calls, it was mentioned that Vizag has a revenue potential of about INR 400 crores. So what am I missing here, sir?
So if I talk about -- like if you have heard the call, we have -- one of the dedicated blocks for ibuprofen and where the commissioning has already happened, that's where the utilization has happened. And we are calculating based on the KL thing. Now there were several other products, which we -- which were not formula -- which were not scaled up during that time. And that -- once we look at all these products put into together, then we can actually talk about the full capacity utilization of Vizag.
In terms of -- your missing out on the point, I would say that primarily because ibuprofen capacity is installed, that's where we are actually seeing under recovery is actually coming down. If you would see that we talk about INR 30 crore, INR 40 crores of under recovery, we had posted INR 40 crores of under recovery. Actually, it has come down to INR 10 crores only for the H1. So that's where I see -- I say that the capacity utilization has gone up and under recoveries have actually come down.
And we are talking only about under-recoveries. We are not talking about the revenue right now. We may have to do some tweaking. First of all, we want to utilize the capacity. There could be a product mix change, which would be required to have the optimum revenue from Vizag, but that is -- there is still time, some time. Our idea right now is to focus on the Vizag full utilization, that's when we can actually -- which actually allowed us to drive the revenue, which you see in the gross margin growth, which you see in the revenue growth also, and this is going to be the objective going forward also.
So I understand. And my next question was regarding that product mix change, which you referred to. So over the last 12 months, Solara has actually been really walking the talk. So I think we have been following the path to a good [ refit ]. But my question is from a 12 to 18 months' point of view, how do you see the ibu contribution to your revenue coming down because that is really making the company too highly dependent on the supply and demand dynamics.
No. So if I talk about the ibu in any case, it has been broadly historically at a level of around 45%, 50%, and that will continue because we have a stable demand. And like I said, if we have a capacity which is already installed and which is sitting idle, why should I not take more market share.
Our objective would be to utilize the existing capacity, which are already commissioned while we improve -- so our objective would be to reduce the percentage of dependence while also increasing the market share in absolute terms. So basically, which means the other products also have to grow significantly, and that's where we are actually trying to attack some of the other products wherein we have not got into the market and we would try to focus on some of those products, which are able to drive the revenues.
So that's absolute -- and while we are also focusing secondly on the ibu contribution, getting market share with some of the companies so that while we are able to get more market share, more absolute contribution from ibuprofen, the percentage itself will come down going forward. And that's what we are aspiring to, which will actually also improve our gross margin in the long run. And that's what the theme of the company is.
Sir, any qualitative or quantitative estimates which you may give for the like 18 to 24 months, what will be the contribution of the new products?
See, we have several new products coming in, but it would be difficult to quantify at this stage, but I have already covered in the current call that -- we see a very optimistic estimate going forward. 18 to 24 months, we are definitely working on these areas. I have spoken about gross margin. I've spoken about revenue. I've spoken about the EBITDA margin. So if you look at all these parameters, I think we should be able to get to that level. This is what we can say, looking at the current thing.
But I'm fundamentally confident about the area that we are attacking, which should yield us result in that direction actually. We are clear about what -- we are clear about what we are doing, and this is the right way to approach things from the business point of view, and this is what we are trying to do from all the sites so that we are able to drive the intrinsic value for the business.
One last question from my side. For the last 2 years, saw the operating cash flow has been in the range of some INR 100 crores. So in a more stable sort of environment, what do you suggest suppose being a stable operating cash flow annually for Solara?
[ Shubro ] I'm not very clear with your question. So our operating -- I mean it's basically driven by business, right? In the sense then the business growth will be -- in the extent of the cash flow will also grow. So as...
But can you elaborate on your question, right?
My question was that -- so the last few years have been pretty full of turmoil. So my question is assuming a stable business environment, what would be a stable sort of an operating cash flow that the business can throw in?
See, Shubro I would not like to allude to any numbers right now. So there are 2, 3 items that will help on improving my cash for that, I can call out. One, which Poorvank has been speaking for the last couple of minutes is on the improvement in the overall business itself. So that is one.
And secondly, we also spoke earlier in the call about improving the hygiene in the balance sheet. So as you know, and asked by, even earlier. I think there's a lot of views sitting in the working capital. So that is something that we can leverage and a lot of cash sitting in inventory, receivables, that we can leverage. So there's a lot of play available for us, both in terms of what is there in the P&L and balance sheet. I think -- that's a work in progress, and we are directionally working towards that.
The next question is from the line of Shaik Mohammad Ayaz, an Individual Investor.
I need to ask one question regarding other expenses. The quarter -- year-on-year, the expense has been rise by around INR 20 crores. I just want to know what is that?
So I think -- so one of the things is, basically, we had lower utilization of the Vizag plant and that actually allowed us for some expenses to go up. And -- but putting that, I think, consciously, we know about the OpEx cost going high and our objective would be to benchmark with the industry that could actually be one of the measures, which I can talk about right now going forward in terms of how we bring down that. And that will be one of the exercises which will actually drive our margins as well.
Okay. From next quarter onwards?
Not next quarter immediately because if you talk about the cost improvements, actually, there are some measures we have already taken in terms of curtailing costs. We are also looking at the optimal manpower across the areas. And basically, the idea would be there is a significant, significant focus on how we benchmark with the best practices in the industry in terms of the right manpower, utilization of proper resources and so on. And that is what -- once we have firmed up the plan and we work towards it, that is the time when we can actually talk about it.
But when we talk about our growth story for Solara, we have to look at all these measures and we would not miss out on any of the measures if we have to look at the performance of the company in the long run.
Okay. That is helpful. So another question is how you look at H2 compared to H1? Is there any improvement we'll be seeing?
Sir, I spoke about the quarter-on-quarter, Y-o-Y growth. Our aspiration would certainly be that we would -- we actually start delivering this type of -- we work on the fundamentals because we are actually not looking at -- we want to grow this by so much, and we want to grow in margin by so much.
Our objective is to fix the fundamentals of the company and once the utilization goes up, once we have a better utilization of other products when our market share increase, all these things, we are taking all these measures together. So automatically, it will be a function. So this is how we drove the current quarter also, and we would also try to focus on the fundamentals. But yes, I think that is the aspiration we also aspire to do quarter-on-quarter.
The next question is from the line of [ Madan Chhajer ], an Individual Investor.
First of all, congratulate you for excellent performance. And so most of the questions have been answered. I have a small question. You have mentioned Vizag under-recoveries have reduced by half. Can you please elaborate what is the turnover of Vizag plant as of -- in this quarter? And if the plant is utilized at 100% level, what could be the turnover and the gross margin?
So I'll tell you, so I think this is -- when you talk about this, so Vizag, like one of the gentlemen's in the call already asked about that. It also depends on the optimum product mix. Right now, what we have done is we have commissioned the utilization of ibu. So in any case, we have done roughly around INR 50 crores, INR 60 crores of odd revenue already in the first half of the year. And the idea would be to do qualification for several other customers and improve that on the ibuprofen front. While also focusing on some of the other products, so that upside still remains coming forward, which will actually drive the revenue going forward?
Sir, can we assume that, okay, at least if we run the plant at 100%, the minimum turnover -- increase in our turnover would be at least by INR 50 crore to INR 60 crore and the margins would be INR 20 crore, INR 30 crore?
So if you talk about the full...
I mean -- in the product mix -- sorry, sorry to interrupt. Suppose if the same product mix is continued, take a theoretical situation, whereby the same product mix has continued. What kind of turnover we can think -- what kind of increase in turnover and increase in margins we can expect?
So I think if you -- if I talk about ibuprofen per se, so ibuprofen in any case is a commoditized product. We have actually not but like the revenue for regulated market will start from Vizag. So that will contribute to the realization of gross margin.
Number two, when we talk about the products, the other products to be scaled up at the Vizag plant, that will also further improve. So the numbers that you're talking about are definitely doable. I think on a conservative basis, and we are looking at much bigger plans for Vizag. This is what I can tell you at this stage.
Excellent, sir. Excellent. One small last point, very small, though I wouldn't like to comment. But don't you think our debtors are very high as compared to the turnover, I think it is more than 90 days or something like...
No, no, Madan, you're right. I mean there is nothing to be -- that's the right observation.
And sir, you are the best judge and you're taking care of all these things...
Yes. Sure. I mean you...
Sir, by chance will, in any case, improve -- it will be a function of the business activities, it will be a functions of the measures that we take. And we do see a good improvement going forward on the debtors also.
Ladies and gentlemen, this will be the last question, which is from the line of Ankit Jain, an Individual Investor.
I just want to understand, we have seen an increase in the price of ibuprofen in the last few months. So how does this look for Solara?
Not able to hear you. Can you repeat the question, please?
Yes. I'm saying, you have seen an increase in the price of ibuprofen in last few months. So how do we look this for Solara?
So if you're talking -- are you talking about ibuprofen?
Yes.
So ibuprofen prices have not gone up. I think they have remained stable. And with respect to Solara also, I think being a part of the common supply chain thing. I think if the prices affect everybody, it also affects us. But having said that, what we are also trying to do is we are trying to have a long-term engagement with some of our premium customers so that the prices do not affect us.
So there's been only the increase in the demand and not to the price, correct?
Increase in the price is something if -- not in the price for sure because I think because, having -- the nature of the business is like that. Until unless there is a significant shortage and Solara remains the only player in the market that is where you could actually see some bit of a price hike. But other than that, I do not see any reason why the prices would actually go up significantly.
And the demand that we have seen increased this quarter, is it a temporary demand or you can see this as a function going forward.
No, I think one of the -- in one of the large board meeting we had mentioned that, there we had -- we are the first company to launch a product like ibuprofen in China. So that demand, we see stability. We have got into some of the other markets also, wherein we were not tapped. So we see a good stability and we are also increasing the wallet share or the market share with some of the other companies we have not targeted. So all these efforts are going in that direction.
Ladies and gentlemen, as that was the last question, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
So thank you all for joining the call. And so we look forward to our next interaction in the next call. Thank you all.
Thank you, members of the management. Ladies and gentlemen, on behalf of Solara Active Pharma Sciences Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.