Ladies and gentlemen, good day and welcome to the Q3 FY 2022/2023 earnings conference call of Gufic Biosciences Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Ami Shah, Company Secretary. Thank you. Over to you, ma'am.
Thank you. Good evening and a warm welcome to Gufic Biosciences Limited earnings conference call for the third quarter of financial year 2022/2023. I have with me Mr. Pranav Choksi, Chief Executive Officer and Whole Time Director, Mr. Devkinandan Roonghta, Chief Financial Officer, and Mr. Avik Das from Investor Relations team to give the highlights of the business performance of the company and to clarify all the questions of the investors during the call. We will begin the call with the business highlights and overview by Mr. Avik, followed by financial overview by Mr. Roonghta. After the opening remarks, the operator will open the bridge for Q&A session.
Before we proceed with the call, please note that some of the statements made in today's discussion may be forward-looking and are based on management's current expectation, and this may be viewed in conjunction with risk and uncertainties involved in the business. The company assumes no responsibility to publish or update or amend, modify, revise any forward-looking statement based on any subsequent development, new information in future, or except as required by the applicable laws in force. This call is being recorded and the playback of the call has been made available or will be made available on the website of the company shortly after the call. The transcript of this call will also be submitted to the stock exchange within the stipulated timeframe. I'll now hand over the call to Mr. Avik for his opening remarks. Thank you. Over to you, Avik.
Thank you, Ami, for your opening comments, and welcome everyone to our call. I'll start with giving you all an update on the Indore project, and subsequently I'll follow it up with some of our key developments in each of our business verticals. With respect to Indore, as you all are aware, we have focused all our energies in ensuring that we are on track with commercializing our Indore facility. I think it's about time that we give you all a deep and detailed insight as to the progress of the facility. With respect to our civil work, we are very happy to inform that our main plant, our utility block, and our R&D block, we've nearly completed 90% of the civil work.
With respect to the main plant, we've about to commence the work on the pre-engineered building, which is the last floor of the facility. Now coming to the equipment. With respect to our imported equipment, which are primarily lyophilizers, we've received both our consignments. However, there was a bit of a delay given the lockdowns in China. However, we've been able to get both our consignments and the installation is underway. Now, with respect to our indigenous equipment, our, in cases like HVAC systems, transformers and our manufacturing tank and vessels, we've received the materials on our site. The installation is under progress. We do not foresee any challenges in terms of sourcing any of these equipment.
We hopefully should be on schedule to complete the installation. There may be some delay, and we'll keep you all informed with respect to that. Now, coming to the various divisions. We'd informed of the launch of Sparsh as a division. We are very happy to inform that we've completed our primary and secondary research on the field, which involved reaching out to nearly 5,000 hospitals, where we mapped the potential for around 150 molecules. These are specifically molecules of interest to us. Some of them we are already present and some will be new molecules that we'll enter.
As per our initial assessment, we foresee the annual market is INR 500 crore-INR 600 crore. We have now geared up to gain around 20%-25% market share within the next year. This involves creating a supply chain to source these molecules, to manufacture these molecules, and also a very innovative method to reach these molecules to the various hospitals. We've hired a team, a dedicated field force in this particular division. We've started reaching out to these hospitals, and we should start seeing the division give us commercial results very soon. Now coming to Aricia.
As the Aricia clinic is now fully operational, and our friends and well-wishers who are there in Mumbai, we request you to, you know, you all can come down and visit and feel and take a feel of the clinic yourselves. We've also started the knowledge sharing initiatives in Aricia. As a process, I mean, as one of our initiatives, we've started training gynecologists over there. We have every 15 days, we are hosting various speakers from around the world. Now in Aesthaderm, we've started the process for registering dermal fillers. We are very hopeful of launching these fillers also very soon. With respect to the dual chamber bag.
We are awaiting approval from NPPA, and we've kept the commercial launch on hold, and we'll keep you all updated as soon as we receive the approvals. On the international business side, we've received three product approvals, one each from Colombia, Kenya, and Philippines. Yes, that's about from my side. I'll hand over the call to Mr. Roonghta for updates on the financials.
Thank you, Avik. I will just give a financial highlight for Q3 of the financial year 2022/2023 versus the Q3 of financial year 2021/2022. The total revenue for the current quarter is INR 178 crores against the previous year Q3 quarter was INR 174 crores. EBITDA for current financial year, current quarter is INR 34.1 crore. Previous Q3 was INR 34.2 crore. EBITDA margin for current Q3 is 19.1%. In Q3 of 2022 was 19.7%. Profit before tax for current Q3 is INR 27.2 crore, last year it was INR 28.7 crores. Profit after tax was INR 20.3 crore for Q3 financial year 2022 through 2023. Last year it was INR 21 crores. The PAT margin for the current Q3 is 11.4%. Q3 of last year was 10.1%. Thank you.
We can start with the Q&A session.
Sure. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue you may press star and two. 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 is from the line of Gunit Singh from CCIPL. Please go ahead.
Hi, sir. For financial year 2022, we saw a top line of about INR 780 crores. Right now for the trading 12 months, we are doing around INR 680 crores. Do we see us surpassing the revenue that we did in financial year 2022? What is the reason for the revenues to be lower for the trading 12 months as compared to FY 2022? That is my first question.
Thank you for your question, Gunit. Pranav here. Just to give you a little bit of a background about the revenue as such, if you see the revenue in 2022, 2023 was... I'm sorry. The revenue which is gonna be in 2022/2023 on a run rate is around INR 170 per quarter. Last year when you saw INR 780, that also had a impact of the COVID also coming in. There was almost, like we have mentioned in the previous few calls also, almost to the level of INR 175 crore to INR 180 crore of revenue was a one-time revenue which we have recorded last year due to the COVID reasons. If you compare the revenue before that, it was INR 487 on an annual on a annual level.
From 487 we had gone to 780, where we had clarified that there was a one-time revenue capture of COVID and COVID-related drugs, either due to COVID or due to black fungus and Mucormycosis, and that has was a one-time thing. On the contrary, this year we have taken more than INR 20 crore, INR 22 crore of stock back, which was build assuming that the wave three and wave four would have come, but that has already been adjusted in the net revenue this year. That's the reason you are seeing, you know, go 487 to 780, whereas in this year you are seeing an average of a quarter revenue of 170. That's the reason. Overall, as a company, we are still growing by minimum 15%-20%, if you, if you factor out the one-time COVID revenue.
All right. I have two more questions. I'll just read them out right now.
Yeah.
First question is that we historically have seen our operating margins to be around, say, 10%-13%, 14%. Currently for financial year 2022 as well, as well as right now for nine months, we are seeing our margins to be around 19%-20%. I would like to understand how, I mean, the reason for this jump in margins, and whether this will sustain in future and what will be a steady state operating margin. The second question is that you mentioned that the Sparsh product that we have launched, we expect to gain about a 25% market share in that. I would just like to understand by when can we expect this to reflect in our revenue figures?
Given that the market size is about INR 500-INR 600 CR, can we expect that in financial year 2024? Can we expect about INR 100-INR 125 CR from today's Sparsh? This is my second question. Thank you.
I think in terms of your margin, I will request Roonghta sir to answer that point after I finish my reply to the Sparsh question. I will take the Sparsh question first. First, just to clarify what Avik said, the total molecules which we have planned to take is around close to 300 odd molecules, which represent a total of INR 9,500 crore market capture out of the total INR 190,000 crore Indian pharmaceutical market. Out of the total market of INR 190,000 crore, which is the total Indian pharmaceutical market, these 300 odd molecules in phase I and phase II comprise of around INR 9,500 crore. They comprise of about close to 9,500 market representation.
Out of that, we have launched around 130 molecules in phase one. The total 130 molecules in phase one comprise of at least INR 7,500 crore market representation. Out of that, we have selected that down the line in the next five-seven years, we should be catering to, we should be capturing INR 500 crore-INR 600 crore market input in terms of Gufic as a company. From that, we feel in the first two years we should be capturing a 20% market share, and you rightly said. We are looking at, the launch has happened in December. This quarter will be. For the first two months of the launch, rather than starting the sales, we have spent complete energy and effort first to just map out the market.
Once the team gets busy in operational matter, we don't spend time in market intelligence. We have actually not only for the period of from starting from December first week all the way till actually not even January end, February 10th, we have asked them to just go around and capture the market where we have keyed in and mapped out the primary, secondary, and tertiary, I would say hospitals and nursing homes in the area of operation in the current geography. The geography is around five states, just to clarify, that is where the numbers are coming on a more, I would say, curated manner. Then we will be gradually, if it works out in the five states, we will go to the other states also. Coming back to this market.
This market intelligence will help us in two regard. The products which have been selected in Sparsh will be different from what is there in the critical care division. Once we get more insight about the market, this list of primary, secondary and tertiary, I would say healthcare centers will also be used in terms of market penetration by the critical care division, where we already have more than 200 people also. We are looking to expand our current market share and our penetration in Indian market, getting more data on a real-time basis in terms of hospital counter rather than geography right now. When we go for hospital counter, the business becomes more predictive.
At the same time we can also learn in terms of, we're also using some specific data tools or we are looking at some data analysis points by which we can come to a little bit more of a predictive business down the line. Keeping in mind also the consumer selection. Depending on the geography, depending on the area, depending on also the PIN code, we can come to know what sort of prescription guideline or drug usage guideline is being followed in different parts of India. Which helps us to also come up with a better basket, which is catering to very unique markets rather than having a common strategy for the rest of India. This is just I'm clarifying.
The Sparsh will start capturing revenue from February end. This quarter you will see approximately two months of revenue capture from Sparsh, and going forward, yes, we hope, and that is our target, that we are looking at close to an INR 100 crore run rate from next, I think at least not in 2023, 2024, but definitely for 2024, 2025 we should look between INR 100 crore-INR 125 crore going forward. This is answering your second question. Coming back to the margins, I'll hand it over to Roonghta Sir to please answer.
Sir, regarding your EBITDA margin, if you see the EBITDA margin from the financial years 2016-2017 till 2019-2020, it was in the range of around 13%-15% when our turnover was in the range of around INR 250-INR 400 crores. Now from 2020 onwards till 2023, the margin has been improved from 18%-20%, and the turnover has also been increased from INR 400 to around INR 600-700 crores. Whenever there is an increase in the turnover, the fixed cost will be not going to increase in that ratio. For example, our salary cost in 2015-2017 was around 15%-16%. Now it has come down to around 10%.
Whenever there is increase in the turnover in the same ratio, there is not increase in the fixed cost. That was the reason that our EBITDA margin has been increased. Whenever in future also if the top line is going to increase, EBITDA margin is going to further increase. Thank you.
All right. Thank you very much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to 2 per participant. The next question is from the line of Yash Tanna from iThought PMS. Please go ahead.
Hi. Good evening, and thank you for the opportunity. My question is, we have given a guidance of 15%-20% on a next COVID basis last year. I think now, maybe to meet the lower end of the guidance, we'll have to do about INR 200 crores quarterly run rate. Do we still maintain the guidance of 15%-20%? Over the medium term, that is next three-five years, what are our growth aspirations?
Thank you, Yash, for the question. Yes, I think just to tell you there are a lot of growth levers which we are working on side by side and as I've been discussing. Of course, Indore being there would definitely add as a Indore, when I mean Indore, the new manufacturing facility which is coming up in Indore, which will be commissioned by June or the maximum by first week of July 2023, will definitely add in that number which we see. Because the capacity in Indore would be at least two and a half times to what we have currently. I'm sorry. The capacity in Indore would be around one and a half times. The current total capacity of Gufic would become, you know, almost, you know, two and a half times more than we are currently.
That would definitely help the number. Of course, Indore will take time because we are looking at a regulated markets strategy along with the Indian domestic market growth. Initially when we look at a capacity utilization of around 15%-30% to 60% in year one, year two, year three, automatically the numbers would start coming in. We also are looking at our domestic business presence in all these six, seven divisions, now eight divisions if you consider Aesthaderm and Arete also. There, we are looking at organic growth coming in from there also. We have got some, you know, I would say reduction in the growth percentage in terms of the contract manufacturing would not increase that much.
With international business kicking in and more and more country registration coming in, we foresee that the averaging, even though the base of international markets is low, we still feel the higher growth percentage is there, followed by the organic growth in the domestic market, plus Indore kicking in would help us to ensure the 15%-20% growth year-over-year. Of course, there are other business avenues in terms of research. As we have mentioned, the biological research is happening much thing. That's one of the reasons you are seeing the other expenses in this year go up because a lot of our, I would say basic research into biologicals, apart from even toxin, new drug delivery systems and also some new peptides is still continuing.
All these are being worked out in the background to ensure in year two, year three, year four, year five also along with Indore, we maintain a minimum run rate of 15%-20%.
All right. thank you.
Just to add to what Mr. Choksi said, last year, we did our top line at about INR 170 crores of COVID revenue. If you exclude that, we would still be doing a growth of about 15%-20% this year.
Okay. We consider the base of INR 600-INR 670 crores, right?
Right.
All right. In terms of our newly launched products, I'm referring to the last investor PPT, products like Cetirizine, Amlodipine, Dydrogesterone dual chamber bag. How have these been performing? I believe out of these, Dydrogesterone would be a significant molecule. One of our smart CRs have also written about 3% market share. How has that been for us, new product performances?
Yeah. Correctly said. Just to clarify that, as we mentioned the last call also, Cetirizine Amlodipine was something where the R&D had happened in Q3, and we were looking at the launch in Q4. On January end, we have launched the molecule in India. The Cetirizine Amlodipine revenue would start kicking in from the January to March quarter. That is number one. Number two, Dydrogesterone tablets, yes, since we have launched in around 2 different divisions and now we have a 3rd SKU also being launched for a specific market, we foresee that this brand should be very close to come close to an INR 10 crore brand in the period of less than 2 years or less than a year and a half.
That is something which is, which has further increased in the third quarter, and we foresee a traction happening in the fourth quarter and so on. The dual chamber bag, specifically Biapenem is what we got the permission, plus we have the permission for meropenem and Piperacillin and Tazobactam also. Since we had applied for NPPA had given us only a 15%, 20% MRP allowance beyond the current limit, which was not feasible. We have re-represented our case to them once again in the month of December and once again in the month of January. We were told that meropenem MRP would be under reconsideration, and hence we were asked to wait till the actual MRP of meropenem is established by them for a normal conventional dosage.
Now just, I think a couple of weeks ago or three weeks ago, the draft of the MRP of meropenem has been out. They would be now finalized hopefully in the next one or two weeks because they gave the industry 10-15 days to come up with their feedback. Once the MRP of meropenem is established, then we will be able to apply for a new MRP of meropenem. having in a nutshell, dual chamber bag, even though we are ready, we are more than gung ho to get even the market is very gung ho about it. Till we get the NPPA permission to launch the product, we will not be in a position to launch the product. I foresee that even normally we do not launch any major products in the last quarter.
I am looking at now assuming that the process should be done in Q1 to launch the product in Q1. The revenue of the dual chamber bag should start capturing from Q1 2024. That is about the three timelines of the three different products which are being launched.
All right, sir. Pranav sir, in terms of-
Sorry to interrupt, sir. We request you to please rejoin the queue for further questions.
Sure, sure. Thank you. Thank you. Understood, sir.
The next question is from the line of Ajinkya Jadhav from KamayaKya Wealth Management. Please go ahead.
Yeah. Thanks for the opportunity. I would like to know, how is the traction in Stenox and Darbar?
Like Stenox is, I think, doing reasonably well. I think, as we had mentioned last time also, the growth percentage month-over-month is still being maintained and it's going on. We hope to, you know, close very close to ideally, almost four times sales over last year, hopefully by the end of the year, keeping in mind Stenox. Zarbot unfortunately, we initially thought of getting the same from our critical care division, where we had 200+ people by having a special team done. However, we realized very soon that, you know, critical care, you know, caters to a very different, I mean. Even though it's part of the critical care system, intensivist and anti-infective is a specialty.
We needed a team which is much more catering to neurological in terms of their basic knowledge and core competency also. From November onwards, we were in the process of recruiting a separate team, which would be catering to the neuro, I would say, neuro care division. We also have, you know, recruited some specific, I would say, experts who have already handled the toxin in the past with their previous companies. We feel that even though Zarbot has launched and it has reached a basic, growth, it's not growing as fast as Stenox.
With a new team coming in who is much more, I think, well linked and I would say much more technically, you know, adept in handling the toxin with the right target audience, we do feel that it should start kicking in from March or April. The team was recruited all the way from September. They start joining in from November, and the recruitment should be over by February end. From March, we'll have a full team who is dedicated to just selling Zarbot in India, Indian market space. This is the current scenario.
Okay. From Aricia, how many batches of the doctors have been passed and what is the size of the batch, like say few hundred?
Yeah. Aricia is more of a training thing, not that there's any, I would say. Right now there have been more than, I would say, five batches which have gone through, but it's more of a collaboration where we, you know, discuss more about the new, I would say, new strategies or the new technical, I would say, practices which are happening in cosmetics as well as, you know, Gyne cosmetics as well as we have tied up with Dr. Namit Mehrotra, who is from Elle Sante who's worked on vaginal rejuvenation and vaginal tightening all the way from, you know, I would say, body and face contouring also. A lot of, I would say, information base which gets done, and almost, I would say, five batches have gone through.
Apart from two batches dedicated to, I would say, the cosmetic gynecology, remaining are for body and face contouring. From December when the Aricia was initiated till February now, around five batches have gone through.
Okay. Last question is like how is the-
Sir, we request you to.
Okay.
Redistribute the question queue if you have further questions.
Yeah. Thank you.
The next question is from the line of Chetan Phalke from Alpha Invesco. Please go ahead.
Yeah. Thank you for the opportunity. Pranav sir, when do we expect EU certificate for our Indore plant? Is it in place?
No, sir. As Avik said that the plant will be commissioned by around June 2023, then there will be three batches validation taken for the target molecules, and then we'll have to wait for, you know, six months stability. We are looking at the calendar year 2024 for all accreditations to start kicking in, be it EU or be it other countries. Eventually, if we find a suitable partner, then it would be the other regulated markets of, you know, America also. The timeline will be 2024.
Okay. Do we intend to fill our capacity with some CMO contracts same time we await the certificate?
Yes. Already we are in touch with, I would say, clients who are country-specific. At the same time, we have some specific molecules which we'll be marketing in India through Sparsh. As you know, we believe in global, one single global quality. There are a lot of new products which we will be, you know, right now launching in Sparsh, which will be manufactured in Belagavi right now and would be outsourced from a third-party vendor, but they would be eventually made in Indore. Indore would help us for the economics of scale and the right pricing and the right quality to make those products started.
The initial capacities would be with Sparsh plus CMO plus, then, you know, there would be some domestic market also, you know, I would say new products which we are working on which we'll be launching. Eventually then you would have, international business kicking in.
Got it. For CMO business, how does the margin profile look like? We have been seeing this over the last couple of quarters, there is a compression in CMO margins across the pharma value chain, and a lot of CMO plants have come up in the last two years. Are we seeing any pricing pressure and do we intend to reduce our prices in, especially in LIFO, in order to maintain or retain our market share? What is your outlook on the pricing?
Again, I would say that the CMO margins are actually not what is eroding in the last two years, very frankly. I would say the reason that the margins are, we are seeing is being compressed, I'm saying purely in the critical care space or injection space would be the increase in inventory. If you see post-COVID, not only in India but around the world, a lot of inventory had been kicked in. Because of the inventory being kicked in, assuming that, you know, a wave X, wave Y would, wave Z would come, a lot of people were stuck in that, and that had led to some sort of a slowdown in the CMO business overall.
Having said that, since the, what do you call, most of the products which are manufactured in April to September 2021 would be getting either expired or would be sold out in the next six months. We feel the CMO would still be in the, I would say, intact. Keeping in mind the competition, there are very unique products which we are working on rather than. Of course, at the same time, we're working on certain me-too basket products also which we keep on having. Economics of scale always help us to maintain the same margins. To answer in a nutshell, when we do a proton pump inhibitor, yes, we understand that the margin would be 25% on a very high volume.
There are certain infectives and anti-infectives and export markets start kicking in when the margins go as high as 45%-50% also. We also have to be very clear that these are the gross margins. In such CMO practices, there might be only the factory overhead which needs to be amortized and not any other employee costs or other expenses also. We still feel that CMO would be an important factor going on, especially when we have new markets kicking in. As we have mentioned in Q2, our Penem block also have started. The Penem block was started in Q2. We started the validation done, and we have started filing dossiers for the Penem block in this Q3 and Q4.
We hope that even the Q3, Q4 Penem outlook also will start helping us from the next two years. Again, I think it's not about the margin shrinkage. It's all about just the question of being in that, you know, time reference, which should automatically ease out end of this year.
Okay. Okay. For the next 12 months, we don't see any significant pricing pressure or pricing cuts per se.
Not due to CMO. I think the only thing pricing pressure would come where the NPPA pricing is there and the Chinese API prices or any other API prices go for a nutshell, keeping in mind environmental conditions of, you know, fuel and war, et cetera. Those are the only reasons which get into pricing pressure. Like I said, most of the products which were coming to a near expiry or would be expired, people have just, you know, the last two quarters, three quarters, just reduced the price and just, you know, load them in the market to ensure there's no loss of inventory. That's the thing which we will not see in the coming future going, except for environmental conditions.
Okay. Got it. This is my second question on the receivables and the debt.
Yes.
In September quarter, I think our receivables have gone up significantly to INR 180 crores.
Right.
How are they looking now? Do you see this cycle reversing? I think the receivable days have gone up due to stretched payment cycle by most of the CMO partners. What is your take on this? How do we intend to fund the receivables? As we move ahead, our CMO business will become even bigger.
Right.
the current base.
Right.
Those facilities. It will require a huge working capital constantly in the current context.
Right.
Just try to understand how the working capital cycle will look like. Will it remain around the current levels? How do we plan to fund it, given that our debt is already around INR 130 odd crores. Just trying to understand your view on this whole situation.
Sure. I'll answer that question in form of a business point of view. I'll also request Roonghta sir to answer it in form of the balance sheet point of view in terms of basic numbers. We have to understand one thing that post-COVID, one thing has been very clear, and even after COVID also, even the last six, eight months, as we have seen the entire, I would say, credit line in India especially has been, you know, loosened from... I'm talking about the CMO business first, I'll come with the normal trade and so on and so forth.
The CMO business, which at one time was around 30 to 45 days to 50 days or 60 days, even big companies, I'll not name them, but even the top 10 companies of India now moved on to a 75 days, 90 days normal, you know, credit period, keeping in mind the inventory which they want to keep going forward. This might be one of the reasons that, you know, a lot of inventory must have been piled up, and that's why they must have pushed for that. I don't think that they will change this payment terms going forward, because it's something which is apparent not only for injectables, it's also all through for orals, topicals and so on and so forth.
Exports, as we are getting into more and more markets, initially the exports was mostly, I would say, advance or in 30 days. Since the channel partners are also increasing and we are helping them to invest and we are helping them, you know, expand their basket also, they also have started investing as in much more by keeping some sort of inventory for new products also. The export market also would normally go between around 45 days to 60 days, which was around 30 days. That another 15, 20 to 15, 30 days, thing would go up.
The domestic market is something which we have still maintained because normally the average payment cycle in the domestic market was around, ideally it was of course 21 days and 30 days, but we always, Gufic, maintained a 45-day cycle, and that 45-day cycle still continues to hold through. The domestic market on an average, if I take the averaging out of it, then it's a 45-day cycle which we look forward. Again, if you see in terms of number of days, we see the working cycle to be around these average days for these three different businesses. API is a very small part of our business, but still API itself also has normally domestically, 60 days and internationally around LC 60-75 days which normally get paid.
Average, we always see our payments between 60 to 90 days, and that's why we always have a revenue, you know, outstanding of around 75 days plus or minus on a 60 to 75 days plus or minus on a debtors point of view. These are my comments as a business point of view. I'll ask Roonghta sir to add if I've missed anything.
Thank you, sir. Basically, if you see the balance sheet of Bhushik for last September quarter as well as the March 2022 quarter, average our debtors is around between 87-92 days. According to 82-90 days, the average receivable is between 82-90 days. If you convert into amount, it will come from, if our turnover for a quarter is around INR 175 crores, INR 180 crores, then the receivable will be INR 175 crores plus 10% GST average, it will go to INR 200 crores. That is about our receivable. In case of our stock, we are having around one and a half month stock of raw material, around 1 month stock of WIP, around 35 days stock of finished goods, around seven-eight days stock of in transit.
There will be around Three, four months stock of raw material, finished goods and WIP. That also involve around working capital or inventory of around INR 135 crore-INR 150 crore, between INR 135 crore to INR 150 crore. That is the total working capital requirement at the moment.
Thank you. Okay. Sir, given this background?
Sorry to interrupt, sir. We request you to please return to the question queue for.
Sure. Thank you very much. Yeah.
We have the next question from the line of Aman Vij from Astute Investment Management. Please go ahead.
Yeah, good afternoon, Pranav Choksi. Just one request first and then question. Any reason we have not uploaded any presentation this time or any remark on the number of products which we keep launching and the update on that?
Yeah, good question. Actually, this input came last time from the last question. Since we are giving the presentation, and then we are repeating the same in the introductory call, if it like let's have only one avenue. This time we thought we'll just have the introductory call and give only the highlights which are important, and then we'll come with the Q&A. Not only you, but I have got some two, three people also say that at least let's keep the presentation intact, so that remains as a reference point, and then we can directly start the Q&A. We thought that. One more reason we were planning to have from next time only update in every six months just to keep that information being more valid, so we were looking that way too.
No other reason, it's just that based on the feedback, we took a call that it's much better than so. In order to have avoid redundancy, just keep a single channel of communication and information being out. No, no other reason.
Sure, sir. Finally, the two questions. The first question is on the Indore site. You talked about what utilization level we are targeting, and it will be a mix of domestic and CMO, at least for first one or two years, before we get the approval then move towards export. For the first year and second year, maybe even third year, if you can talk about what will be the likely mix of CMO versus domestic.
Very frankly, I think I would never say no to any CMO business. I don't know how the CMO business comes, but as per the efforts and as per the structural approach to CMO business going in case, we would still look at, like a 50/50% model going forward. Like I said, Sparsh and our own brands, would be there. We foresee that the Navsari infrastructure, keeping in mind the current registration which we have, would be completely utilized, and would be completely choker blocked by December or Jan 2023. We will need to have all, spillover business coming from Indore. More importantly, the current unit one which we have in Navsari, which was currently also catering to certain WHO, and PIC/S approved country.
Those also will be transitioning to unit two, which is a EU approved facility. We are planning to convert by once the Indore facility starts, the entire unit one will be converted into a dedicated, I would say hormone injectable block to, you know, spearhead our infertility business also. Navsari then would be Penem, would be hormone, and would be the EU GMP factory for general products, and then that will be complemented by Indore. I still feel I'm telling you right now 50/50. There might be instances that it might be 70/30 or, you know, 60/40 here and there, but this is the ratio what we foresee would start off with. We see spillover business from domestic business coming in and being taken care of, not only by Critical Care or Infertility, but also by Sparsh from Indore.
Just one clarification on this. Navsari you said will be converted to a fully hormone/injectable facility.
Unit one. I'm just repeating again, there's no ambiguity and no confusion. In Navsari we have three blocks. Apart from the API block, the three blocks are including the legacy factory of [Inaudible], which is unit one. Unit two is a EU approved facility which is approved in, of course, where the business of Germany and, what do you call, Portugal and U.K. and Canada and South Africa and all other, even India business is there. The third block is of course of the Penem block, which was commissioned in Q2 2023. I am right now talking about this unit one, which is a legacy block, which has been in part from a long time. When Indore will start coming in, we will have excess capacity for the general lyophilized liquid and ampoule things.
That gives us enough foray to convert the unit one into dedicated. I would not say, It's a dedicated block for infertility products like HCG, HMG and FSH. Because of a part of that block will be converted into the recombinant product also, which will be dedicated to recombinant FSH, which is again for infertility. That entire unit one, which is a legacy factory, will be converted into a infertility products manufacturing site.
What can be the peak, sales we can get from that unit one after the conversion?
I'll have to check on that exactly and get back to you. I will keep a note and hopefully, I think we'll get the details, and we'll share it with you in the future.
Sure, sure. For nine months, if you look at ex-COVID, if you remove the COVID portion, if you can talk about growth in our various divisions like Critical Care, Fertility Care, international business and API. The growth number, if you remove the COVID portion so that it is like to like comparison.
Again, I would say Critical Care would be flat. The reason would be very simple, because we have taken a majority of the return. Like I mentioned, we have taken more than INR 22 crores of return of last year and this year also. Most of the return would be owing to the Critical Care, and of course to some accessory division which we could not sell last year, which were kept in the channel keep, I mean, because the channel was keeping it equipped for the wave X and a wave Y, which never came. If I consider the net of that return, then it would be a flat revenue.
I foresee that with Ceftazidime and Avibactam coming up, and if I compare then on a 12-month basis, like there would be definitely some 3%-4% growth in the Critical Care division. On the net sales this year versus the last year sales ex of, I mean, removing the COVID products, and that would be the numbers then. Infertility and healthcare are two divisions which have taken the major growth this year. Even though our contract manufacturing has reduced, the three divisions which are doing considerably well are healthcare, followed by... Sorry. Healthcare, followed by Ferticare, and then followed by exports, which are growing in more than double digits, and they are riding the wave and taking it forward. Healthcare has done its 100% achievement. They are still delivering 100% achievement.
We are now almost on an 18% growth. Fertility is delivered on a higher growth, that would be also because of some new products like [Inaudible] , what we have added up. That would be close to around 23%-25%. I'm saying on a year-on-year basis. We have to factor in mind that last year in fertility, also during COVID, we sold some Enoxaparin , which were part of infertility, but was something which was, you know, due to the COVID. If I remove that, we'll be more than 35%-40%. If I remove, if I compare infertility this year with last year, removing the COVID products.
Third, exports is something which is growing, much more, but the base is so small that even though it's growing by double digits, yeah, that field is not being paid. Of course, I forgot to mention, Stenox is the fourth one. Stenox is something which is also growing much faster, much, higher. Again, the base is too small for it to have a relevance on the total revenue of the company. These are the four things which are driving the growth this year.
Sure. I have more questions, but I'll get back in the queue. Thank you.
Sure.
Thank you. The next question is from the line of Runjhun Jain from HGIPL. Please go ahead.
Hello. My question is regarding the geographical split. Currently, the major business is in India. What are in the medium term would be that the company has planned to cater the international markets also?
If I understood your question right, you would like us to talk about the geographical breakup of our revenue. Is that right?
Yeah. Geographical split, yeah. Current and what could be in the future.
Okay. Firstly, we divide our business into India and export. Exports maybe are further the country which is leading the growth for us would be Germany, followed by, you know, Colombia, followed by Sri Lanka. I mean, I can go into individual countries, but I mean, I'm just telling you in a nutshell these are three there. Going forward, we are getting more aggressive into EU. We just got approval of U.K., I think, I believe in the third quarter. We have filed in some tenders there. We should see markets like U.K. and Portugal, which is already an existing market for us, also start catering much more.
This year we will be finally because after COVID, we've got enough time to work on certain more dossiers which we have worked on this year, and we will be filing dossiers in around four more European countries, namely, Spain, France, Italy and Netherlands. Those would be catering going forward much more. Southeast Asia as a whole also is now coming at positioning three. Europe is first, and then followed by South America, and then followed by Southeast Asia. In Southeast Asia, we also include countries like, you know, Sri Lanka and Myanmar and Philippines and whatever, because they also. Even though they're part of South Asia, we consider that part of the Southeast Asia as strategic business unit. These markets also now are expanding in terms of our growth going forward.
India would still, of course, cater to a majority. When I mean majority, it would be around, I believe a 70%+ revenue in terms of formulations. Going forward also we foresee, as I've always mentioned all these years, India would be a strategic market for us going forward in terms of our growth. India followed by these other countries coming in, we would maintain the ratio. Even now with Indore coming in, I foresee the ratio to fall to 65, 35 or maybe 60, 40, not below that, though India will still be one of the growth stories going forward.
Okay. Thank you so much.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to Miss Ami Shah for closing comments. Over to you, ma'am.
Thank you. Thank you everybody for joining this call. I hope all your questions and queries are satisfactorily answered by us. In case if there are any further questions that have been remained unanswered, you can reach out to us or Mr. Avik Das from SGA and Investor Relation Partners. Thank you once again. Hope to reconnect in the next investor call.
Thank you. On behalf of Gufic Biosciences Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.