Please note that this conference is being recorded. I now hand the conference over to Ms. Prachi from Orient Capital. Thank you, and over to you, ma'am.
Thank you, Manu. On behalf of Granules India Limited, I extend a warm welcome to all the participants on Q3 and nine-month FY 2025 financial result discussion call. Today on the call, we have Dr. Krishna Prasad, Chairman and Managing Director; Dr. KVS Ramr ao, Joint Managing Director and Chief Executive Officer; Ms. Priyanka Chigurupati, Executive Director; and Mr. Mukesh Surana, Chief Financial Officer. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs, opinions, and expectations as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Dr. Prasad for his opening comments. Over to you, sir. Thank you.
Thank you, Prachi. A very good evening, ladies and gentlemen, and thank you very much for joining us on our Q3 FY 2025 earnings call. We appreciate your continued interest in Granules. We have uploaded a detailed presentation of our quarterly performance on our website, and I trust you have had a chance to review it. As many of you know, the U.S. FDA conducted an inspection of our Gagillapur facility from August 26th to September 6th, resulting in six Form 483 observations. The FDA has determined the classification of the inspection as official action indicated. Granules has undertaken a proactive, voluntary, and comprehensive remediation plan to address observations raised by the U.S. FDA. Following the inspection, we voluntarily paused manufacturing and distribution in September to conduct a thorough risk assessment, ensuring that no product contamination or patient safety concerns.
Operations and dispatches have since resumed in October following this assurance while maintaining full transparency with the FDA throughout the process. Our voluntary remediation plan encompasses comprehensive corrective and preventive action, independent third-party oversight, ongoing product testing for risk assessment, and regular monthly progress updates to the U.S. FDA. The plan is structured around three key focus areas. First, demonstrating a thorough understanding of identified issues by implementing appropriate CAPAs. Second, ensuring the effectiveness of closed CAPAs through rigorous metrics-based evaluations. And third, mitigating risks by implementing interim controls for all ongoing activities related to open CAPAs. To date, 90% of CAPAs have been completed, with the remaining ones on track for closure by March 25. To help us with this process, we have engaged multiple third-party consultants and experts who are working closely with our team on the ground.
We are in constant touch and engaged with the U.S. FDA to present our progress on the corrective measures and request a potential reinspection. Following our initial response to the FDA on 28 September, we have shared three monthly status update reports with the agency on 28 October, 26 November, and 26 December, communicating the progress on implementation of corrective measures that we have put in place. Our fourth monthly update will go out before the end of January. We are also making a systemic change in the quality and compliance culture across the organization, including at Gagillapur. These are directed towards infrastructure improvements, capability building, automation, process changes, and inculcating a quality mindset that is in sync with the ever-evolving regulatory expectations. We are maintaining continuous communication with our customers and have had several visits and on-site meetings with our top customers.
These interactions have been highly positive, allowing us to transparently share our progress on corrective actions being taken at the site. As part of our ongoing efforts to strengthen leadership in quality and manufacturing, the quality function and leadership, Dr. Rajesh Kapoor has been appointed as Global Head of Quality at Granules. He was earlier Head of Quality for our North American operations. On the manufacturing side, Ramraj Rangarajalu has joined us back as new Head of Formulation Operations for India sites. Ramraj, in his previous stint, was Head of Gagillapur plant. The OAI classification does not impact the ongoing manufacturing, distribution, or sale of existing products from the site. However, it may impact review of pending submissions for approval of new products until the status is resolved.
Granules Group's trajectory remains robust and diversified, underscoring that our strategy is not solely dependent on new product approvals from the Gagillapur sites. Key drivers include new launches from our GPI facility in the U.S., growth from large volume products in the U.S. and Europe, capacity addition and commercialization of greenfield formulation facility at Genome Valley, value chain advancements in Europe, and our expanding oncology pipeline from Unit 5 in Vizag. As we look ahead, our near-term growth will be driven by new product launches from our GPI site for the U.S. markets, especially the CNS ADHD segment. During the last quarter, we had received U.S. FDA approval for Lisdexamfetamine chewable tablets, and a few other exciting products are under approval, which we expect to come through in the near future. Our new formulation facility at Genome Valley under Granules Life Sciences is progressing well.
Phase I, with a capacity of 2.5 billion doses, has been commissioned, and commercial dispatches of monograph products have commenced. We are targeting prescription product commercialization for Europe in March or April. Phase II, with an additional 7.5 billion dose capacity, is expected to be commissioned by Q4 of FY 2025, with validation activities slated to begin in Q1 FY 2026. To summarize, we are prioritizing the enhancement of quality and compliance across the organization while actively pursuing our growth objectives. These include new launches from our GPI facility, expanding our formulations capacity at GLS, and investing in R&D to support our portfolio expansion in the long term. I request Dr. Ram Rao to provide further insights on some of these initiatives.
Thank you, Chairman. Good evening, ladies and gentlemen. Building a robust and a diverse product portfolio has been a focus for Granules, forming the cornerstone of the company's growth strategy in the last couple of years. We have been steadily advancing towards our R&D objectives with each passing quarter. We have been consistently growing our product portfolio. Today, Granules has 83 ANDAs in the U.S., with 15 ANDAs awaiting approval, 12 applications in Europe with 4 awaiting approval, and 15 applications in the rest of the world with 8 awaiting approval. Additionally, we have received approval for 2 of our formulation products in the U.S. in the last quarter. We are actively expanding our therapeutic and product portfolio by submitting new filings in areas such as CNS, oncology, and anti-diabetic segments, while also pursuing market expansion for our existing products.
This past quarter, Granules R&D spend was close to INR 87 crores, another testament to our commitment to continuous innovation. Following other areas of primary focus for growth in the portfolio, ADHD, based out of Chantilly, presently in the USA, we are developing medicines to address one of the fastest-growing therapeutic segments and health concerns in the U.S. and world today. The global ADHD market is projected to grow from $15.8 billion in 2023 to $24.6 billion in 2032. Increasing ADHD diagnosis advancements in diagnostic tools and the continuous development of innovative treatments is driving this growth. Despite being rapidly growing therapeutic segments, patients in the U.S. frequently face shortages of ADHD medications. A combination of the above factors makes ADHD an attractive therapeutic area for Granules.
We have been developing a very robust ADHD portfolio with 10 products in pipeline for development, which includes first-to-file, Day 1, and regular launch opportunities. We also have five to six ADHD products commercialized in the U.S. and have obtained approval for Lisdexamfetamine chewable tablets in December 2024. Overall, Granules' ADHD portfolio is designed to address the majority of the U.S. ADHD market. Oncology therapy is another focus area for Granules, and we are making substantial strides into our oncology portfolio. We continue to expand our oncology portfolio with seven to eight products currently under development, which includes NCE opportunities and the Day 1 opportunity products. Our state-of-the-art infrastructure for both API and finished dosage form in oncology, combined with strategically curated portfolio in the near term that have high market entry barriers, positions us to become a significant player in this segment.
Diabetes treatment is another cornerstone of our portfolio. We are currently working on eight to nine diabetic medication portfolio and anticipate submitting several of them for approval in the upcoming quarters. Biocatalysis is a focus area for our R&D. We are developing a couple of products using this technology. Process validation of the first API with this technology is set to be completed in the current financial year, followed by two more products in the subsequent quarters. We continue to develop these products with an eye on sustainability and global regulations. It's great to report that we have stayed consistently dedicated to executing our R&D strategy and building a strong portfolio for the future. Thank you all, and over to you, Mukesh.
Thank you, CMD and JMD. Let me take you all through the top financial parameters now. Revenue, the third quarter revenue was INR 11,377 million as compared to INR 11,556 million in Q3 FY 2024, with a decline of 2% and revenue improved by 18% as compared to Q2 FY 2025. The sales breakup as per business division geographic region are presented in our investor presentation, which is available on the website. Gross margin, our gross margin as a percentage of sales for Q3 FY 2025 was 61.7% as compared to 57% in Q3 FY 2024. Gross margin as compared to Q3 FY 2024 is up by 474 basis points achieved on account of profitable sales growth of finished dosages.
Gross margin as a percentage of sales for Q3 FY 2025 is down by 20 basis points from Q2 FY 2025. We sustained higher sales quarter on quarter and prioritized sales of high margin within the finished dosages. EBITDA and EBITDA margin, EBITDA for the quarter was INR 2,303 million, that is 20.2% of sales as compared to INR 2,505 million, that is 21.7% of sales in Q3 FY 2024, a decrease of 144 basis points from Q3 FY 2024. EBITDA as a percentage of sales for Q3 FY 2025 is down by 80 basis points from Q2 FY 2025 on account of airfreight, failure to supply, and professional expenses that have gone up on account of the recent US FDA inspection at the Gagillapur facility.
R&D, our R&D spend for the quarter was INR 568 million as compared to INR 468 million in Q3 FY 2024 and INR 524 million in Q2 FY 2025. Net debt, our net debt was INR 8,289 million as compared to INR 7,973 million in Q2 FY 2025. Our net debt was INR 8,421 million at the end of March 2024. Cash to cash cycle. Our cash to cash cycle was 213 days in the current quarter, which is same as Q2 FY 2025. Cash flow from operations.
Cash flow from operations for the quarter was INR 1,315 million as compared to INR 1,880 million in Q3 FY 2024 and INR 2,007 million in Q2 FY 2025. With the sequential quarter sales growth, receivables have gone up. Our DSO remained at 76 days as compared to Q2 FY 2025 of 73 days. CapEx. CapEx spent during the quarter was INR 1,335 million as primarily invested in Granules Life Sciences of INR 940 million. At a YTD level, we spent INR 4,102 million for CapEx, primarily invested in Granules Life Sciences of INR 2,425 million. ROC. ROC for Q3 FY 2025 is 16.4% as compared to 16.9% in Q2 FY 2025 and 15.3% in Q3 FY 2024. With this, I open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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'll wait for a moment while the question queue assembles. We have a first question from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Thanks for the opportunity. Sir, with almost 90% remediation work implemented and new approvals for launches expected, could you just guide us in terms of Granules and FY 2025 in terms of revenue growth and EBITDA margin?
Tushar, the remediation is going on, like I said in my opening remarks. We have voluntarily taken a lot of steps for remediation. We have consultants looking at last two years' reports of investigations and all just to give confidence to others and the FDA that everything has been good in the organization and even ongoing investigations also they will be taken care of. So much work is happening, and now it all depends. If everything is status quo and it is OAI, we will not get approvals till that is clear, new approvals. So the growth has to come from existing products, increase in market in Europe and other places, and mainly from the U.S. operations and production from GLS.
So we cannot put a number today, but definitely when you see CAGR, we will continue to maintain it even though there are blips for CAGR, will definitely be around 20%+ . So that's all I can guide on the growth today.
Understood. And for the quarter, there has been a sharp uptick for Europe sales. Anything you'd want to comment on that?
You said uptick? Did you say that?
Quarter on quarter, there has been a sharp jump in the Europe sales.
Quarter on quarter, there's been a jump, but because that reason is, last quarter was actually a dip. So if you see Europe on a continuing basis, Europe is not doing that great. It's also a factor of capacity. Our capacity is not infinite until we have the new GLS plant running. This will continue, and we continue to allocate most of our capacity to the U.S.. So if you see the U.S. growth rate and the growth in Europe, you can see the connection. Overall, there's no great growth in Europe. That's all I can tell you.
Lastly, while this has slightly impacted the EBITDA margin for the quarter, but if you would like to call out what kind of cost has gone in terms of remediation measures, which is sort of not recurring in nature?
Cost has not only gone up on remediation, Tushar. There was a lot of due to disruption of supply. There was a lot of material that has to be airlifted. That has drastically added to the cost, and of course, remediation cost has been there, and few other expenses which are not in regular line have happened in this quarter, and I won't say this is one-off for this quarter. Some of these things will happen in next quarter too, though they will be at a much reduced level.
Understood. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Rashmi Shetty from Dolat Capital. Please go ahead.
Yeah, thank you for the opportunity. So just a follow-up from the earlier participant. You mentioned in your presentation that your expenses during the quarter have gone up due to the professional fees and related to the remediation activity and some FTS expenses also. So if you can quantify that number, what was the cost related to the failure to supply? And that penalty is going to recur in next two to three quarters, or you feel this is one-off in third quarter only? And remediation cost, how much is something which is recurring in nature in the next subsequent quarters?
Sure, Rashmi, so we have incurred consultancy fees failure to supply, and also there was increase in airfreight. Some we could recover from customers, some we could not. All put together, I would say it would be close to $3 million, and some of this may not repeat fully in quarter four. There will be a reduction in this number in quarter four.
Okay. So out of $3 million, which you are saying that has been expended in this quarter, how much is something which would be recurred? I mean, is it like 25%, 50% of this amount would recur in the quarter four? To model in our numbers, we would want to know that.
So it would be a little above 50%, I would say, it's a judgment as of now.
Okay. Understood. That's really helpful. And on the U.S. FDA inspection part, when you're communicating with the agency, anything which you can gauge that the inspection can happen soon, or you feel that currently only the timely updates will happen? Anything which you can gauge from them?
We are updating them, Rashmi, regularly on the work that is happening here, which is very positive. But we are planning to request them for a reinspection. We don't know when they'll give us an appointment and when they will come back. It all depends. So as of today, we cannot put any dates on that.
Okay. So the four to five product launches which were expected in FY 2025 second half, will that happen from other facility, or we believe that probably now that will get delayed to next year or till the time it is settled?
So this could get delayed to last quarter or third quarter. But definitely, these products shifting to other sites, if we start filing those from the other site, it could take into first quarter of next fiscal. I mean, I'm talking of 2027.
Okay, so net-net to say that at least two quarters time.
There would be some loss in sales because of the new launches.
No, but Rashmi, to complete that answer, we have still about four to five launches from the GPI sites that are planned for Q4, which will go on as planned. And from that, about two products are new approvals, one of which we've already received, and three products are from old products that we've already received approvals for, but we'll be launching officially in Q4.
Understood. So those four to five products will go on?
Yes.
Okay. And related to your API business, what is the update over there? We were seeing some sort of price erosion. Even the demand scenario was weak because of the inventory level at the customer. But we expected that probably prices will recover in second half. And also, there would be some inventory which would get over. So API growth could improve. So what is the update on that for this end of year? Also, if you can update related to FY 2026?
Do you want to take that, or shall I?
Sure. No, I'll take one half of the question for sure. So the API prices, I'm assuming you're referring to paracetamol prices, and in general, they have certainly gone up a little bit and have stabilized right now at a new base. And going forward, I do expect it to go up from here. And regarding the rest of the API prices, I wouldn't necessarily say there's too much of a change either way in any of the prices overall.
In terms of inventory, so again, all other inventory situation is fine, but with paracetamol, there still is a situation of high stocking because, I mean, stocking because customers did take some additional product because of the Red Sea issues on top of the past inventory that they were sitting on. So again, right now, we see projections for FY 2026 to be pretty good, but Q4 FY 2025 will still be pretty flat. But FY 2026 looks good for now.
Okay. Got it. Got it. Thank you. That's it from my side.
Thank you. We have our next question from the line of Darshan Jhaveri from Crown Capital. Please go ahead.
Hello. Good evening. Thank you so much for taking my question. Some of my questions have been answered. So I think the first participant asked about the growth, and I think sir said we are targeting a CAGR of 20%+ . Is that fair for FY 2026? Have I heard that correctly, sir?
No, no, no. You want to answer that, Mukesh ?
Yeah. So in the long run, is what he was trying to say, not quarter- on- quarter. In the long run, we are expecting to achieve 20%+ CAGR in the long run.
Oh, okay. Okay. Fair enough. Fair enough. And so in the short term, how do we see FY 2026 planning out in terms of our revenue? Because we have some issues. We can't launch fully all the products that we want. So how much will be able to maintain the current pace, quarterly run rate, or how would it go about, sir?
2026 will definitely be a lot better than 2025, Darshan. This will be aided by GLS, where we are likely to have a European inspection very early next fiscal. So that will help us to start the European business, and the momentum of business will go on. We expect very positive growth in next year. Maybe we are looking at something like a 20% growth next year.
Oh, okay. Fair. That helps a lot, sir. And so margins, we had some non-recurring expenses, as you've said. So a 20%-22% margin range, that's also a fair assumption, sir?
Yes, definitely. Very much. You see, our gross margins are only improving, but some of these one-off expenses have been eating into that.
Yeah, yeah. Correct. Correct. Correct, sir. And so just wanted to know any potential implications of the Trump presidency that we can expect. Even we have some facilities in the U.S. also. So any so what do you see as the political? Is there something that can maybe hurt us or can be a gain for us? Anything on that sort of, sir?
I mean, this administration could be a little, I mean, unpredictable. We cannot say. But overall, this administration is industry-friendly. So I personally think there could be a lot of positivity that can happen to the pharma industry from this administration. And we having a facility in the U.S. also definitely will help.
Oh, okay. Fair enough, sir. And so just last on my end, sir. So every day, we are continuously updating them. So any rough timeline, nothing that we can hold on to you, but in your experience, how much timeline? It can be maybe a few months or maybe a quarter or two. What do you feel, sir? And when will they come back for an inspection, and how would it go on, sir? Just any timeline that you could like to give, sir.
Nothing specific? [audio distortion] will also do.
It's very difficult to fix a timeline, but we are going to request them for a meeting anytime from next month onward. Let's see what happens. Maybe within a quarter, I'm sure they would definitely visit us.
Oh, okay. Okay. Fair enough, sir. Yeah, that's it from my side, sir. All the best. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Abhishek Pipara from ICICI Bank. Please go ahead.
This is in relation to the.
Sorry to interrupt, sir. Can you please use your handset and be a little louder?
Hello. This is in relation to the CapEx expenses and which is expected in FY 2026. So can we just know what is the CapEx we are planning in FY 2026?
See, some of the CapExes, there is some carry forward also of the current year plan. So we are estimating as of now, we have not yet done the budgeting exercise, but anywhere between 500 or 600.
Okay. And so, in the recent past, there has been a year's observation. So, what would have been the contribution from the Gagillapur plant which has been affected, and what is the decline we are expecting in the current year from this?
We expect that revenues will not decline anymore. This quarter, they could have declined because we took a pause in production. We expect that we will continue with Q1 numbers from this side and possibly improve a little bit because some of the new launches are taking off. The sales are improving.
Sir, what is the overall contribution in the top line from the Gagillapur plant in a financial year?
Sorry? Come on.
Top line from the Gagillapur plant. Percentage.
Yeah. It is in the range of 60%+ , 60%-65% on overall total consolidation.
Okay, sir. Okay, sir. Thank you.
Thank you. Reminder to all participants, if you wish to ask a question, you may press star and one. We have our next question from the line of Sahil Vora from MNS Assets. Please go ahead.
Hello. Good afternoon.
Good afternoon.
Am I audible?
Yes, sir, Mr. Vora. You are.
Yeah. My first question is, is Granules planning to participate in the GLP-1 market, given its growing significance in the pharmaceutical landscape?
Yes, Mr. Vora. This is a market which no company should neglect. Such a huge opportunity, and everybody should aim for a piece of that big pie. We are definitely looking at it, and possibly you'll hear from us in the future quarters on what we are doing.
Okay. Thank you for the update. My next question is, with the finished dosages contributing 76% of revenues, what is the outlook for this segment, and are there plans to diversify revenue streams further?
FDs has always been the ultimate target, and the reason we make, even though we were selling a lot of APIs and PFIs, our target was to convert the PFI business into FDs, so that we have been achieving, and focus will be totally on FDs. While we need the APIs and PFIs to feed into our FDs, so all these will be for in-house consumption. We do make a lot of APIs today, but they're all going to internal consumption, and regarding diversification, if I got your question right, we are looking at various new APIs, again, based on the FDs which we have filed. And also, we possibly will be you'll be hearing from us about our foray into a few different dosage forms in the coming quarters.
Got it, sir. Thank you, and all the very best.
Thank you.
We have our next question from the line of [audio distortion] from EIP. Please go ahead.
Yeah. Got two quick questions. The first one is, even in Q2, near investor presentation, I couldn't see a balance sheet there. If you can give a balance sheet, that will be great. You don't need to give it on the third quarter, etc., but it will be greatly helpful. That's the first one. Second is, every year, you just mentioned that you probably have around closer to 500 gross CapEx in FY 2026. Did I hear right?
Yeah.
Yeah. That's the case. You have been doing your investment. The CapEx also has been increasing, or rather, on the higher side at every point of time. Good. But my question really is, when do you start to see your cash flows going to keep funding your CapEx and your debt continue to reduce?
Yeah. I would like to clarify, so our investor presentation has all the balance sheet key parameters in Slide number 8, where we cover the fixed asset turn, net debt, CCC days, cash flow, CapEx, and ROC. So probably you can refer that. And also, detailed balance sheet is anyway uploaded. With respect to the 500 CapEx, as I have clarified, it is as of now. I'm just giving an estimate because the budgetary exercise is still under process. And the third question is, with respect to cash flow generation, if you see with the significant increase in CapEx, we have net debt has still not gone up. And we are building this CapEx. One important CapEx which we are building is on the Granules Life Sciences, which is an additional 10 billion capacity, which has already started commercialization to the extent of 2.5 billion.
The run rate of INR 2.5 billion, we will see it soon, and also, the next [audio distortion] also will happen, so it's a matter of two, three years, so the CapEx, whatever we have spent, is going to give returns in the next two, three years, so the cash flow as such is managed well. We are not taking additional borrowings.
No, I appreciate that point. My only point was, yes, you are generating cash. You are generating. But when are we going to see rundown in your net debt? That was the only question. I take your point on slide 8. I can see that. But it would have been much easier if the net debt balance sheet also is given. So you've got a P&L. You've got a lot of those things in debt are given. So that was the suggestion. That's it. Thank you.
Thank you. We have our next question from the line of [audio distortion] from Fidelity. Please go ahead.
Yeah. Hi. Good evening. Thank you so much for your time once again. I just had one question. Basically, for our Gagillapur site, it has an OAI classification. I just wanted to check my very basic understanding that generally, OAI is followed by either a warning letter or an import alert. So do we expect that final classification to come in very soon, or is it already? I don't know. How does it usually work? Am I missing something? Or is it stays at OAI without either of these coming out, or how does that work?
In the worst case in an OAI, of course, is the import alert, but in the interim is the warning letter. We definitely were pretty, pretty confident based on our conversations with our consultants that the import alert is a very, very remote possibility. The warning letter is a possibility, though we feel and they feel confident that it may not happen. The best-case scenario is they keep it as OAI, come back and inspect us. That I answered a little while ago. It could happen in a quarter or so, possibly.
Okay. So basically, so this is again a basic question. So it can just stay at an OAI without going into either warning letter or import alert. So it can get resolved there itself.
Yeah. They may want to come back for an inspection, and there's an intermittent letter they give. I don't know the exact name of the letter. That letter will say, "We will come and inspect you." So that could happen.
Okay. Okay. And given that the inspection was in September, August or September, so generally, the reinspection, what's the earliest from sort of is it like one year that they come back, or it could be even faster than that? Any sense that there would be?
It depends. If our responses are good and if FDA is convinced that we are doing a good job, they'll definitely come back earlier.
Okay. All right. Okay. Thank you so much.
Thank you.
Thank you. We have our next question from the line of Rashmi Shetty from Dolat Capital. Please go ahead.
Yeah. Thanks for the opportunity again. Just one question. If you can call out your total gross borrowings, not net, total gross borrowings and your average cost of debt.
See, the gross debt is INR 1,025 crores.
Okay.
Okay. And the cost of borrowing has a mix of PCFC, term loan, and also different banks. So if I have to say, largely, we borrow in PCFC and USD borrowing. So the spread ranges from 0.2-0.7 range for working capital. And for long-term loan, it is also 100 basis point-150 basis point kind of a range. And then, obviously, there's via IFRS accounting of INR equivalent cost, which goes into the interest cost. It's foreign currency borrowing.
Understood. Okay. Okay. Thank you.
Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one. We have our next question from the line of Mamta Agarwal from ABS Investments. Please go ahead.
Hello. Thank you for the opportunity. Am I audible?
Yes, Mamta. You are.
So my question is, can you share details about the greenfield formulation expansion at the GLS and elaborate more on contribution to future revenue?
This capacity, Mamta, is going to be about 10 billion capacity. 2.5 billion is already online in one phase, and since we do not have an FDA inspection or a European inspection so far, we are producing U.S. monograph products for the U.S., and we're shipping them out today, and we are expecting a European inspection late March or early April, and after that inspection, within a few months, we expect to start shipping for Europe, and later on, Europe doesn't need any filings, it can be a separate process, and U.S. inspection, we have already done some filings, and we expect we don't know, it could be six months, nine months, whatever. We're trying to push them. We'll see what happens, but meanwhile, European sales and U.S. monograph sales will continue to happen from that side.
Okay. Okay. Fair enough. So my follow-up question is, what is the company's focus on launching new products or entering untapped therapeutic areas in the near term?
Untapped on Granules side, different dosage forms we are working on. And therapeutic areas, as you know, everybody now is into diabetes, weight loss segments, GLP-1s. So we will definitely be looking at that. And like I said, you will hear from us in the next few quarters.
Yeah.
For therapeutic segments, we are focusing on diabetes, like Dr. Ram Rao said, CNS segments. Some of the segments we are focusing on. But beyond that, we are looking at different things.
Okay. Thank you, sir.
Thank you.
Thank you. We have our next question from the line of Harith Ahamed from Avendus Spark. Please go ahead.
Thanks for the opportunity. What was the R&D spend for the quarter? I couldn't find it in the presentation.
Yeah. So I had called it out. It was INR 568 million for the current quarter.
Okay. You mentioned there was an increase in receivables during the quarter. So if you could share the current debtor days, and the increase was related to which market, if you can throw some color on that.
[audio distortion] in my CFO's page, it is in the same level. Currently, it is 76 days, and last quarter, it was 73 days. So it is largely because of increase in sales in the Q3 sequentially, Q2 to Q3.
Okay. That's all from my side. Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Once again, thank you very much, ladies and gentlemen, for attending this call and your continued interest in Granules India. So I just wish you a great weekend and a happy Republic Day. Thank you very much.
Thank you. On behalf of Orient Capital, that concludes this call. Thank you for joining us, and you may now disconnect your lines.