Granules India Limited (532482) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q3 and 9 Months FY '25 Earnings Conference Call of Granules India Limited. [Operator Instructions] 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 9 months FY '25 financial result discussion call. Today on the call, we have Dr. Krishna Prasad, Chairman and Managing Director; Dr. KVS Ram Rao, Joint Managing Director and Chief Executive Officer; Mr. 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, opinion 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 '25 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 finished dosage facility from August 26 to September 6, resulting in 6 Form 483 observations. The FDA has determined the classification of the inspection as official action initiated. 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 more product contamination -- or there are no product contamination or patient safety concerns. Operations and dispatches have since resumed in October following these events, while maintaining full transparency with the FDA throughout the process. Our voluntary remediation plan encompasses comprehensive corrective and preventive actions, 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 close [ CAPAs ] through rigorous metrics and metrics-based evaluations; and third, mitigating risks by implementing interim controls for all ongoing activities related to open [ CAPA ]. 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 28th September, we have shared 3 monthly status report -- update reports with the agency on 20th October, 26th November and 26th 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, which 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, and I think as 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 Kapur has been appointed as Global Head of Quality at Granules. He was already, a head of quality for our North American operations. On the manufacturing side, [ Ramraj Sangarajula ] has joined us back as new Head of Formula Operations for India sites. Ramraj, in his previous stints, 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' growth trajectory remains robust and diversified, underscoring that our strategy is not solely dependent on new product approvals from the Gagillapur site. Key drivers include new launches from our API ability 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 Visak.. We are looking ahead -- as we look ahead, our near-term growth will be driven by new branches from our GPI site for the U.S. market, especially the CMS ADHD segment. During the last quarter, we had received [indiscernible] U.S. FDA approval for lisdexamphetamine chewable tablets and few other exciting products are under approval, which we expect to come through in the near future. Our new formulary facility at Genome Valley under Granules Life Sciences is progressing well. Phase I with the 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 '25, with validation activities slated to begin in Q1 FY '26. 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 the 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 in each passing quarter. We are 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 rest of the world with 8 awaiting approval. Additionally, we have received approval for two of our formulation products in the U.S. in the last quarter. We are actually expanding our therapeutic and product portfolio by submitting new [ filings ] in areas such as CMS oncology and antidiabetic 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. On the following [indiscernible] areas of primary focus for growth in the portfolio, ADHD [indiscernible] Chantilly facility in the U.S. We are developing medicines to adjust 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 INR 15.8 billion in '23 to INR 24.6 billion in 2032. Increasing ADHD diagnosis, advancement in diagnostic tool, the continuous development of innovative treatments is driving this growth. Despite being rapidly growing therapeutic segment, patients in the U.S. frequently face shortages of ADHD medications. A combination of the above impacting factors make ADHD 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, NCE ] and regular launch opportunities. We also have 5 to 6 ADHD products commercialized in the U.S. and have obtained approval with lisdexamphetamine chewable tablets in December 2024. Overall, Granules ADHD portfolio is designed to address 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 7 to 8 products currently under development, which includes and seeing opportunities and the day 1 opportunity products. Our state-of-the-art infrastructure for both API and finished dosage 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 8 to 9 diabetic medication portfolio and anticipate submitting several of them for approval in the upcoming quarters. [ Biopharmaceutics ] is a focus area for our R&D. We are developing our products using this technology, process validation of the first API of this segment is set to be completed in the current financial year, followed by two more products in the subsequent quarters. We continue to develop this products with an eye on sustainability and global [indiscernible]. 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 Chairman. Let me take you all through the top financial parameters now. Revenue, the third quarter revenue were INR 11,377 million as compared to INR 11,556 million in Q3 FY '24, with a decline of 2% and revenue improved by 18% as compared to Q2 FY '25. The sales breakup as per business division, geographic regions are presented in our investor presentation, which is available on the website. Gross margins. Our gross margin as a percentage of sales for Q3 FY '25 was 61.7% as compared to 57% in Q3 FY '24. Gross margin as compared to Q3 FY '24 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 '25 is down by 20 basis points from FY '25. We sustained higher sales quarter-on-quarter and prioritized sales of higher 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 '24, a decrease of 144 basis points from Q3 FY '24. EBITDA as a percentage of sales for Q3 FY '25 is down by 80 basis points from Q2 FY '25 on account of [indiscernible], failure to supply and professional expenses that have gone up on account of the recent U.S. 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 of '24 and INR 524 million in Q2 FY '25. Next, our net debt was INR 8,289 million as compared to INR 7,973 million in Q2 FY '25. Our net debt was INR 421 million at the end of March '24. Cash-to-cash cycle. Our cash-to-cash cycle was 213 days in the current quarter, which is same as Q2 FY '25. Cash flow from operations. Cash flow from operations for the quarter was INR 1,315 million as compared to INR 1,818 million in Q3 of '24, and INR 2,007 million in Q2 FY '25. With the sequential quarter sales growth, receivables have gone up. Our DSO remained at 76 days as compared to Q2 FY '25 of 73 days. CapEx spend during the quarter was INR 1,335 million as primarily invested in Granules licenses of INR 540 million. At a YTD level, we spent INR 4,102 million primarily invested in Granules Life Science of INR 2,425 million. ROC. ROC for Q3 FY '25 is 16.4% as compared to 16.9% in Q2 FY '25 at 15.3% in Q3 FY '24. With this, I open the floor for questions.

[Operator Instructions] We have a first question from the line of Tushar Manudhane from Motilal Oswal Financial Services.

Sir, with almost 90% remediation of incremented and new approvals or launches expected, could you just guide us in terms of revenue in FY '25 in terms of revenue growth and EBITDA margin?

The remediation is going on, like I said in my opening remarks. They have voluntarily taken a lot for steps for remediation. We have consultants looking at last 2 years reports of investigation and to just to give confidence to ourselves and the FDA that everything has been good in the organization. And given ongoing investigations also, they will be taken care of. So, so work is happening. And now it all depends. If everything is status quo, and it is OAI, we will not get approval since that is clear, new approval. So the growth has to come from existing products, increasing 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. So CAGR will definitely be around 20% plus. So that's all I can guide on the growth rate.

Understood. And for the quarter, there has been a sharp uptick for Europe sales. Anything you would you want to comment on that?

Did you say uptick, did you say that?

Quarter-on-quarter, there has been a sharp jump in the Europe sale?

Quarter-on-quarter, there has been a jump. But because that reason is last quarter was actually dip. So if you see Europe in a continuing basis, Europe is not doing that great, it is also a factor of capacity. Our capacity is not in finance until we have the new GLS plant running. This will continue. And we continue to allocate most of our capacity in U.S. So if you see the U.S. growth rate and the growth in Europe, you can see the connection. Overall, great growth in Europe. That's all I can tell you.

And lastly on like 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 a 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.

[Operator Instructions] The next question is from the line of Rashmi Shetty from Dolat Capital.

So just a follow-up from the earlier participant. You mentioned in your presentation that your expenses during the quarter has gone up due to the professional fees and related to the remediation activity and some SPS 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 2, 3 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 ad sites. 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 4. There will be a reduction in this number in quarter 4.

Okay. So out of $3 million, which you are saying that -- which has been expanded in this quarter, how much is something which would be record? I mean is it like 25%, 50% of this amount would record in the quarter? 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 give that the inspection can happen soon? Or you feel that currently, only the timely updates will happen? Anything which you can gauge from that.

We are updating them Rashmi, regularly on the work that is happening there and -- which is very positive. But we are planning to request them for the reinspection. We don't know when they'll give us an appointment and when they will come back. It all depends. As of today, we cannot put any dates on that.

Okay. So the four to five product launches, which were expected in FY '25, 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 am talking of '27.

Okay. So net-net, to say that at least 2 quarters' time...

There would be some loss in sales because of -- from the new launches.

No, 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 '26?

Priyanka, do you want to take that? Or Shall I?

Sure. I'll take one half of the question for sure. So the API prices, I'm assuming you're referring to [ paracetamol ] prices. They -- And in general, they have certainly gone up a little bit, but -- 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 any -- 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 stockage because they -- I mean stocking because they did -- 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 it -- we see projections for FY '26 to be pretty good. But Q4 FY '25 will still be pretty flat. But FY '26 looks good for now.

We have our next question from the line of Darshan Jhaveri from Crown Capital.

Some of my questions have been answered. So I know -- I think the first participant asked about the growth. I think sir said, we are targeting a CAGR of 20% plus. Is that fair like for FY '26? Is that -- have I heard that correctly, sir?

No, no, no, do you want to answer that question?

Yes. So in the long run is what you were trying to say, not quarter-on-quarter. In the long run, we are expecting to achieve 20% plus CAGR in the long run.

Okay. Okay. Fair enough. Fair enough. And so in the short term, like how do we see FY '26 planning out for in terms of like revenue? Because we have some -- we can't launch fully that -- all the products that we want. So how much will be able to maintain the current pace or quarterly run rate or how would it go, Sir?

'26 will definitely be a lot better than '25, Darshan, which will be aided by GLS where we are likely to have a European inspection early next -- very early next fiscal. So that will help us to start the European business and the monitor business will go on. We expect very positive growth in next year. And maybe we are looking at something like a 20% growth next year.

Okay. Fair. That's helpful, sir. And sir, margins like we had like some nonrecurring expenses, as you've said. So 20%, 22% margin range, that's also a fair assumption, sir?

Definitely, very much. If you see our gross margins are only improving, but some of these one-off expenses have been eating into that.

Yes, correct. Correct. Correct, sir. And sir, I just wanted to know like any potential implications of the Trump presidency that we can expect, like even like we have some facilities in U.S. also. So any like -- so what do you see as the political -- some -- is there like something that can maybe hurt us or can it be a gain for us? Anything on that sort of, sir?

I mean this administration could be a unpredictable, we cannot say. But overall, this administration is industry friendly. So we -- 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 U.S. also definitely will help.

Okay. Fair enough, sir. And sir, just last on my end sir. So FDA, we are continuously updating them. So any rough time line? Nothing that we can hold on to you, but in your experience, how much like time line, like it can be maybe a few months or maybe a quarter or two? Like what do you feel, sir, can -- so when will they come back for an inspection? And how would it go on? So just any time line that you could like to give, sir? Nothing specific, some range will also do?

It's very difficult to affix a time line, but we are planning to -- we're requesting -- we're going to request them for the meeting any time from 6 months onwards. And let's see what happens. Maybe within a quarter, I am sure, they would definitely visit us.

[Operator Instructions] The next question is from the line of Abhishek Piparia from ICICI Bank. [Operator Instructions]

This is in relation to the CapEx expenses and -- which is expected in FY '26. So can we just know, what is the CapEx we are planning in FY '26?

See, some of those CapEx, 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, anywhere between INR 500-odd crores.

Okay. And sir, in recent times, there has been U.S. FDA observations. So what would have been the contribution from the Gagillapur plant, which has been affected? And what is the decline you are expecting in the current year on this?

We expect that revenues wil not decline any more. 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. Their sales are improving.

And sir, what is the kind of overall contribution in the top line from the Gagillapur plant in a financial year?

Sorry, come again?

[indiscernible] percentage.

It is in the range of 60-plus percentage, 60 to 65 percentage on overall total consol sales.

[Operator Instructions] We have our next question from the line of [ Sahil Vora from M&S Assets ].

Am I audible?

Yes, Mr.Vora, you are.

Yes. My first question is, is Granules planning to participate in the GL-1 market, given it's growing significance in the pharmaceutical landscape?

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 will hear from us in future quarters on what we are doing.

Okay. 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?

FD's 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 API and PFI to feed into our FDs. So all these will be for in-house consumptions. So we do make a lot of APIs today, but they're all going into internal consumption. And regarding your diversification, if I got your question right, we are looking at various new APIs, again, based on the FD, 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.

We have our next question from the line of [ Shishankar Radhakrishnan ] from EIP.

Got two quick questions. The first one is, even in Q2 in your 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, et cetera, 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 INR 500 crores CapEx in FY '26. Did I hear right?

Yes.

Yes. If that's the case -- you have been doing your investment, the CapEx also has been increasing rather on the high side at every point of time. But my question really is when do you start to see your cash flows going to keep funding your CapEx and your debt continues to reduce?

Yes. I would like to clarify. Our investor presentation has all the balance sheet key parameters in Slide #8, where we cover the fixed asset turn net debt, CCC days, cash flow, CapEx and ROCE. So probably you can refer that. And also detailed balance sheet is anyway uploaded. With respect to the INR 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, our net debt has still not gone up. And we are building this CapEx. One important CapEx, which we are building is on the granular license, which is an additional INR 10 billion capacity, which has already started commercialization to the extent of INR 2.5 billion. The run rate of INR 2.5 billion, we will see it soon. And also the next INR 7.5 billion also will happen. So it's a matter of 2, 3 years. So the CapEx, whatever we have spent is going to give returns in the next 2, 3 years. So the cash flow as such is managed well. We are not taking additional borrowings.

No, I appreciate that. 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 entire balance sheet also is given. So you've got a P&L, you've got a lot of those things that are given. So that was a suggestion, that's it.

We have our next question from the line of Madhav from Fidelity.

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 that -- or is it like stays at OAI without either of these coming out? Or how does that work?

The worst case in an OAI, of course, is import alert, but intermittent is the warning letter. We definitely -- we are pretty confident based on our conversations with our consultants that import alert is a very, very remote possibility. And warning letter is a possibility, though we feel and they feel confident that it may not happen. And the best case scenario is to keep it as OAI come back and inspect us. And that I answered a little while ago, it could happen in a quarter or so possibly.

Okay. So basically, sir, just again, a basic question, so it can just stay at an OAI without going to either warning letter to import lots? Or it still gets resolved itself...

Yes, 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 our -- the inspection was in September -- August or September. So generally, the reinspection, what's the earliest from sort of -- is it like 1 year that they come back or it could be even faster than that? Any sense there would be...

It depends, like if our responses are good and the APA is convinced that we are doing a good job, they'll definitely come back earlier.

We have our next question from line of Rashmi Shetty from Dolat Capital.

Just one question. If you can call out your total gross borrowings, not net. Total gross borrowings and your cost of -- average cost of debt?

See, the gross debt is INR 1,025 crores. 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 spend ranges from 0.2 to 0.7 range for working capital. And for long-term loan, it is also 100 to 150 basis point kind of a range. And then obviously, there will be an IFRS accounting of INR equivalent cost, which goes into the interest cost. It's foreign currency borrowing.

[Operator Instructions]. We have our next question from the line of Mamta Agarwal from ABS Investments.

Sir my question is, can you share retails about the greenfield formulation expansion at the GLS? And elaborate more on contribution to future revenues?

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 from 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 6 months, 9 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. Sir, follow up question is, what is the company's focus on launching new products or entering untapped therapeutic areas in the near term?

Untapped -- our untapped from Granules side, different dosage forms, we are working on. And therapeutic areas, as you know, everybody now is into diabetes, weight loss segments, the GLP-1s. So we will definitely be looking at that. And like I said, you will hear from us in the next few quarters. The therapeutic segment, we are focusing on diabetes like the [indiscernible] said, CNA segments, some of the segments we are focusing on. But beyond that, we are looking at different things.

We have our next question from the line of Harith Ahamed from [ Avendus Spark ].

What was the R&D spend for the quarter? I couldn't find it in the presentation.

Yes. So I had called it out, it was INR 568 million for the current quarter.

Okay. And you mentioned there was an increase in receivables during the quarter. So we would share the current debtor days and this increase was related to which market? If you can throw some color on that.

The DSO deals that also written in my CFO speech. It is in the same level. Currently, it is 76 days and last quarter, it was 73 days. So it has largely because of the increase in sales in the Q3, sequentially, Q2 to Q3.

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 the 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 lines.