OneSource Speci.

OneSource reported a strong Q4 FY26, with revenues reaching INR 4,282 million, marking a 47% sequential growth, primarily driven by the commencement of invoicing for drug device combinations (DDCs) and the India Semaglutide launch. This recovery led to a sharp increase in EBITDA to INR 919 million, more than 5x the previous quarter, with a 1,550 basis points expansion in margins. Despite the strong Q4, full-year FY26 revenue stood at INR 14,216 million, a 2% decline year-on-year, mainly due to a softer previous quarter impacted by delayed Semaglutide approvals in Canada. Adjusted PAT for Q4 was INR 390 million, contributing to a full-year adjusted PAT of INR 739 million and an EPS of INR 6.5.

The company has achieved significant milestones in its Semaglutide business, securing approvals for Canada and a tentative approval for the US, positioning it as the first and only CDMO partner for the initial three generic Semaglutide approvals in highly regulated markets. The India launch saw partners on day one, now commanding nearly two-thirds of the Indian generic market share by value. Management anticipates strong commercial ramp-up throughout FY27, supported by expected approvals for multiple customers in emerging markets like Brazil, Turkey, and Saudi Arabia, where the brand has historically faced supply constraints.

OneSource is actively expanding its manufacturing capacity, with the current DDC line fully committed. A second DDC line, part of the US$100 million capex plan, is undergoing qualification and is expected to be commercially available in Q2, followed by a third line later in the year. These expansions are crucial for meeting increasing demand and supporting the company's long-term guidance. The nascent biologics business is also gaining traction, with its funnel expanding 4x year-over-year, adding European and US biosimilar partners. While meaningful contribution from biologics is expected in FY27 and FY28, commercial manufacturing is projected to commence from FY29 onwards.

The company decided to defer the previously announced scheme to integrate the injectables businesses of Steriscience and Brooks. This decision was influenced by concerns from a 'long tail' of smaller investors regarding the valuation, especially after the listed company's share price dropped significantly from the intended INR 2,200 per share. Management stated that the scheme is now 'on the back burner,' with the company prioritizing its organic growth to achieve the US$400 million revenue target for FY28 and ensuring the incoming assets deliver US$40 million EBITDA independently before revisiting such opportunities in approximately two years.

OneSource maintained a stellar compliance track record, successfully completing 49 regulatory and customer audits, including surprise FDA inspections at two sites, both resulting in EIRs. The company renewed its EU GMP certification for both its flagship and sterile injectable sites and secured ANVISA approval, enabling supply to Brazil. Significant investments have been made in human capital, adding nearly 400 people at the flagship site and strengthening front-end, operations, and quality teams. The company's commitment to ESG was recognized with an EcoVadis bronze medal for FY25 and sustainability ratings from the National Stock Exchange.