Onesource Specialty Pharma scales GLP-1 capacity for FY28 commercial execution

Investment View and Target Price

In its September 6, 2026 company update, ICICI Securities retained its BUY recommendation on Onesource Specialty Pharma, citing a transition from building its order book to commercial execution in drug-device combinations (DDC), particularly for GLP-1 products. The broker also retained its target price of Rs 2,400, supported by rising semaglutide demand, substantial DDC capacity additions and an expanding biologics and biosimilars platform.

GLP-1 Commercial Execution

Onesource is described as the only CDMO with generic semaglutide approvals across G7 countries. It has more than 20 DDC customers and currently supplies semaglutide and liraglutide to India, Canada and Saudi Arabia.

Canada is Onesource's largest market. Customers Apotex and Aspen have launched semaglutide, while Dr Reddy's may relaunch the product in Q3FY27. In India, 10 of the 28 semaglutide pens sold are manufactured by Onesource. Partner Hikma launched semaglutide in Saudi Arabia in Q2FY27. Management expects supplies to Brazil, Turkey, Latin America and Southeast Asia to begin shortly.

Two customers have secured first-to-file status with the USFDA for generic tirzepatide, which ICICI Securities views as a longer-term GLP-1 growth catalyst.

DDC Capacity Expansion

The broker highlighted DDC capacity expansion as improving visibility for FY28 execution. Onesource added a 500-750 litre Tofflon line in September 2026 alongside its existing 200 litre Bausch and Strobel capacity. It also added a new filling line that could raise output to 300 pens per minute from 140 pens per minute.

A further 500-750 litre Bausch and Strobel capacity addition and filling line are planned for March 2027. Another filling line is planned in FY28 to shift new master service agreements and non-GLP-1 products to the original line. Management expects these additions to triple production days to 675 in FY28.

Biologics and Injectable Platform

Biologics are expected to become a second growth engine from FY29. The company has added five new client partnerships, including a Q1FY27 agreement with Germany-based Formycon for biosimilar drug substance and drug product, with supplies expected from FY29.

Onesource plans to double mammalian capacity and increase microbial capacity sixfold, with both available for commercialisation in FY29. Separately, it is building a major lyophilisation injectable platform in India, aiming to double vial capacity and triple lyophilisation capacity.

A four-month shutdown from Q2FY27 to Q3FY27 to install a high-viscosity line could temporarily affect reported numbers. Soft-gel capacity is planned to double from 2.4 billion to 5 billion capsules, with high-potency capabilities added.

Financial Outlook and Estimates

Management reiterated FY28 guidance of US$400 million revenue and US$160 million EBITDA. ICICI Securities estimates revenue and EBITDA compound annual growth of about 63 per cent and 126 per cent, respectively, over FY26 to FY28E. EBITDA margin is expected to rise by about 1,990 basis points to 41.3 per cent in FY28E.

FY27E revenue, EBITDA and EPS estimates were revised by 2.2 per cent, negative 3.6 per cent and negative 3.7 per cent, respectively. FY28E estimates were revised up 3.0 per cent, 6.5 per cent and 9.4 per cent, respectively.

Valuation and Key Risks

The Rs 2,400 target price is based on a sum-of-the-parts valuation using FY28E EBITDA multiples: DDC at 19 times, and soft gel and Steriscience at 16 times each.

Key downside risks identified by ICICI Securities are:

• Competition and pricing pressure from global CDMOs.
• A market shift towards oral solid products.
• Compliance or regulatory hurdles.