Buy Onesource Specialty Pharma; target of Rs 2475 : ICICI Securities

ICICI Securities's research report on Onesource Specialty Pharma

Delay in generic semaglutide approvals from Canadian regulator may shift the launch timeline by a quarter; however, with a few customers securing the approval in India and approvals in Brazil and Saudi Arabia expected to flow in, OneSource’s management remains confident of the upcoming opportunity, and hence, maintains FY28 guidance for its base business. OneSource has a diversified customer base with over 20 customers who have pre-booked its GLP-1 capacity, and hence, it is now not onboarding any new customer. Management aims to touch USD 500mn revenue (including the proposed acquisition of injectable assets) and EBITDA margin of ~40% by FY28. Cut FY26/27E EPS by ~48%/5% to factor in the delay in revenue recognition. Maintain BUY with SoTP-based unchanged TP of INR 2,475..

Outlook

We expect OneSource to post revenue/EBITDA/PAT CAGR of ~36%/44%/356% over FY25–27E with 652bps jump in EBITDA margin to 38.8% in FY28E. At CMP, the stock trades at 27.3x/18.8x FY27/28E EPS of INR 64.3/INR 93.5. We maintain BUY, valuing the company on SoTP basis, with target price of INR 2,475.