ICICI Securities has started coverage on Onesource Specialty Pharma, projecting revenue growth linked to generic semaglutide supply. The brokerage estimates the company is targeting USD 400 million in revenue by FY28. Investors may track the progress of capacity expansion and client onboarding for the company's GLP-1 products.
Detailed Coverage
ICICI Securities has initiated coverage on Onesource Specialty Pharma, highlighting the company’s potential in the specialized pharmaceutical market. The brokerage firm anticipates that the start of commercial supplies for generic semaglutide will be a key factor for the company's financial performance starting in the first quarter of the 2027 financial year.
Capacity Expansion and Market Positioning
Onesource Specialty Pharma is currently working on increasing its manufacturing capabilities. The company is near the end of its first phase of expansion, which is expected to double its fill-finish capacity. This manufacturing process involves filling vials or syringes with medication and finishing the packaging. Additional capacity improvements are scheduled to be finished by the end of the 2027 financial year. Currently, the company holds a significant share of the single-use pen market in India and provides generic semaglutide in the Canadian market.
Growth Targets and Revenue Visibility
The company has set a revenue target of USD 400 million for the 2028 financial year, with an expected operating profit (EBITDA) of USD 160 million. Achieving these targets will depend on the successful onboarding of new clients for its GLP-1 products, a category of drugs used for diabetes and weight management. Beyond its current offerings, the company is also looking at the biologics segment as a source of future growth, with expectations that recent client approvals will contribute to performance from the 2029 financial year onwards.
Factors for Investors to Monitor
While the brokerage remains optimistic about the company’s earnings per share estimates for the 2028 financial year, investors should consider the typical risks associated with pharmaceutical manufacturing and expansion. These include the timely completion of capacity projects and the ability to maintain profit margins amid potential pricing pressure in the competitive generics sector. Additionally, the company's reliance on specific product categories like GLP-1 means that future performance will be closely tied to demand trends and regulatory approvals in international markets. Monitoring the actual execution of these expansion plans and the speed of client acquisition will be essential for understanding the company's long-term financial health.