ICICI Securities has maintained its 'Buy' rating on Onesource Specialty Pharma with a target price of Rs 2,400. The outlook is supported by the company’s expansion in the semaglutide market and significant increases in manufacturing capacity. Investors are currently monitoring the firm's operational execution as it pursues ambitious growth targets for fiscal year 2028.
ICICI Securities has reiterated its positive stance on Onesource Specialty Pharma, keeping a 'Buy' rating and a target price of Rs 2,400 per share. The brokerage highlighted the company’s strengthening position in the contract manufacturing sector, particularly within the market for semaglutide, a medication widely used in diabetes and weight management treatments.
Scaling for Global Demand
The company is currently focused on expanding its global reach. It is one of the few providers with approvals for generic semaglutide across G7 nations. To support this growth, the company has been investing heavily in its infrastructure. Management reports that it has increased its manufacturing capacity for drug-device combinations by 3.5 to 5 times, reaching between 700 and 950 litres as of September 2026. Additional capital spending is planned for early 2027 to further boost production capacity, aiming to meet supply chain requirements for upcoming years.
Beyond semaglutide, the company is also diversifying its business. It has secured five new client partnerships within the biologics and biosimilars sector. This requires a significant scale-up of current facilities, with plans to double production capacity for mammalian-based products and increase microbial capacity by six times. These improvements are intended to help the company handle complex manufacturing projects while protecting its profit margins.
Financial Performance and Growth Targets
For the first quarter of fiscal year 2027, the company reported strong financial growth. Consolidated revenue rose by 37% year-on-year to Rs 4,490 million, while EBITDA, a measure of operating profitability, increased by 39% to Rs 1,233 million. Looking ahead, management has reaffirmed its guidance for fiscal year 2028, aiming for organic revenue of $400 million and an EBITDA margin of 40%. Achieving these targets will require consistent execution of their ongoing capacity expansion projects.
Risks and Market Monitoring
While the growth outlook appears positive, investors should be aware of potential risks. The pharmaceutical contract manufacturing business is highly competitive, and the company faces potential pricing pressure from global peers. Additionally, the business depends heavily on strict regulatory compliance. Any failure to meet international standards set by bodies like the US-FDA or EU GMP could impact operations. There is also an execution risk associated with scaling manufacturing capacity, as delays could affect the company’s ability to meet its aggressive revenue targets.
The next important update for shareholders will be the company’s 19th Annual General Meeting, which is scheduled for September 23, 2026. Market observers will be looking for management commentary regarding project timelines and demand trends during this meeting.