OneSource Specialty Pharma (ONESOURCE) Q2 26/27 earnings summary

Executive summary

• Third consecutive quarter of sequential revenue growth; Q2 revenue was Rs 5,162.42m, up 37% YoY and 15% QoQ, while EBITDA rose 53% YoY.

• Growth reflected new DDC capacity, MSA execution, launches and customer wins across biologics and base businesses; management expects H2 to exceed H1.

Financial highlights

• Q2 EBITDA was Rs 1,633m, up 53% YoY and 32% QoQ; margin reached 31.6%, up 416 bps QoQ. H1 reported EBITDA grew 47% YoY.

• Q2 reported PAT was Rs 574.84m; adjusted PAT was Rs 937m, up 109% YoY. H1 PAT was Rs 824.81m versus Rs 102.99m a year earlier.

• H1 revenue was Rs 9,652.65m versus Rs 7,030.33m; H1 EPS was Rs 7.19 versus Rs 0.90, while Q2 EPS was Rs 5.01 versus Rs 0.90.

• Faster EBITDA growth than revenue was attributed to operating leverage, with incremental costs limited relative to incremental revenue.

Outlook and guidance

• FY28 guidance reaffirmed at $400m organic revenue and $160m reported EBITDA; steady-state EBITDA margin outlook is 40%. H2 FY27 is expected to exceed H1.

• DDC capacity is expected to triple for FY28; all three lines are expected to be available during FY28, though line 3 commercialization could shift to early FY28 due to qualification timelines.

• DDC is expected to remain a strong contributor in H2 and FY28; biologics commercial revenue is expected from FY29, following MSA pre-approval revenue during the guidance period.

• Current effective tax rate is expected to continue through at least Q3 FY28 as brought-forward losses are utilized; high-twenties return on capital is anticipated by FY28-end.