OneSource Specialty Pharma (ONESOURCE) Q3 25/26 earnings summary

Executive summary

• Q3 FY 2026 performance was significantly impacted by delayed semaglutide approvals in Canada, leading to deferred revenues and a $10 million sequential revenue decline, with profitability also affected.

• Strategic decision to pause new DDC MSAs, focusing on commercial readiness and capacity expansion for future growth.

• Underlying demand remains robust, with customer forecasts revised upwards and strong order books across Canada, India, and emerging markets.

• FY 2028 guidance of $400 million revenue and $160 million EBITDA reiterated, with confidence in achieving targets as regulatory approvals materialize.

• Unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2025, were reviewed and approved by the Board and auditors, with an unmodified conclusion from Deloitte Haskins & Sells.

Financial highlights

• Q3 FY 2026 revenue was INR 2,903 million ($33.1 million), a 26% year-over-year decline due to deferred DDC revenues and delayed semaglutide approvals.

• EBITDA for the quarter was INR 173 million ($2.0 million), with adjusted PAT at a loss of INR 472 million ($(5.4)m) and adjusted EPS at negative INR 4.1 per share ($(0.05)).

• Exceptional items for the quarter included legal and restructuring expenses of Rs. 70.90 million, fully provided for.

• Working capital increased due to inventory buildup for upcoming semaglutide launches, backed by customer advances or firm orders.

• Effective interest rate reduced by 200 basis points year-over-year, now below 9%.

Outlook and guidance

• No near-term (FY 2026/2027) guidance provided due to regulatory uncertainties; focus remains on FY 2028 targets.

• FY 2028 revenue CAGR expected to exceed 30%, with steady-state EBITDA margins around 40%.

• Q4 FY 2027 annualized exit run rate expected to closely reflect FY 2028 guidance.

• Capacity expansions of over INR 700 crore ($75 million) progressing well, with significant new capacity expected by H2 FY 2027.

• Debt to EBITDA ratio guided to remain below 1.5x, with expectation to be debt-free by 2028 on a steady-state base business.