Onesource Specialty Pharma Ltd (ONESOURCE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Q2 FY27 earnings conference call of OneSource Specialty Pharma Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Singhal. Thank you, and over to you, sir.
Abhishek Singhal (Onesource Specialty Pharma Ltd): Thank you, Danish, and thank you all for joining us today for the earnings conference call of OneSource Specialty Pharma Limited for the second quarter and half year ended September 30, 2026. We have with us Neeraj, CEO and MD, and Anurag, CFO of the company, who will walk you through the key business and financial highlights for the quarter and for the first half of the financial year. I trust you have the opportunity to review our results release and the investor presentation, both of which are available on the company's website as well as on the stock exchange website. The transcript for this call will be posted on the company's website within the next week. Please note that today's discussion may contain forward-looking statements, which should be viewed in the context of the risk inherent in our business. Should you have any further questions after this call, our investor relations team will be happy to assist you. I now hand over the call to Neeraj for his opening remarks.
Neeraj (Onesource Specialty Pharma Ltd): Thank you, Abhishek, and a very warm welcome to everyone joining this late evening for our for our Q2 results. So, Q2 was a was a strong quarter for us. In fact, it was our third consecutive quarter of sequential growth, and in line with the trajectory which we had outlined in our previous calls. So, if you saw that, you know, revenue increased 37% year-on-year, 15% sequentially. And in the quarter, we actually delivered, you know, more than 5 billion Indian rupees revenue. In fact, more hearteningly, EBITDA grew 53% year-on-year, you know, 32% sequentially, and the margin
Neeraj (Onesource Specialty Pharma Ltd): was higher. EBITDA growth was higher than the revenue growth. It really demonstrates the operating leverage, which is inherent in our business model. And, in fact, if you look at the first half, you know, put together both the quarters, it's been a 47% year-on-year growth of EBITDA. So the growth both in this quarter, as well as, you know, for the first half, is actually been, you know, driven by the additional DDC capacity, which has come online in the last in the last quarter, which is quarter two, and, you know, which helped us both commercial as well as MSA revenue coming in, you know, thanks to that execution. And, and really staying with our DDC line expansion, you know, many of you saw, our second cartridge line is now running commercial batches, you know, even though the geopolitics actually impacted its start by almost six months, but the fact is that today, the line, you know, already since since September, it is operational. And it has immediately doubled our total, you know, sterile production days. So the additional capacity, as we had said last time, the additional capacity really supports both the the new launches which are coming in and provide us a significant ramp-up of the commercial volumes, which we are expecting during the second half. I'm also happy to to share with you that even our third line is has successfully completed its factory acceptance test in Germany and is now at our site as we speak, ready for qualification. I mean, this line also, you know, the arrival was longer than than anticipated, obviously due to this extended transit times because of what's happening in the Gulf. But as you also know that this, these are, you know, very bespoke lines, and I think I explained in my previous calls and interactions with many of you that, you know, these are lines built for much larger batch sizes and therefore, you know, they require quite rigorous qualification, involving multiple European vendors. So keeping that in mind, you know, while that we are making every effort for it to start in Q4, but the commercialization, you know, might get pushed to to the start of FY28. However, I just, you know, want to reiterate here that, you know, we'll have all three lines fully operational and available for for FY28. And this is not just, you know, the filling capacity. I think that's what is important to highlight here and what really differentiates OneSource from, you know, from every other CDMO is that every one of our lines are backed by, you know, full end-to-end capabilities, whether it is not only cartridge filling, but assembly, labeling, packaging, and so on, including cold chain, all under, all under one roof. And this differentiates us not only in India, but even even globally. Our semaglutide footprint continued to grow during the quarter, and our, you know, our partner, Hikma, launched the first first generic semaglutide in Saudi Arabia, which really expands our presence in a very important market, which is off-patent. Also, more hearteningly, you know, the Dr. Reddy's API has start, has commenced. And I think, which they also spoke about in their earnings call. And this would really help relaunch in Canada, as well as launch across multiple other markets where they already have an approval. And apart from Dr. Reddy's, also the, you know, the supply ramp-up from our other Canadian customers is also, also on track for the, the quarter three. Now, moving on to our, you know, second strong leg of our business, which is, which is very, emerging very fast, which is biologics. You know, it's increasingly becoming a very key growth pillar for us. And during the quarter, we had multiple new project wins, which is both from new customers who we onboarded, as well as existing customers. You know, in, we have onboarded two projects from for end-to-end development to commercialization projects from a US biotech. You know, we we secured additional new program for one of our, you know, one of the top global animal health companies and our existing customer. And, you know, we, and
Neeraj (Onesource Specialty Pharma Ltd): And this, as you know, came comes back to back of, you know, from the previous quarter, where we had EU customer wins. Now, these wins, when you know, when whether the the US or Europe, these really reflect the the the really integrated offering which we have, which we call from gene to device in biologics, which again very few CDMOs offer, and the fact that, you know, India is growing position as a as a trusted hub of global biologics, biosimilar development as well as manufacturing. Now, same is reflected in our biologics RFP funnel, which is at the highest highest ever, with multiple projects in advanced stages, and and all this, you know, is really going to be driving the growth beyond FY28 for us. As far as base business, specially injectables, you know, we discussed last quarter, we are adding new capabilities, you know, it's including pre-filled syringes and new lyophilization capacity. And the plant shutdown which is of the site is is in fact currently underway. It started at the back end of of quarter two. But the new capacity will be available from next quarter onwards. And both at the same time, you know, both our injectable and softgel business grew last quarter with multiple launches actually happening in in in in several markets during the quarter. An- another, you know, a thing which we always proud of, our compliance track record, where, you know, during the quarter we successfully completed multiple regulatory and and customer audits and also as a new capacity comes online you know, it's this track record is is really maintaining the track record is really what the whole team is is focused on. Just to conclude, you know, with the with the Line 2 already commercial, Line 3 progressing, you know, new launches coming through and and coming, you know, more coming in the in the next coming quarters. A very strong biologics funnel and momentum across across the business, you know, we are really set for our next phase of growth. We expect second half to be stronger than the first and you know, basis that we're also reaffirming our FY28 outlook which we have given of $400 million revenue and and $160 million EBITDA. And also, you know, really important, as we build the capabilities, capacities, and the the customer relationships, you know, this we believe will really sustain the growth beyond the current year and beyond our guidance provide gui- guidance period. Finally, I really want to thank our teams for their commitment and our customers for the trust they continue to place in us. And I really want to thank everyone here, and would be happy to take questions along with Anurag, our CFO.
Abhishek Singhal (Onesource Specialty Pharma Ltd): Danish, we're good to go. Can you please take the Q&A?
Moderator: Sure. Thank you so much, sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Rupesh Tatia with Long Equity Partners. Please go ahead.
Rupesh Tatia (Long Equity Partners): Yeah. Hi, sir. Am I audible?
Neeraj (Onesource Specialty Pharma Ltd): Yes, Rupesh. Go ahead.
Rupesh Tatia (Long Equity Partners): Yeah. Congratulations Neeraj on fantastic set of results. First question is on capacities across all our businesses. So softgel, what is the capacity utilization? SteriScience, I think we had this plant shutdown, so if you can, you know, quantify what what kind of revenue loss we saw in Q2 and and is is that capacity going to be available in Q3 or or it's going to take a bit of time? On DDC, is is it is the new line 500-liter batch size line or are we still on the 200-liter batch size? And when when do we expect this capacity to reach optimum utilization, Line 2 DDC? So, first question is on capacities across all of these.
Neeraj (Onesource Specialty Pharma Ltd): Yeah, Rupesh. Thanks for asking. I think as you know, we've been maintaining
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