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OneSource Specialty Pharma, a contract drug manufacturer, is worth about Rs 17,700 crore. Last year it generated roughly Rs 1,400 crore in revenue and has consistently reported losses. The market is not paying for what OneSource earns today; it is paying for what management says it can earn in FY28.
And the promise is a big one. Management wants to nearly triple revenue, riding the global rush to make cheaper, generic versions of weight-loss drugs such as Ozempic. The company says demand is already outpacing its ability to make the pens. So the case comes down to a simple question: is that demand real enough, and near enough, to fill the factory OneSource has already built?
Where it came from
To understand OneSource, start with Strides Pharma. For three decades, it built a global softgel business, the soft sealed capsules used to hold liquid medicines. In a demerger effective April 2024, it carved this out and combined it with its injectables and biopharma arms to create OneSource, a CDMO (contract development and manufacturing organisation) that makes medicines for other drug companies rather than selling its own.
The demerger left two marks. It loaded the accounts with about Rs 176 crore a year of intangible amortisation, a non-cash charge that drags on profit without touching cash. It also carried across roughly Rs 1,917 crore of accumulated losses, which will shield future profits from taxes.
What it makes
OneSource's established business is built around softgel capsules and sterile injectables used in hospital and critical-care drugs. Together they generate about Rs 1,000 crore a year and form a steady, cash-generative base. Biologics, made from living cells, remains the smallest and earliest-stage business.
The growth story is drug-device combinations, or DDCs, where the drug and its delivery device are made as one unit, such as a self-injecting pen. OneSource already makes pens for semaglutide, used in diabetes and weight loss, and is preparing for tirzepatide, another in the same class.
OneSource is targeting roughly Rs 3,800 crore of revenue in FY28, with the existing businesses contributing around Rs 1,000 crore and DDC providing almost all of the rest. The next two years therefore hinge on how fast this young business can scale across a still-narrow set of drugs and customers.
| Metric (Rs cr) | FY25 | FY26 | FY28 guidance |
|---|---|---|---|
| Total Revenue | 1,445 | 1,422 | 3,800 |
| DDC Revenue* | 380 | - | 2,900 |
| Base Business Revenue | 1,065 | - | 950-1,000 |
| DDC Cartridge (mn units) | 40 | 40 | 220 |
| Softgel Capsule (bn units) | 2.4 | 2.4 | 4 |
| Sterile Injectable (mn units) | 38 | 38 | 50 |
| EBITDA Margin (%) | 32.3 | 21.4 | 40 |
| Adjusted PAT | 231 | 74 | 1,100 (implied) |
*FY25 was elevated by development-fee recognition. FY26 DDC revenue was not disclosed, making FY27 the first material year for commercial DDC revenue.
Adjusted PAT = Reported PAT + amortisation of Intangibles + one-offs. For FY28, it assumes depreciation & amortisation at Rs 320 cr and Rs 100 cr interest.
What it has built so far
The spending is largely done. OneSource announced about Rs 950 crore of capex, aimed almost entirely at the drug-device and injectable lines, 80 per cent of it already incurred.
The centrepiece is DDC cartridge capacity, the pre-filled containers loaded into injection pens. OneSource is scaling this from 40 million units a year to 220 million by FY28, with the first line already running.
The customer list is already partly commercial. OneSource counts more than 75 pharma clients and over 50 drug-device projects. In India it supplies 10 of the 21 generic semaglutide pen brands. Customers have also put down about Rs 230 crore in advances and helped fund new lines. Eight to nine more partners are preparing semaglutide launches as patents expire. The pipeline is real, but most of it has yet to convert into sales.
The ramp has already stumbled
Its anchor customer, Dr Reddy's, launched generic semaglutide in India and Canada with OneSource as manufacturer. In FY26 the Canadian launch stalled when regulators queried the partner's own dossier, forcing OneSource to defer supply, and in July supply paused again over a quality issue on the active ingredient, which customers source and specify, not OneSource.
Neither was a failure of OneSource's plants, yet both landed on its numbers: EBITDA margin fell to about 21 per cent in FY26 on flat sales, before recovering to about 27 per cent in Q1 FY27. That is the uncomfortable lesson of a CDMO: its revenue is hostage to other people's approvals, even when its own execution is spotless.
Too ambitious?
Two questions decide FY28: is there enough capacity, and can it be filled in time? The first is settled. Counting the older investment and the new capex, OneSource will sit on roughly Rs 3,300 crore of assets, enough to support the target without another plant. Capacity is not the constraint. Filling it is, and that needs three things to line up.
First, the mix has to shift, not just grow. Most DDC revenue today comes from development work, such as formulation, analytical and technology-transfer fees. By FY28, revenue needs to shift towards commercial manufacturing: filling, assembly and packaging of finished devices. The 220-million cartridge figure is also not billable output; actual volume depends on batch sizes, sterile days and whether lines are running development or commercial batches.
Second, the platform is broader than just pens, which cuts both ways. DDC spans a dozen device formats, from pre-filled syringes to autoinjectors, with 20+ customers. But near-term growth still leans heavily on weight-loss drugs, while commercial sales are limited to India and Canada, with the larger US opportunity only opening around 2032. The pipeline is wide, but revenue remains skewed.
Third, the targeted margin depends on high plant utilisation, leaving limited pricing upside. OneSource earns roughly Rs 150-160 per commercial pen for filling and related manufacturing services. The drug is passed through at cost, while pricing is often volume-tiered or take-or-pay. The key is whether these realisations can hold as commercial volumes scale.
What the price is really paying for
OneSource trades at about 240 times FY26 adjusted profits. On its FY28 ambition, that falls to about 16 times, which looks cheap at first. But that assumes DDC shifts decisively from development to commercial manufacturing, with new customers and markets converting on schedule. FY26 showed how easily that timing can slip. Suppose DDC reaches Rs 1,500 crore by FY28, while the existing business holds near Rs 1,000 crore. Total revenue would be about Rs 2,500 crore. At a 30 per cent margin, and after depreciation and interest, that could leave close to Rs 330 crore of profit. At today's price, that still demands over 50 times earnings.
So the question is not whether OneSource can grow. It already has the capacity, customers and early commercial traction. It is whether the commercial volumes arrive quickly enough to make that capacity earn its keep. The next two years will show whether OneSource has built ahead of demand, or merely ahead of earnings.
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