Onesource Specialty Pharma tanks 18% on weak Q3; what should investors do?

Onesource Specialty Pharma shares tanked 17.7 per cent on BSE, logging an intra-day low at ₹1,178. At 11:27 AM, Onesource Specialty Pharma’s shares were trading 16.23 per cent lower at ₹1,200.2. In comparison, the BSE Sensex slipped 0.15 per cent to 81,412.48. 

 

The selling pressure on the counter came after the company released its December quarter (Q3FY26) results. 

 

In Q3, the company’s net loss widened to ₹88.7 crore, as compared to ₹68.8 crore, year-on-year (Y-o-Y). Its revenue from operations stood at ₹290.3 crore, down 26 per cent Y-o-Y as compared to ₹392.56 crore a year ago. 

 

The Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at ₹17.3 crore, down 88 per cent Y-o-Y, due to lower revenue in the quarter and largely fixed cost base, according to the filing. Ebitda margin stood at 6 per cent, as compared to 36 per cent a year ago. Check detailed results here 

 

 

JM Financial Institutional Securities cut its rating to ‘Reduce’ from ‘Buy’, decreasing the target price sharply to ₹1,490 per share from ₹2,621. 

 

The brokerage flagged weak Q3 numbers for OneSource, with revenue and Ebitda declining  Y-o-Y, and the net loss widening in Q3FY25. While the weak quarter was expected due to delays in the launch of generic Semaglutide in Canada, the magnitude of losses surprised, driven by higher fixed costs and a sequential decline in revenue after the company stopped taking incremental master contract agreements (MCAs). 

 

Weak traction in the non-drug development and compliance (DDC) business failed to offset the drop in DDC MCA volumes, leaving the company heavily dependent on Canada approval, with management also flagging limited pricing attractiveness in India when the market opens. 

 

JM believes certificate of pharmaceutical product (COPP)-based markets may take another 6–12 months to open, making the next two quarters uninspiring and potentially extending selling pressure on the stock. The brokerage also raised concerns over management’s commentary on Take-and-Pay contracts, which appeared inconsistent with earlier guidance that first-phase capacity was fully locked in. 

 

As a result, JM has cut its FY27/FY28 revenue estimates by 20 per cent, downgraded the stock to REDUCE, valuing the stock at 15x Mar-28 Ebitda, while noting that any near-term sentiment boost from a possible Canada approval would have limited immediate financial impact.