Primer

Onyx Biotec Limited Primer

Onyx Biotec is a Solan (Himachal Pradesh)–based micro-cap pharma contract manufacturer that produces sterile water for injection, dry powder injections and dry syrups for Indian and overseas drug companies from two WHO-GMP plants. It listed on the NSE SME platform in November 2024 at ₹61 to fund a large-volume parenteral (IV bag) upgrade at Unit I and a high-speed cartoning line for dry powder injections at Unit II. The stock matters now because the post-IPO capex thesis collided with a FY26 raw-material spike that pushed Onyx from a record FY25 profit into a small statutory loss, leaving a ₹58 cr market cap with operating margins compressed to ~1% and net debt of roughly ₹28 cr.

Price since listing

Onyx debuted on 22 November 2024 at ₹54.05 (an 11% discount to the ₹61 IPO price) after the issue was subscribed roughly 184x. Shares spiked to an all-time high of ₹97.45 in the post-listing frenzy before grinding lower as quarterly results disappointed. The stock is currently ₹32, down 39% over twelve months and 67% off the post-listing high; the curve above interpolates between the listing day, the all-time high and the 1W / 1M / 3M / 6M / 1Y reference returns reported by Tickertape and ICICI Direct because a clean daily series was not retrievable.

Revenue trajectory and operating margin

Revenue compounded from ₹45 cr in FY22 to ₹70 cr in FY26 — a ~12% CAGR but with a sharp 11% reacceleration last year after the IPO-funded capacity work began commissioning. Operating margin rose from 7.9% in FY23 to a peak of 13.4% in FY25, then collapsed to 1.1% in FY26 as raw-material spend leapt from ₹38.6 cr to ₹66.1 cr (+71% on revenue growth of only +11%). EBITDA mirrored the move, falling from ₹11.5 cr to ₹3.8 cr, and net result swung from a ₹4.94 cr profit to a ₹0.21 cr loss.

Business In One Page

Onyx Biotec was incorporated in 2009 and operates two manufacturing units in Solan, Himachal Pradesh. Unit I produces sterile water for injection (SWFI) with a stated daily capacity of 638,889 ampoules; Unit II produces 40,000 vials of dry powder injection (DPI) and 26,667 bottles of dry syrup per single shift. Both facilities are WHO-GMP certified and the company employed roughly 175 people at the time of its prospectus.

The revenue model has two layers. The first is in-house manufacture and sale of generic sterile pharmaceuticals (SWFI, DPI, dry syrups, and a small proprietary range) sold to Indian formulators and exported to overseas regulated and semi-regulated markets. The second is third-party contract manufacturing — Onyx files dossiers, runs the analytical work and supplies branded customers under their labels. SWFI is the volume anchor; DPI and dry syrup are higher-value, lower-volume lines where the IPO-funded high-speed cartoning line is intended to lift throughput. Promoters reduced their stake from 88.6% pre-IPO to 65.1% post-IPO and have held that level through March 2026.

Economics are characteristic of small-scale sterile injectables: raw materials (active ingredients, vials, ampoules, packaging) are the dominant cost line at 55–95% of revenue depending on mix, energy/utilities are non-trivial because sterile water and lyophilization are utility-intensive, and depreciation steps up whenever a new line is installed (D&A roughly doubled from ₹1.5 cr in FY23 to ₹3.05 cr in FY25 as the IPO capex came online). The most important company-specific driver is unit-economics on the new large-volume parenteral (LVP/IV bag) line at Unit I — if it ramps at decent capacity utilisation, gross margin recovers; if it ramps slowly while input costs stay elevated, the operating-margin gap stays open.

Valuation And Balance Sheet Snapshot

At ₹32 the company trades on a market capitalisation of ₹58.02 cr against 18.13 million shares outstanding (up 19% YoY post-IPO). On reported FY26 numbers ONYX has no meaningful P/E (the company is in a small statutory loss) but trades on roughly 0.83x sales, 1.05x book and 18x EV/EBITDA — well above the larger listed pharma peers (Lupin 19x P/E, Sun 41x P/E, Dr Reddy's 27x P/E per Tickertape) on an absolute multiple basis, while looking under-screened on price-to-book. Enterprise value is approximately ₹69.16 cr after adding ~₹30.17 cr of debt and netting off ~₹1.52 cr of cash, leaving net debt near ₹28.6 cr (per stockanalysis.com 19 May 2026).

The balance sheet is leveraged for a company at this scale: debt-to-equity is ~0.27, interest coverage (EBIT / interest) is just 0.65x in FY26, and free cash flow has been negative or barely positive in every year since FY22 because IPO-era capex (peak ₹22.7 cr in FY23) overwhelmed thin operating cash flow (≤₹2 cr each year). The market is likely framing Onyx as a post-IPO "ramp story" stock where capacity has been built but margins have not yet recovered — a classic small-cap pharma "show me" set-up.

What Changed Recently

• FY26 results (filed 14 May 2026, BSE filing per scanx.trade): revenue from operations of ₹69.47 cr (vs ₹61.95 cr) and a net loss of ₹21.44 lakhs after total expenditure surged to ₹70.34 cr from ₹56.64 cr — auditors issued an unmodified opinion (scanx.trade, 19 May 2026).
• Q4 FY26 (board meeting 14 May 2026): approximately ₹15 cr of revenue and ~₹1 cr PAT in the March quarter, per univest.in's results coverage — implying the year-end quarter recovered from earlier weakness even though the full year still printed a loss.
• IPO proceeds tracking: ₹23.25 cr of the ₹25.38 cr net IPO proceeds had been utilised by FY26-end, with the company confirming no deviation in deployment (scanx.trade) — capital is largely in the ground rather than waiting on the balance sheet.
• Raw-material cost shock: Raw material spend jumped from ₹38.6 cr (FY25) to ₹66.1 cr (FY26) per the Tickertape income summary — a ~71% increase against 11% revenue growth, which is the single largest swing factor behind the margin collapse.
• Trading update cadence: the next board meeting to declare quarterly results is scheduled for 14 May 2026 (already past) and a 28 May 2025 board meeting and 27 September 2025 AGM (the company's 20th) were the prior governance milestones (Capital Market – Live disclosures via Tickertape).
• Volatility profile: Tickertape flags ONYX as 5.39x as volatile as the Nifty with 69.4% trailing volatility — typical of NSE SME names but a key risk indicator for position-sizing.

Risks And Watchpoints

• Margin durability: the FY26 swing into operating breakeven was driven almost entirely by raw materials. Unless the FY27 first-half results show RM/revenue returning toward 60–65%, the equity story breaks regardless of revenue growth.
• Interest coverage: at 0.65x EBIT / interest in FY26 (stockanalysis.com) the company is one bad quarter away from interest expense eating into book equity; investors should track sequential interest cost against EBITDA each quarter.
• Liquidity and float: market cap of ₹58 cr, only ~5.9 million free float shares, NSE SME listing, no MF/FII presence beyond 1.07% — bid-ask spreads and single-day volume swings can be large, and the SME segment has additional lot-size and circuit-filter rules to be aware of.
• Customer concentration / contract manufacturing exposure: disclosures suggest a significant share of sales is contract manufacturing for branded Indian and overseas pharma customers, but the company has not publicly broken out top-customer share — a single contract renegotiation could meaningfully move revenue.
• Tickertape scorecard: Performance "Low" (amongst the low performers), Valuation "High" (overvalued vs market average), Growth "Low" — automated scorecards are blunt but the directional read aligns with the financial picture above.
• Sectoral / regulatory: sterile injectables manufacturing is subject to repeated WHO-GMP, USFDA and state drug-controller audits; any 483-style observation at the small Unit I/II plants would be material at this scale.

What To Verify Next

• Pull the audited FY26 standalone financials (onyxbiotec.com/pdf/annual-report-25.pdf and the 14 May 2026 BSE outcome filing) for the actual segment-level revenue split, top-customer disclosure, and confirmation of the raw-material line item driving the margin compression.
• Confirm utilisation of the new LVP / IV bag line at Unit I and the high-speed DPI cartoning line at Unit II — these are the specific IPO-funded assets the FY27 thesis depends on.
• Look up the FY27 Q1 results (expected late July 2026 per the company's typical cadence) for sequential gross-margin movement and an updated working-capital position relative to the ₹28.6 cr net-debt mark.
• Check NSE SME mainboard migration eligibility — Onyx has been listed since November 2024 and the SME-to-mainboard pathway typically opens after two full years of listed financials.
• Verify post-IPO insider/promoter activity using the company's BSE/NSE insider disclosures, since promoter holding has stayed at 65.10% across the four reported quarters but related-party transactions and director remuneration are not in the local data.