Financials

Figures converted from INR at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.

Financials in One Page

Onyx Biotec is a tiny $6.0M market-cap, NSE SME-listed sterile injectables contract manufacturer that compounded revenue at roughly 16% per year from FY2022 to FY2025 with respectable mid-teen operating margins, then ran straight into a wall in FY2026: revenue still grew 12% to $7.41M, but operating margin collapsed from 16.8% to 4.9%, the company swung to a $0.02M net loss, operating cash flow turned negative (-$0.16M), and free cash flow fell to -$0.69M. Underneath that, receivable days have ballooned from 47 (FY2023) to 144 (FY2026) — customers now pay nearly five months out — and ROCE has cratered from 12.2% to 1.1%. The balance sheet is still net cash on paper ($0.43M cash vs $1.62M borrowings, $5.91M equity), but cash burned $0.49M in FY2026 and short-term borrowings rose 84% year-on-year. The stock trades at 1.05x book with no earnings to multiple. The single financial metric that matters right now is whether operating margin can re-base above 10% in H1 FY2027; if not, this becomes a balance-sheet story.

Revenue, Margins, and Earnings Power

The top line tells one story; the cost line tells another.

Revenue has compounded at roughly 16% per year over FY2022–FY2026 — strong on paper, but masked by a sharp FY2023 dip (-12% as Unit-II commissioning disrupted output) and a one-off FY2024 catch-up (+36%). The cleaner read is FY2024 → FY2026 at about 14% revenue CAGR while net profit fell from $0.44M to a loss.

FY2025 was the peak: 16.76% operating margin, 8.0% net margin — the highest in the available history. The FY2026 break is striking — operating margin lost roughly 1,200 basis points in a single year. The cost lines tell the story: material consumption rose from $4.52M to $5.45M (+32%) while revenue rose only 12%; "other expenses" jumped from $0.44M to $0.62M. Either input cost inflation in cephalosporin APIs and PVC outpaced contract repricing, or the customer mix shifted toward lower-margin tolling. Management has not yet provided an explanation in any concall format (no transcripts are mandated for NSE SME issuers).

Half-yearly is the highest disclosure frequency NSE SME issuers must publish. The half-on-half pattern shows that the margin break happened in H1 FY2026 (OPM 2.72%) and only partially recovered in H2 (7.02%) — a sequential bounce, not a full repair. Revenue held the run-rate of $3.7-3.9M per half, so demand is fine; profitability is the open question.

Cash Flow and Earnings Quality

Earnings quality is the place to find out whether reported profit is real cash. Free cash flow (FCF) is the cash a business generates after paying for operations and capital expenditure — it is the cash you could theoretically take out of the business without shrinking it. For a CDMO, FCF should track net profit over a multi-year period; if it does not, the gap is either working capital absorbed by growth or capex absorbed by expansion.

Earnings quality is poor and getting worse. Operating cash flow has chronically run below net profit for five years: in FY2022 net profit was $0.44M but CFO was only $0.06M; in FY2024 the ratio was 18%; in FY2025 just 14% ($0.17M CFO on $0.58M profit). The gap is working capital — receivables and inventory have been absorbing every dollar of reported profit. FY2026 finally tipped the balance: CFO turned negative (-$0.16M) even before capex.

Capex jumped to $0.53M in FY2026 (Unit I upgrade plus a high-speed carton line at Unit II — both IPO-proceeds projects). That is consistent with the $0.39M of Capital Work-in-Progress on the FY2026 balance sheet, up from zero a year earlier. The FCF gap of -$0.69M is therefore part working-capital deterioration and part planned growth capex — but it still has to be funded, and cash on hand fell from $1.01M to $0.43M in twelve months.

Balance Sheet and Financial Resilience

The balance sheet looks better than the income statement, but the trend is the warning.

The FY2025 jump in equity (from $3.03M to $6.51M) is the Nov-2024 IPO at $0.73/share equivalent — $3.32M gross, $3.03M net of issue expenses (converted at the listing-date rate). $1.40M of those proceeds was earmarked and used to prepay debt, which is why borrowings dropped from $3.69M to $1.46M in one year. The FY2026 step-up in borrowings ($1.46M to $1.62M) is entirely short-term: short-term borrowings rose from $0.67M to $1.12M (+84%) while long-term debt fell from $0.79M to $0.50M. That is the classic working-capital squeeze signature — borrowing short to fund receivables that are not converting.

This chart is the single most alarming view of Onyx. Debtor days have climbed every year — 47 → 104 → 119 → 144 — meaning customers now pay roughly five months after delivery, against an industry norm closer to 60-90 days. Inventory days spiked in FY2025 (likely Unit-II buffer build for the WHO-GMP certification granted May 2024) before partially normalising in FY2026. The cash conversion cycle has more than tripled from 37 days (FY2023) to 119 days (FY2026). For a $7.4M revenue business, each 30 days of CCC ties up roughly $0.6M of working capital — that is real cash on a balance sheet with only $0.43M in the bank.

Headline leverage is modest — net debt of $1.19M against $5.91M of equity (debt/equity 0.27x). But interest coverage thinned dramatically: $0.36M operating profit against $0.13M interest is only 2.81x in FY2026, down from 5.14x in FY2025. There is no Altman Z-Score, Piotroski F-Score, or Quality Score in the data set (the third-party rankings service returned no probe for this SME), so resilience has to be inferred from the line items themselves.

Returns, Reinvestment, and Capital Allocation

ROCE peaked at 12.85% in FY2024 (within touching distance of Akums and the lower-quartile listed CDMO peers), held at 12.16% in FY2025, and then collapsed to 1.14% in FY2026 — well below the cost of debt the company itself pays (its weighted interest rate on FY2026 borrowings is roughly 8-9% implied). On the GFC framework where returns must clear the cost of capital, FY2026 is value-destructive.

Capital allocation is short and simple. The November 2024 IPO raised $3.03M net (at the listing-date rate). Through 31 March 2026, $2.48M has been spent against the prospectus objects: $1.28M to prepay loans, $0.46M toward the Unit I large-volume parenterals upgrade, $0.10M toward the Unit II carton line, $0.64M for general corporate purposes. $0.22M is parked in fixed deposits awaiting deployment. No dividend has ever been paid; no buyback has been authorised. The share count is steady at 18.13 million post-IPO. Promoter holding is unchanged at 65.10% since listing — no insider selling, but no insider buying either at the current discount to issue price.

Segment and Unit Economics

Onyx files a single-segment disclosure ("manufacturing of pharmaceutical products"), so there is no segmental P&L available. Operationally the business is two units in Solan, Himachal Pradesh: Unit I (Sterile Water for Injections, 638,889 units/day) and Unit II (Dry Powder Injections at 40,000 units/day plus Dry Powder Syrups at 26,667 units/day, both Cephalosporin-focused). The IPO RHP discloses customer concentration is high — Aristo, Mankind, Dr Reddy's, Sun Pharma, and Macleods are named — but neither share-of-revenue per customer nor unit-economics per dosage form is disclosed in any current filing. This is the single biggest blind spot in the financials.

Valuation and Market Expectations

The stock trades at $0.33, against an IPO price of $0.63 (-47.5%) and a 52-week high of $0.58 (-42.9%). Market cap is $6.0M.

Earnings-based multiples are uninformative right now (P/E is undefined on a loss; EV/EBITDA on $0.36M of operating profit on EV of ~$7.2M is roughly 20x — a number that overstates quality given the margin trajectory). The honest multiples are book-based and sales-based: P/B 1.05x and EV/Sales 1.0x ($7.4M revenue, $7.2M enterprise value at cur cash+debt). Both are at the floor of what an Indian sterile injectables CDMO trades at when investors are still willing to underwrite the business.

On book multiple alone, Onyx looks 60-90% cheaper than peers. But the gap is deserved: ROCE 1.1% versus a peer range of 8-26%, operating margin 4.9% versus 12-35%, and zero analyst coverage or governance liquidity (1,181 shareholders at IPO, only 586 by Mar 2026). The cleanest valuation read is: the stock prices in a roughly equal probability of (a) FY2025-level margins returning, in which case $0.33 is a structural mispricing, or (b) FY2026 being a new normal, in which case $0.33 is fair to expensive on an asset basis only.

The bear case applies a 0.6x P/B haircut to reflect ROCE that does not clear the cost of capital. The base case capitalises a normalised ~10% operating margin at 1.2x book. The bull case re-rates to 2.0x book on FY2025 margin recovery — still well below peer trading multiples, but consistent with the company's actual size and SME-platform liquidity discount.

Peer Financial Comparison

Onyx is the smallest economic substitute in the listed Indian sterile-injectables / CDMO universe by a factor of 30-100x.

The premium peers (JBCHEPHARM, CAPLIPOINT) earn 25%+ ROCE on margins three-to-seven times Onyx's. The middle of the peer set (GLAND, AKUMS, COHANCE) shows that even larger CDMOs see margin cyclicality — Akums printed -2% OPM in FY2022 and has been climbing back; Cohance's OPM has compressed from 45% to 19% in five years. So Onyx's FY2026 margin drop is not unprecedented for the sector, but the question is whether a sub-scale SME has the working-capital muscle to wait out the same kind of multi-year recovery the larger peers are walking through. The peer comparison gives Onyx no obvious discount premium it has not already earned: the 1.05x P/B is consistent with the worst-profitability peer (AKUMS at 2.4x P/B with 12% OPM and 14.9% ROCE — so Onyx at half the multiple with one-third the OPM is not particularly cheap).

What to Watch in the Financials

The financials confirm that the long-term growth proposition (sterile injectables capacity sold at WHO-GMP quality to large Indian pharma majors) is structurally intact: revenue did grow, the Unit I upgrade is on track, the IPO money was used as promised, and the company is still net-positive equity, net-cash-positive ex-borrowings paid down. The financials contradict the bullish narrative that the IPO would catalyse a margin and ROCE re-rating — instead, the post-IPO year delivered the worst margin and lowest ROCE on record, with cash conversion that points to operational stress.

The first financial metric to watch is the H1 FY2027 operating margin print (expected November 2026). If it prints above 10%, the FY2026 collapse was a working-capital and input-cost cycle and the 1.05x P/B is a structural mispricing. If it prints below 5%, the business model has compressed and the stock is correctly priced as a sub-scale, sub-cost-of-capital asset.