Financials

Financials — What the Numbers Say

Onyx Biotec is a ₹58 crore contract manufacturer of sterile water for injections, dry powder injections and dry syrups, run by promoters who still own 65% post-IPO. Five years of steady top-line growth (₹44.9 Cr → ₹69.5 Cr) and an FY2025 margin peak of 16.8% masked a fragile cash engine, and FY2026 broke the model — operating margin to 4.9%, ₹0.21 Cr net loss, cash from operations negative, debtor days 144, ROCE from 12.2% to 1.1%. The stock trades at one times book (₹32 vs ₹30.6 BV) because the market has marked the business down to its hard-asset value while it waits for margin recovery. The number that matters now is FY2027 H1 operating margin: a print below 10% would weaken the equity story.

Quality Score, Fair Value, Predictability, Altman Z, and Piotroski F are unavailable — the standard scoring providers do not cover NSE SME microcaps. Where a third-party score would normally appear, this page uses primary financial data and peer comparisons instead.

How to read this page

Onyx is an NSE SME microcap and reports half-yearly (H1 / H2), not quarterly. Currency is Indian Rupee (₹). One crore (Cr) is 10 million rupees, so revenue of ₹69.47 Cr is roughly ₹695 million. All figures shown here are standalone — the company is too small to file consolidated accounts. Where a term is technical, it is defined on first use, then used normally.

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1. Revenue, Margins, and Earnings Power

Revenue has compounded at roughly 11.6% per year over five fiscals — respectable but unspectacular for an SME pharma CMO. The shape that matters is not the growth line, it is the divergence between revenue (rising) and operating profit (collapsing in FY2026).

Reading the chart. Revenue rose every year except FY2023 (the COVID-tail correction), accelerated through the IPO year, and posted its highest absolute level ever in FY2026 — yet net income went negative for the first time. That is the textbook signature of margin compression overwhelming volume growth.

Margin profile

Operating margin is operating profit divided by revenue; for a contract manufacturer like Onyx, it captures how much of each rupee of customer billing survives after raw materials, labour, power, and factory overheads. The five-year arc shows the FY2026 break clearly.

Margins expanded steadily from FY2023 to FY2025 as Unit II (dry powder injections, cephalosporins) ramped and the WHO-GMP certification (May 2024) opened higher-value contracts. The FY2026 drop is not a small slip — it is a 1,187 basis-point swing in a single year (16.8% → 4.9%) with no offsetting volume tailwind to explain it. The company's MD&A points to raw-material inflation, customer pricing pressure, and under-absorbed fixed costs as production was reshuffled around the new high-speed carton line.

The H1 / H2 cadence — where the break actually shows

Annual numbers smooth the inflection. The half-yearly series shows that the operating-margin collapse landed in H1 FY2026, when OPM crashed from 14.6% to 2.7%, and only partially recovered in H2.

H2 FY2026 came in at 7.0% — better than H1 but still less than half the company's FY2025 average. The trajectory is bottoming, not recovering — the read is "stabilising at a much lower level," not "snapping back."

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2. Cash Flow and Earnings Quality

Free cash flow is the cash a business generates after paying for operations and capital expenditure. It is the only profit metric you can actually spend. For Onyx, the gap between reported net income and FCF has been the most important — and most under-discussed — feature of the financials.

Cash conversion has been weak for five straight years. Operating cash flow has trailed net income in every period — by a wide margin. In FY2025, the company reported ₹4.95 Cr of net income but only ₹1.42 Cr of CFO — a 29% cash-conversion rate. That means roughly seventy paise of every reported rupee of profit never showed up in the bank account. In FY2026 the gap goes the other way (loss above CFO loss), but the direction is the same: CFO is negative and FCF is deeply negative.

Note: FY2026's "conversion" ratio (7.1x) is mechanical — CFO is negative on a small net loss, so the ratio is meaningless. The honest read is that 2022–2025 cash conversion averaged roughly 21% — earnings were largely paper.

Where the cash leaked

The cash story is dominated by working capital absorption and a fixed-asset build cycle that ran from FY2023 to FY2024. The 2022–2026 period contains roughly ₹19 Cr of cumulative net income but ₹3.9 Cr of cumulative CFO and −₹32.4 Cr of cumulative FCF.

The FY2023 spike is the Unit II commissioning. The FY2026 capex bump (₹5.0 Cr) reflects the high-speed carton packaging line being built with IPO proceeds — that is the planned, disclosed use of funds, not a surprise. The issue is that the new capacity is not yet earning its keep: it is consuming working capital while the customer book is being seasoned.

Working-capital decomposition

Working capital tells the cash story in one frame.

Receivables tell the loudest story. Debtor days — how long customers take to pay — have more than doubled from 47 (FY2023) to 144 (FY2026). That means the company is effectively financing roughly five months of revenue for its customers. The customers (Mankind, Sun Pharma, Dr Reddy's, Aristo, Macleods) are large, creditworthy buyers, but they are using Onyx as a cheap working-capital source. The cash conversion cycle — the round-trip from cash spent on inventory to cash collected from customers — has climbed from 37 days to 119 days. That is the single biggest reason CFO never matches reported earnings.

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3. Balance Sheet and Financial Resilience

The IPO in November 2024 reset the balance sheet. Equity nearly tripled, and gross debt fell from ₹30.8 Cr to ₹12.5 Cr. The structure today is conservative — the question is whether it provides flexibility or just delays the inevitable.

Pre-IPO (FY2022–FY2024): debt-funded capex build, debt-to-equity ratio peaked at 1.6x in FY2023. Post-IPO (FY2025–FY2026): debt-to-equity at 0.22x — well below the Indian pharma SME median.

Coverage and resilience

Interest coverage (operating profit ÷ interest expense) has fallen from 8.9x to 2.8x. At the current run-rate of half-year operating profit (₹2.4 Cr in H2 FY26 against ₹0.66 Cr of half-year interest expense), the cushion is much thinner than the annual ratio suggests. The quick ratio (current assets less inventory, divided by current liabilities) at 2.1x looks comfortable — but that liquidity is mostly stuck in receivables, not cash. The IPO inflated current-asset balances faster than current liabilities, but the company still ran negative CFO in FY2026, which means the apparent liquidity is not converting.

The verdict on the balance sheet is "adequate, not bullet-proof." There is no immediate solvency risk — promoters can re-lever a clean balance sheet, the bank lines are intact, and the IPO cash has not all been spent. But the company is one year of FY2026-style operations away from needing to choose between (a) raising more debt, (b) tapping promoters, or (c) issuing equity again. Of those three, equity at ₹32 (1.05x book) is dilutive precisely when the business is least able to defend it.

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4. Returns, Reinvestment, and Capital Allocation

Return on capital employed (ROCE) is operating profit divided by the capital used to earn it (equity plus debt). It tells you whether the business compounds value or just grows the asset base.

FY2024–FY2025 ROCE of 12–13% was the brightest moment in Onyx's financial life — close to (but below) JBCHEPHARM's 25.8%, INNOVACAP's 15.0%, SENORES' 15.1%. The FY2026 collapse to 1.1% is not just a margin event; capital employed expanded (more capex, more receivables, more inventory) while operating profit shrank — both ends of the ratio moved the wrong way.

How management has used capital since the IPO

The IPO raised roughly ₹29 Cr of net proceeds (₹58 Cr issue minus expenses, minus dilution math); the use of those funds breaks down as: roughly two-thirds went into deleveraging, the rest into capex and working capital. No dividend, no buyback, no acquisition — pure operating use. That is the right call for a small CMO trying to compound, but it depends on the operating engine working, and FY2026 has called that into question.

Per-share economics

EPS halved in FY2024 as the share count tripled (₹13.3 lakh shares became ₹181.3 lakh shares — the bonus issue ahead of the IPO and then the IPO itself). Book value per share, the more meaningful denominator post-IPO, has held flat at ~₹30.6, which is exactly the level the stock trades at today. The market is paying ₹32 for ₹30.6 of book — almost no premium for the going-concern.

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5. Segment and Unit Economics

Onyx reports a single operating segment (pharmaceutical contract manufacturing) under Ind AS 108, so segment financials do not exist. What does exist is product-line and customer-concentration disclosure in the IPO RHP, which has been the most useful pseudo-segment view.

Sterile water is the legacy cash cow (capacity built over 15 years, six FFS machines, high-volume low-margin); dry powder injections and dry syrups (Unit II) are the new growth engines — higher margin per unit but smaller volumes, and the segment that needed WHO-GMP certification to access export markets.

Customer concentration

This is the segment view that actually matters for risk.

Concentration has moderated — top-5 share dropped 29 percentage points in two years — but top-10 still represents 71% of revenue. The customer list (Mankind, Sun, Dr Reddy's, Aristo, Macleods, Hetero, FDC, Reliance Life Sciences) is high quality, but those buyers have the negotiating leverage that shows up as 144-day debtor days. Concentration risk and working-capital risk are the same risk seen from two angles.

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6. Valuation and Market Expectations

Onyx is small enough that the standard valuation framework partly breaks. There is no sell-side coverage (analyst_estimates.json is empty), no consensus EPS, no Quality Score, no Fair Value gap from third-party scoring providers — those services do not maintain models on NSE SME microcaps. What is observable is the multiple stack as it stands today.

P/E is undefined because FY2026 net income is negative, so it cannot be used. On normalised FY2025 EPS of ₹2.73, the trailing P/E would be roughly 11.7x — a 60–75% discount to peers.

What the price implies

The stock appears to be discounting at least one of two scenarios:

1. A permanent margin reset. If 7% operating margin is the new normal, fair value sits near book; the current price is approximately fair.
2. An accounting-quality problem. If receivables have to be impaired (the 144-day debtor balance may include questionable receivables), book value itself shrinks, and even 1.05× book is too expensive.

Bear, base, bull frame

The bear case (5% OPM, growth continues) values the company at deep book value because the cash engine is broken. The base case (10% OPM, mid-range historical) approximately validates current price plus a modest 25% upside. The bull case (14% OPM, return toward FY2025 normalised levels) implies a near-double from today. None of these scenarios use peer multiples — they use Onyx's own historical earnings multiple of roughly 11.5x applied to scenario EPS.

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7. Peer Financial Comparison

The peer set is curated for business-model fit, not market cap — Akums, Cohance, Innova Captab, JB Chemicals, and Senores are the closest economic substitutes that listed Indian investors can actually buy. The mismatch in scale (Onyx is roughly 1% the size of any peer) is intentional — the comparison shows what investors are paying for quality of the financial engine, not for absolute scale.

Onyx's row is the only one with single-digit EBITDA margin and ROCE below 5%. Even Cohance — the lowest-quality peer on ROCE — earns 8.4% on capital and 27% EBITDA margins. The bull thesis here is that Onyx will move up the peer ladder as Unit II ramps and operating leverage kicks in; the bear thesis is that contract-manufacturing economics at sub-₹100 Cr revenue do not support peer-level margins because raw-material buying power, customer pricing power, and fixed-cost absorption all favour scale.

The peer cloud is concentrated at ROCE 14–26% and P/E 30–80x. Onyx is the outlier on both axes — the lowest ROCE and the lowest (normalised) P/E. A normalised P/E of 11.7x on FY2025 EPS is the most defensible argument the bulls have; everything else about the peer comparison favours waiting.

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8. Shareholder Structure and Float

Worth a note because it changes how the financial signals should be interpreted.

Promoter holding is unchanged at 65.10% — that is the single most positive signal in the entire ownership story. The promoters have not sold a share through the FY2026 margin shock. FII share has collapsed from 8.72% to 1.07% — that is the price the float has paid. Retail public has absorbed almost all of the FII selling. Float is now thin and retail-heavy, which means the equity will overshoot in both directions on any operating data point.

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9. What to Watch in the Financials

Closing read

The financials confirm three things: (1) Onyx has a real business with a respectable customer book, (2) the IPO genuinely repaired the balance sheet, and (3) the company can grow revenue. They contradict the bull narrative on (1) durability of margins — FY2025's 16.8% OPM was the cycle peak, not a baseline; (2) earnings quality — every rupee of net income has historically delivered roughly twenty paise of CFO; and (3) capital efficiency — ROCE has cratered to 1.1% even though the equity base just got bigger.

The first financial metric to watch is H1 FY2027 operating margin. A print above 10% would point to the FY2026 collapse being transitory, with the equity carrying 25–80% upside to the base/bull scenarios. A print below 5% would suggest the 7% in H2 FY26 was a head fake and that ₹32 (1.05× book) is still not cheap enough.