Cohance Lifesciences Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Cohance Lifesciences delivered a resilient Q1 FY26, marking its first full quarter as a unified platform. While reported CDMO growth was muted by inventory de-stocking in two large commercial molecules, the underlying business showed robust momentum, particularly in niche modalities like ADCs and Oligonucleotides. Management is aggressively investing in global capacity and leadership to hit its ambitious 2030 growth targets.

Highlights

  • Reported revenue growth of 13% YoY, driven by Specialty Chemicals and API segments.

  • Pharma CDMO segment grew over 30% YoY when excluding the temporary impact of inventory de-stocking.

  • Niche technology revenue share (ADCs, Oligos) increased to over 20% in Q1 FY26, up from mid-teens in FY25.

  • Generated strong free cash flow of ₹230 crores (INR 2.3 billion) with a closing cash balance of ₹440 crores (INR 4.4 billion).

  • Committed $10 million investment for a dedicated CGMP bioconjugation suite at the Princeton facility (NJ Bio).

  • Nacharam Oligonucleotide facility (₹23 crore investment) is on track to be fully operational by end of CY 2025.

  • Reiterated long-term guidance of reaching $1 billion (₹8,500 crores) revenue by 2030 with mid-30s EBITDA margins.

Concerns

  • Inventory De-stocking

Key financials

  1. Revenue Growth 13% +13%YoY
  2. Free Cash Flow ₹230 Cr
  3. Cash Balance ₹440 Cr
  4. CAPEX ₹55.9 Cr
  5. Niche Tech Revenue Share 20%

What they filed

Q1 FY27: revenue down 25.6%, net profit down 97.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue594 653 769 484 498 −16%482 −26%568 −26%360 −26%
EBITDA204 233 223 104 131 −36%103 −56%117 −48%26 −75%
Net profit139 154 123 53 94 −32%47 −69%35 −72%1 −97%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Pharma CDMO
    1% Reported Revenue Growth30% Adjusted Revenue Growth
  • API Plus
    90% Revenue Growth
  • Specialty Chemicals
    28% Revenue Growth

Guidance & targets

Revenue

  • Total Revenue Revenue · by 2030 · High confidence $1 billion (₹85 billion)
    We reiterate our FY'26 guidance, and we continue to maintain our long-term guidance of reaching USD1 billion, INR 85 billion in 2030.

    — Himanshu Agarwal, CFO

  • Niche Technology Revenue Share Revenue · by end of FY26 · High confidence mid-20s
    Our niche technology revenue share has risen from the high teens in FY '25 to above 20% in Q1 FY '26 and is on track to approach the mid-20s by the end of FY '26.

    — Vivek Sharma, Executive Chairman

Margin

  • EBITDA Margin Margin · medium term · Medium confidence mid-30s
    As we scale-up further, our medium-term plans to achieve mid-30s EBITDA margins remain intact.

    — Himanshu Agarwal, CFO

Capacity

  • Oligonucleotide Facility Operationality Capacity · by end of CY '25 · High confidence Fully operational
    Our CGMP oligonucleotide building block facility at Nacharam... is expected to be fully operational by the end of CY '25.

    — Vivek Sharma, Executive Chairman

Other

  • API Product Validations Other · FY26 · High confidence 7 to 8
    We have validated 2 new products in API and are also on track for 7 to 8 new product validations and subsequent regulatory filings.

    — Dr. Prasada Raju, Managing Director

Risks & concerns

  • Inventory De-stocking

    high

    Two large commercial molecules are currently undergoing de-stocking, which significantly muted reported Pharma CDMO growth in Q1.

    Management acknowledged

  • One-time M&A and ESOP Expenses

    medium

    Significant non-operating expenses related to talent acquisition, legal services for M&A, and ESOP charges are impacting EBITDA margins.

    Analyst acknowledged

  • Geopolitical/Tariff Risks

    low

    Management believes Pharma is largely exempt and their FOB contract terms protect them from direct liability.

    Both downplayed

Areas of evasion (2)

  • Specific organic growth percentage for FY26
  • Detailed breakdown of the $660m revenue gap to 2030

Q&A highlights

1 direct, 1 evasive
Organic vs Inorganic Growth for FY26 Evasive
For us, the organic and inorganic are two sides of the same coin. It is about capital allocation... I would urge you guys to kind of think about it in the way we look at and not separating it as an organic or inorganic.

Management declined to provide a specific organic growth target for the current fiscal year, focusing instead on their M&A-led strategy.

Asked by Shyam Srinivasan

US Tariff Exposure and Supply Chain Direct
Most of our current agreements with the customers are on FOB basis. We do not have the liability to pay the tariffs, when the goods reach the shore of U.S.

Clarifies that the company has minimal financial exposure to potential US trade tariffs due to contract structures and product classification (intermediates vs APIs).

Asked by Avnish Burman

Bridge to $1 Billion Revenue Target Partial
Dhawal, honestly, you know, we could go for an hour on this particular subject... I am genuinely struggling as to where to start and where to end the answer to this question.

Highlights the massive scale-up required (from ~$335m to $1bn) and management's reliance on high-growth niche technologies to bridge the gap.

Asked by Dhawal Khut

2 min read 5 chapters

Detailed narrative

Strategic Pivot to Niche Modalities

Cohance is aggressively positioning itself in high-value, complex modalities such as Antibody-Drug Conjugates (ADCs) and Oligonucleotides. The niche technology segment already accounts for over 20% of revenue and is growing faster than the core CDMO business. The $10 million investment in NJ Bio's Princeton facility and the ₹23 crore investment in the Nacharam Oligo suite are critical steps to capture the 'China Plus One' and 'EU Plus One' diversification trends.

Inventory De-stocking Masks Underlying Growth

The reported 1% growth in Pharma CDMO is deceptive due to inventory de-stocking in two major commercial molecules. Management highlighted that excluding this impact, the segment grew by over 30% YoY. This de-stocking is described as a 'year phenomenon,' suggesting that while it may persist in the near term, the underlying demand from innovator partners remains robust.

Financial Discipline and Capital Allocation

The company maintains a strong balance sheet with ₹440 crores in cash and generated ₹230 crores in free cash flow during the quarter. Management views organic and inorganic growth as interchangeable tools for capital allocation, signaling a continued appetite for value-accretive acquisitions to add capabilities or geographical presence.

Global Expansion and Leadership Strengthening

Cohance is expanding its front-end capabilities in the US, Europe, and Japan, recently adding experienced CDMO professionals and forming an External Advisory Board of industry stalwarts. The appointment of Yann D’Herve as CEO of the CDMO business, bringing 30 years of experience, is a strategic move to align the organization with its $1 billion global ambition.

API Plus and Specialty Chemicals Recovery

The API Plus segment delivered a standout 90% growth, driven by a focus on matured products with cost leadership and lifecycle management for innovators. Meanwhile, the Specialty Chemicals segment is seeing a sequential recovery in AgChem, with Performance Chemicals expected to ramp up significantly in the second half of the fiscal year.

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