Cohance Lifesciences Limited — Q4 FY25 earnings call

Call held 28 May 2025

Management summary

Cohance Lifesciences (formerly Suven Pharma) completed its formal merger and rebranding, positioning itself as a technology-led CDMO platform. While FY25 was a foundational year of integration and strategic acquisitions (NJ Bio, Sapala), the company delivered steady 9% growth. Management is guiding for an acceleration in FY26, targeting double-digit revenue growth despite temporary margin pressure from ongoing investments.

Highlights

  • Full year FY25 revenue reached $335 million with a 9% YoY growth rate.

  • FY25 EBITDA margin stood at 34%, though Q4 adjusted EBITDA margin dipped to 31.3% due to business mix and acquisition integration.

  • Pharma CDMO segment was the primary growth driver, expanding 18% YoY.

  • Commercial molecules increased to 16 (from 10) and the Phase III pipeline expanded to 9 molecules (from 2).

  • Generated Rs. 3.6 billion in free cash flow, maintaining a cash balance of Rs. 2.9 billion.

  • Management set a long-term vision to become a $1 billion revenue company by 2030.

Key financials

2 periods

Headline

  • Revenue
    $335 Mn
    YoY +9%
  • EBITDA Margin
    34%
  • Free Cash Flow
    ₹3.6 Bn

Q4

  • Revenue Growth
    20%
    YoY +20%
  • Adjusted EBITDA Margin
    31.3%

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
    18% Revenue Growth9 molecules Phase-3 Pipeline
  • API+
    9% Revenue Growth9 products Product Validations
  • Specialty Chemicals
    0 sequential recovery Performance Trend

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence in the teens
    I think it would be certainly in the teens. So, we will define as to what it is. I don't want to get into early teens or mid-teens at this stage.

    — Himanshu Agarwal, CFO

Margin

  • EBITDA Margin Margin · FY26 · High confidence low 30s
    we expect our EBITDA margins to be in the low 30s in FY '26. The midterm target remains in the mid-30s with scale.

    — Prasada Raju, Managing Director

Capex

  • Total CAPEX Capex · FY26 · Medium confidence Rs. 350 crore
    I think our sense is that it will still be in the range of around Rs. 350 crore as a total CAPEX for FY '26.

    — Himanshu Agarwal, CFO

Market context

  • Global Revenue Revenue · by 2030 · Low confidence $1 billion
    We remain focused on our vision of $1 billion global revenue by 2030, which is primarily driven by a diversified growth strategy built on three key pillars

    — Vivek Sharma, Executive Chairman

Risks & concerns

  • Inventory De-stocking

    medium

    Customers for a few commercial molecules are pausing orders for FY26 to adjust inventory levels.

    Management acknowledged

  • Lower Margin from New Acquisitions

    medium

    NJ Bio currently operates at a lower EBITDA margin than the group average, dragging down consolidated margins during integration.

    Both acknowledged

  • Lumpy Nature of CDMO Industry

    low

    Quarterly performance can be volatile due to shipment timings; annual trends are better indicators.

    Management acknowledged

Areas of evasion (2)

  • Specific therapeutic categories for the 9 Phase-3 molecules (cited CDAs).
  • Specific revenue growth percentage beyond 'teens'.

Q&A highlights

2 direct
Rationale for Sapala and NJ Bio Acquisitions Direct
Rationale for acquisition of Sapala and NJ Bio... we wanted to expand our capabilities on technology and both ADCs and Oligo are fast growing capabilities... investment in these capabilities have allowed us to enter and expand our tab.

Explains the strategic shift toward high-growth, complex modalities like Antibody Drug Conjugates (ADCs) and Oligonucleotides.

Asked by Mehul Panjuani

Commercialization Timeline for Phase-3 Pipeline Partial
But right now the guidance we are giving is one product, four projects getting into commercial and we are hoping that others will also follow soon.

Provides visibility into the near-term revenue conversion of the expanded R&D pipeline.

Asked by Mehul Panjuani

EBITDA Margin Compression in FY26 Direct
I think EBITDA margin is a temporary decline... predominantly I would say that there is a business mix that is there which will play... There is also an NJ Bio which we are integrating... It does come with a lower EBITDA than the average.

Clarifies that the margin dip is due to integration costs and business mix rather than structural profitability issues.

Asked by Shyam Srinivasan

2 min read 5 chapters

Detailed narrative

Strategic Transformation into a Global CDMO Platform

Cohance Lifesciences has successfully transitioned from Suven Pharmaceuticals into an integrated technology-led CDMO. The company has institutionalized three core business units: Pharma CDMO, API+, and Specialty Chemicals. Management highlighted that FY25 was a foundational year, focusing on the integration of NJ Bio and Sapala Organics to bolster capabilities in high-growth modalities like ADCs and oligonucleotides.

Pharma CDMO Pipeline Shows Significant Expansion

The Pharma CDMO segment grew 18% YoY, driven by a substantial increase in the project pipeline. Commercial molecules grew from 10 to 16, while the late-stage Phase III pipeline expanded from 2 to 9 molecules. Management expects one major product with four intermediates to enter commercial production in FY26, providing a clear path for near-term growth.

Temporary Margin Headwinds in FY26

Management guided for EBITDA margins in the 'low 30s' for FY26, a step down from the 34% achieved in FY25. This compression is attributed to the integration of NJ Bio (which has lower margins), investments in talent and infrastructure ahead of the growth curve, and inventory de-stocking by certain customers. However, the mid-term target remains in the mid-30s as operating leverage kicks in.

Specialty Chemicals Recovery Underway

After a challenging first half of FY25 due to macro-environmental factors, the Specialty Chemicals segment saw a sequential recovery in Q4. Management established a dedicated business unit for this segment and expects it to be one of the 'three engines of growth' firing in FY26, supported by increased customer interactions and new project RFQs.

Aggressive CAPEX and M&A Strategy

The company plans to spend approximately Rs. 350 crore on CAPEX in FY26, primarily for NJ Bio's expanded bioconjugation facility in the U.S. and GMP capabilities at Sapala. Management remains open to a 'programmatic M&A approach' to continue scaling niche capabilities, supported by a strong net cash balance sheet and Rs. 3.6 billion in annual free cash flow.

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