Detailed Narrative
FY26 Financial Performance Overview
Cohance Lifesciences reported a total revenue of INR 2,268 crores for FY26, marking a 13% year-on-year decline. Adjusted EBITDA stood at INR 477 crores, resulting in an EBITDA margin of 21%, while standalone adjusted EBITDA margin was 24.6%. Despite the revenue decline, gross margin remained robust at 70.8%, supported by product mix and backward integration. The company generated INR 173 crores in free cash during FY26.
Segmental Performance and Challenges
The Pharma CDMO business recorded revenues of INR 889 crores for FY26, experiencing an underlying early single-digit growth after adjusting for destocking impacts in two large commercial molecules. The API+ business saw an 8% YoY decline in revenue to INR 1,088 crores, affected by product-specific factors and temporary disruption at the Nacharam site. Specialty Chemicals reported a marginal 2.1% YoY decline to INR 291.3 crores, influenced by customer program phasing and regulatory timing.
Outlook and Guidance for FY27
Management anticipates Q1 FY27 to be weak in both revenue and EBITDA, with revenue schedules skewed towards the second half of the fiscal year. A potential impact of 100-150 bps on gross margins is expected in Q1 FY27 due to Middle East geopolitical uncertainties and raw material inflation. Growth and EBITDA improvement are projected to become visible from H2 FY27, driven by volume recovery, improved order conversion, and product mix normalization. The company plans a capex of nearly INR 300 crores for FY27.
Strategic Priorities and New Leadership Vision
Mr. Umang Vohra, the new Executive Chairman and Group CEO, emphasized Cohance's strong foundation in science and differentiated capabilities in ADCs and oligonucleotides. His immediate priorities include focusing on operational rigor, deepening customer relationships, and strengthening the science engine. The long-term vision involves creating a strategic blueprint for sustainable value creation, focusing on predictability of delivery, strong quality systems, and a deep talent pool.
Pipeline Development and Commercialization
Cohance's total Phase 3 pipeline now comprises 10 programs, with two molecules having recently moved into commercialization. Orders for four intermediates related to one new commercial drug are expected to contribute revenue in Q2 and Q3 FY27. The company continues to expand its ADC capabilities, including a $10 million capex at the NJ Bio US facility for scale-up and validation readiness, though NJ Bio's profitability is expected to take over two years.
Operational Improvements and Risk Mitigation
The company is actively managing supply chain continuity through alternate site strategies and closer customer coordination. Remediation actions at the Nacharam formulation site are strengthening quality and operating systems, leading to improved utilization. Efforts are also underway to diversify the customer base and reduce concentration risk, with a strong funnel of new projects in small molecules.