Cohance Lifesciences (COHANCE) Q1 24/25 earnings summary

Executive summary

• Positive industry tailwinds for CDMO, with strong customer sentiment towards India and increased RFQ inflows, especially in mid- to late-phase projects and commercial opportunities.

• Strategic focus on expanding the customer base in the US, Europe, and Japan, deepening R&D engagement, and a robust phase III pipeline; management's focus on business development and R&D is yielding increased and more diverse RFQs.

• Sapala acquisition (51% stake) completed, expanding into oligonucleotide building blocks; integration and customer engagement underway.

• Cohance merger process advanced, with regulatory approvals from stock exchange and SEBI; NCLT hearing pending, expected completion in 7-10 months.

• Consolidated revenue from operations for Q1 FY25 was ₹230.69 crore, with net profit at ₹60.77 crore; standalone net profit was ₹65.08 crore.

Financial highlights

• Q1 FY25 revenue declined 34% year-on-year to ₹230.69 crore; free cash flow of INR 33 crore; cash and bank balance at INR 864 crore.

• Gross margins improved by 157 bps YoY; adjusted EBITDA margin at 38%, adjusted PAT margin at 28%.

• CapEx for the quarter at INR 27.4 crore, including INR 22 crore for R&D center at Genome Valley; Suryapet block under validation.

• Cohance Q1 revenue at INR 252 crore (+10% YoY), adjusted EBITDA margin 20%; API Plus business grew 22% YoY.

• Consolidated EPS for the quarter was ₹2.39 (not annualised); standalone EPS was ₹2.56.

Outlook and guidance

• Growth expected in H2 FY25 for both pharma CDMO and AgChem segments; full-year revenue and EBITDA growth anticipated, with further acceleration from FY26.

• Aim to double the combined business organically over five years, with M&A as a growth accelerator.

• The company is pursuing strategic acquisitions and amalgamations, including Sapala, Cohance, and Casper Pharma.