Cohance Lifesciences (COHANCE) Q1 24/25 earnings summary

Executive summary

• Strong momentum in RFQs across pharma CDMO and AgChem, with a healthy mix of mid- to late-phase projects and new customer additions in the US, Europe, and Japan; RFQs in Pharma CDMO doubled YoY in Q1.

• Strategic focus on deepening the R&D pipeline and expanding product categories, with seven molecules in phase III translating to 13 intermediates.

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

• Merger with Cohance Lifesciences progressing, with regulatory approvals received and NCLT hearing pending; expected completion in 7–10 months.

• Positive customer sentiment towards India due to supply chain de-risking and favorable industry macros, supporting medium to long-term growth outlook.

Financial highlights

• Q1 FY25 revenue declined 34% year-over-year to INR 2,307 million; free cash flow of INR 331 million; cash and bank balance at INR 8,640 million.

• Gross margin improved by 157 bps YoY to 72.4%; adjusted EBITDA margin at 38%, adjusted PAT margin at 28%.

• Reported EBITDA margin for Q1 at 35.5% due to a one-time cost of INR 55.7 million (stock factoring).

• CapEx for the quarter at INR 274 million, including investment in the Genome Valley R&D center.

• On a pro forma basis, combined Suven and Cohance Q1 FY25 revenue at INR 4,827 million, gross margin 67.3%, adjusted EBITDA INR 1,360 million (28.3% margin), adjusted PAT INR 840 million.

Outlook and guidance

• Growth expected in the second half of FY25, with full-year revenue and EBITDA growth anticipated for both Suven and Cohance.

• Q2 expected to see muted growth; full-year guidance remains unchanged.

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

• Pharma CDMO and API Plus segments expected to drive growth; Ag Chem/Spec Chem recovery expected from H2 FY25.