Cohance Lifesciences (COHANCE) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 was weak as anticipated, with revenue and EBITDA declines due to shipment phasing, unfavorable product mix, negative operating leverage, and subsidiary consolidation, but standalone business remained strong and net cash positive.

• Strategic focus areas include integrating nucleic acid capabilities (Sapala), advancing towards full ownership of Sapala, expanding amidites and oligonucleotide offerings, and repositioning Agrochemicals to an innovator-led portfolio.

• Pharma CDMO recovery is expected in H2, supported by scheduled deliveries, restocking, and a strengthened late-stage pipeline; ADC and nucleic acid capabilities are unified for growth.

• API+ segment maintained resilience through niche APIs, cost competitiveness, and a healthy order book; Specialty Chemicals is positioned for H2 growth and long-term repositioning in AgChem and performance materials.

• Management prioritizes customer conversion, predictable delivery, quality, safety, and platform utilization.

Financial highlights

• Q1 FY27 consolidated revenue was INR 4,223 Mn, down 23.1% YoY, mainly due to shipment phasing and lower contributions from Agrochemicals and Formulations; Sapala and API+ showed resilience.

• Gross margin contracted to 71.5% (down 150 bps YoY), impacted by product mix and lower high-margin Pharma CDMO contribution.

• Adjusted EBITDA was INR 92 Mn (2.2% margin), reflecting lower revenue, negative leverage, and NJ Bio subsidiary loss; standalone adjusted EBITDA margin was 9.2%.

• Adjusted PAT was a loss of INR 430 Mn; free cash flow of INR 1,063 Mn generated; cash on books at INR 4,589 Mn; capex of INR 598 Mn deployed.

• Niche technology contributed 15.1% of revenues.

Outlook and guidance

• Sequential improvement expected from Q2, with growth returning in H2 FY27, supported by Pharma CDMO recovery, Sapala order-backed growth, and normalization in Formulations.

• Margin and EBITDA improvement anticipated in H2, driven by volume recovery, better product mix, and improved utilization.

• API Plus and Sapala expected to drive sustainable double-digit growth over the medium term.

• ADC payloads, AgChem, and performance chemicals to strengthen late-stage pipeline and growth beyond FY27.