Cohance Lifesciences (COHANCE) Q2 24/25 earnings summary

Executive summary

• Revenue grew 12% year-on-year in Q2 FY25, driven by 40% growth in Pharma CDMO and Sapala acquisition; gross margins expanded 473 bps due to business mix and consolidation effects.

• Strategic focus on expanding customer relationships, global platform integration, and leveraging technology in small molecules, ADCs, and oligonucleotides.

• Leadership changes include appointment of Vivek Sharma as Chairman and a new CCO; business development teams expanded in US, EU, and Asia.

• First ESG report released, with new accreditations and sustainability initiatives underway; received ISO 22301 and ISO 50001 certifications and PSCI supplier partner status.

• Merger with Cohance Lifesciences progressing, with shareholder meeting scheduled for November 28, 2024.

Financial highlights

• Q2 FY25 consolidated revenue: INR 2.58 billion (up 12% YoY); adjusted EBITDA: INR 1.11 billion (margin 43.3%); adjusted PAT: INR 878 million (margin 34.1%).

• H1 FY25 consolidated revenue: INR 4.88 billion; adjusted EBITDA: INR 1.99 billion (margin 40.7%); adjusted PAT: INR 1.53 billion (margin 31.3%).

• Gross margins expanded to 79.8% in Q2 FY25 and 76.3% in H1 FY25.

• Free cash flow in H1 FY25: INR 1.1 billion; cash and bank balance at INR 6.56 billion as of September 2024.

• CapEx in H1 FY25: INR 694 million, mainly for R&D and plant expansion.

Outlook and guidance

• Growth outlook for FY25 maintained; H2 expected to outperform H1, with full-year growth at combined platform level.

• Further growth acceleration anticipated from FY26; aim to double combined business in five years, with M&A as a growth accelerator.

• Pharma CDMO and API++ segments expected to sustain growth, with shipment schedules skewed towards H2.