Cohance Lifesciences (COHANCE) Q3 25/26 earnings summary

Executive summary

• FY26 was a transition year marked by performance below expectations due to timing and product mix impacts, customer-led delays, regulatory challenges, and portfolio mix changes.

• No customers or orders were lost; customer engagement and order metrics remain healthy, with new wins from large innovator clients.

• Leadership and organizational restructuring completed, with strengthened teams in BD, Quality, Regulatory, R&D, and Operations.

• Technology-led platforms remain differentiated; current softness is attributed to timing and product mix, not structural issues.

• Board approved unaudited standalone and consolidated financial results for Q3 and nine months ended December 31, 2025, reflecting a transition year post-merger and leadership changes.

Financial highlights

• Nine-month FY26 revenue declined 6.7% year-on-year to INR 16.5 billion; Q3 FY26 revenue dropped 19.5% to INR 5,446 million.

• Gross margin improved by 204 bps to 72.8% year-on-year, aided by product mix and acquisitions.

• Adjusted EBITDA for nine months fell 43% to INR 3,477 million, with margins at 21.1%; Q3 margin at 15.6%.

• Free cash flow of INR 1.75 billion generated in nine months; capex at INR 1.61 billion.

• Standalone Q3FY26 net profit was INR 47.29 crore; consolidated net profit was INR 29.02 crore.

Outlook and guidance

• FY26 revenue outlook revised to an early to mid-double-digit decline.

• Growth expected to resume in FY27, driven by pipeline recovery, new product launches, and capacity commissioning.

• Management remains cautious on providing specific FY27 growth guidance, pending further validation.

• Long-term margin guidance of 30%+ remains intact, with short-term pressure attributed to mix and timing.

• FY27 anticipated as a transition year with stronger momentum post-qualification conversions.