Cohance Lifesciences announced its Q2 and H1 FY26 results. Q2 revenue declined by 8% year-on-year to ₹5,556 million, while H1 revenue grew by 1.2% to ₹11,049 million. Despite lower volumes, gross margins improved to 74.6% in Q2 and 73.8% in H1. The company reaffirms its target of achieving $1 billion in revenue by 2030, with mid-30s EBITDA margins, focusing on science platforms and operational efficiency.
Q2FY26 Financial Performance
Revenue for Q2 stood at ₹5,556 million, representing an 8% decline year-on-year. This was primarily due to deferred shipments at CDMO and FDF sites and destocking of some key molecules, as well as the timing of project starts, particularly at NJ Bio. Adjusting for de-stocking, the quarter shows a growth of 14% year-on-year.
Gross margins improved significantly to 74.6%, up from approximately 71.3% in the same quarter last year. This improvement was attributed to a favorable business mix, enhanced efficiency, and better yield.
Adjusted EBITDA for the quarter reached ₹1,289 million, yielding an adjusted EBITDA margin of 23.2%. This margin reflects lower volumes and upfront investments in employee costs, along with certain transition and remediation expenses.
H1FY26 Financial Performance
Revenue for the first half of the year was reported at ₹11,049 million, a modest increase of 1.2% year-on-year. The low growth was mainly due to deferred shipments at the CDMO and FDF sites and the timing of project initiations, particularly at NJ Bio. When adjusted for de-stocking, the growth for the first half is reported at 20% year-on-year.
Gross margins for H1 improved to 73.8%, compared to approximately 70% in the same period last year. This was driven by similar factors as the quarterly improvement: business mix, efficiency, and yields.
Adjusted EBITDA for the period was ₹2,630 million, lower due to phasing toward the second half of the year. It reflects lower volumes and upfront investments in employee costs, along with specific transition and integration costs. Adjusted EBITDA margins were at 23.8%.
Key Business Highlights
An innovator partner, for whom Cohance supplies four intermediates for a Phase III drug, recently received US FDA approval for the drug.
A significant Phase II order was successfully executed for a leading global innovator, with engagement increasing and further discussions on numerous fronts, including long-term agreements.
Good momentum in both Agrochemicals and Performance/OLED sectors continues, reflecting a gradual recovery.
Sturdy business development at CPHI Frankfurt 2025, with multiple new leads from Europe and Japan currently under evaluation.
Large innovators are increasingly focusing on supply-chain de-risking, while niche modalities such as ADCs and Oligos continue to gain prominence, underscoring the growing recognition of Cohance’s differentiated technology platform.
Pharma destocking and delayed reloads impacted near-term growth.
Slowdown in biotech funding has led to project shipments being pushed by 2-3 quarters at NJ Bio.
Given deferred shipments from the first half, new commercial project wins, and audit clearances, the company expects the second half to perform better than the first.
Outlook
The company reaffirms its goal of achieving $1 billion (₹85 billion) in revenue by 2030, with mid-30s EBITDA margins.
Source: BSE
