Cohance Lifesciences Trough behind; stabilization signals emerging but we await more tangible delivery

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

06 August 2026

Cohance Lifesciences

Trough behind; stabilization signals emerging but

we await more tangible delivery

Neutral

COHA.NS, COHANCE IN

Price (05 Aug 26):Rs429.45

▲Price Target (Sep-27):Rs490.00

Prior (Mar-27):Rs440.00

1QFY27 was expectedly weak with revenue at Rs4.2bn (-23% YoY, +5% vs JPMe)

and profitability materially softer (adj EBITDA margin 0.9%) on operating

deleverage. Management guides to recovery from 2Q and a return to growth from

2H, supported by order reloads and restocking; we see these as early signs of

stabilising customer confidence. However, execution remains the key debate:

despite differentiated capabilities, Cohance’s ability to deliver consistently at scale

and deepen trust with large global customers is still to be proven. Near-term,

management’s focus on narrowing the NJ Bio loss profile is the right priority, and

the clearer roadmap to full ownership of Sapala is constructive. We would look for

more tangible delivery over the next few quarters to turn more constructive,

especially given high operating leverage and the potential for a sharp earnings

uplift on volume recovery. We cut FY27/28E by ~20%/2%; PT Rs490 (40x Sep28E), Maintain Neutral.

1QFY27 was expectedly weak: Revenue of Rs4.2bn (+5% vs JPMe) declined

23% YoY, with higher-than-expected Pharma CDMO revenues offsetting

softness in API+ and specialty chemicals. Gross margin was 71.5% (-152bps

YoY and +614bps QoQ), while adj. EBITDA margin came in at 0.9% (2260bps YoY and -2061bps QoQ), pressured by negative operating leverage

and higher freight costs linked to the Middle East crisis. Adj. EBITDA declined

97% YoY to Rs38mn, resulting in an adj. net loss of Rs220mn, driven by higher

D&A and interest expense.

Pharma CDMO positioned for a sequential rebound from 2Q and a return

to YoY growth in 2H: 1Q performance was soft (Rs1.2bn, -39% YoY, -55%

QoQ), driven primarily by shipment phasing rather than a deterioration in

underlying demand. Management noted that deliveries that slipped from 1Q

are now back on track, with two recently commercialised molecules expected

to start contributing from 2Q/3Q.…