Cohance profit plunges 97% as operating margin drops to 7.36%
Revenue fell 25.58% year on year, while higher depreciation and a 10.2-point rise in the tax rate added to the pressure.
Filed 05 Aug 2026, 17:48 IST · after market close · Cohance Lifesciences Ltd (COHANCE)
Key takeaways
- Standalone net profit fell 97.32% year on year to Rs 1.41 cr as revenue declined 25.58%.
- Operating margin narrowed 14.19 percentage points year on year to 7.36% because expenses fell less than revenue.
- Other income accounted for 550.23% of profit before tax, making reported earnings quality weak this quarter.
Price around the results
Revenue contraction drove the sharp earnings decline
Cohance Lifesciences reported standalone results, with revenue down 25.58% year on year and 36.59% sequentially. Expenses declined 12.12% year on year and 26.07% sequentially, so the smaller reduction in costs did not offset the fall in revenue. Operating profit consequently dropped 74.58% year on year and 77.28% quarter on quarter.
Margin pressure has extended for a third quarter
Operating margin fell 14.19 percentage points year on year and 13.18 percentage points sequentially, as expenses declined more slowly than revenue. Depreciation increased 9.44% year on year, even though interest expense fell 68.82%. The margin has now declined for three straight quarters from 26.29% in Q2FY26 to 7.36% in Q1FY27.
Other income dominated a very small pre-tax profit
Other income was 550.23% of profit before tax, so the Rs 1.41 cr net profit was not generated mainly by operations. The year-on-year tax-rate increase of 10.2 percentage points also reduced the conversion of pre-tax profit into net profit, while the sequential tax-rate decline of 2.57 percentage points provided only limited relief. Operating margin was 16.46 percentage points below the 23.82% median for 40 Healthcare peers that had reported.
Management points to filings, facilities and order visibility
Management said the API+ business is targeting seven API filings in FY27 and that it had received a purchase order for a commercial product previously affected by destocking. The company said the new amidites facility is complete and product qualification has started, while expansion of the US facility is progressing for larger clinical requirements and future scale-up. Management also said NJ Bio expects to build next year's order book as its upcoming facility becomes operational, but flagged FTE contract risk and the need for progressive operational normalisation at the Nacharam formulation facility.
Results were filed after market close; past reactions skew negative
The results were filed after market close, so there was no market reaction to report yet. After the previous eight results, the stock rose twice and fell six times, with a median absolute move of 5.85%, including declines of 5.85%, 10.02% and 8.81% among the latest recorded moves.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹360 cr | ₹568 cr | -36.59% | -25.58% |
| Other income | ₹12 cr | ₹-17 cr | — | +143.20% |
| Expenses | ₹333 cr | ₹451 cr | -26.07% | -12.12% |
| Operating profit | ₹26 cr | ₹117 cr | -77.28% | -74.58% |
| Operating margin (%) | 7.36% | 20.54% | — | — |
| Interest | ₹2 cr | ₹5 cr | -58.99% | -68.82% |
| Depreciation | ₹34 cr | ₹38 cr | -8.87% | +9.44% |
| Profit before tax | ₹2 cr | ₹56 cr | -96.08% | -96.89% |
| Tax | ₹1 cr | ₹22 cr | -96.34% | -95.67% |
| Net profit | ₹1 cr | ₹35 cr | -95.92% | -97.32% |
| EPS (₹) | ₹0.04 | ₹0.90 | -95.56% | -97.10% |
Operating margin of 7.36% compares with a Healthcare sector median of 23.82% across 40 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- NJ Bio completed five GMP bioconjugation batches and delivered an end-to-end ADC drug product for a Phase I programme.
Guidance & outlook
- The API+ business is targeting seven API filings in FY27.
- NJ Bio expects to build its order book for next year as its upcoming facility becomes operational.
Expansion
- Expansion of the US facility is progressing to support larger clinical requirements, validation readiness and future scale-up.
- The new amidites facility is complete and product qualification has commenced.
New orders
- API+ received a purchase order for the commercial product previously affected by destocking.
- Sapala executed a significant order for a European clinical-stage biotechnology company.
New initiatives
- A Strategic Business Unit is being established to focus on growth programmes.
- The company is working to replace coal with bio-briquettes as a green fuel at its remaining sites.
Problems & risks
- NJ Bio faces some FTE contract risk this year.
- The Nacharam formulation facility requires progressive operational normalisation during FY27.
What to watch
- Whether operating margin recovers from 7.36% after three consecutive quarterly declines.
- Progress toward the seven API+ filings targeted by management for FY27.
- Whether the amidites facility moves from product qualification into commercial contribution.