Revenue more than doubled, but costs cut Cohance profit 19% YoY
A sequential margin recovery was not enough to offset the sharp YoY cost increase, while management said FY26 growth would be flattish.
Filed 17 Jul 2026, 15:04 IST · Cohance Lifesciences Ltd (COHANCE)
Key takeaways
- Revenue rose 115.57% YoY, but expenses grew 182.75%, pulling operating margin down 18.59 percentage points.
- Sequential operating margin improved 1.38 percentage points as revenue grew 1.14% and expenses fell 0.61%, while the tax rate dropped 5.32 percentage points.
- The stock fell 8.81% on the reaction day and 15.66% after five sessions, far exceeding its 2.71% median move after the last eight results.
Price around the results
Revenue growth did not translate into higher profit
Cohance’s consolidated revenue increased 115.57% YoY to Rs 555.57 cr, but net profit fell 19.02% to Rs 66.39 cr. Expenses grew 182.75%, absorbing the benefit of scale; interest also rose 424.55% and depreciation 159.55%. Sequentially, the picture improved, with revenue up 1.14%, expenses down 0.61% and net profit up 43.08%.
Margin recovered sequentially, but remained well below last year
Operating margin rose 1.38 percentage points QoQ because costs did not grow with revenue, but it was still down 18.59 percentage points YoY. The tax rate fell 5.32 percentage points QoQ, which supported the sequential profit increase, while other income contributed 18.62% of pre-tax profit. That makes the quarter’s reported profit less dependent on operating earnings than the headline revenue growth suggests.
Two-quarter margin recovery still leaves Cohance below peers
Operating margin has recovered from 18.30% in Q4FY25 to 20.39% in Q1FY26 and 21.77% in Q2FY26, reversing the earlier decline but remaining below 40.36% in Q2FY25. Cohance’s margin was 3.17 percentage points below the 24.94% median for 48 Healthcare peers that had reported the quarter. It ranked 14th from the bottom on this measure.
Management cited destocking and delayed shipments
Management said pharma destocking, delayed reloads of several Phase 2–3 molecules, the Nacharam plant shutdown and slower biotech funding affected near-term growth. It said FY26 revenue growth is expected to be flattish and that second-half performance should be better than the first half because of deferred shipments, new commercial wins and audit clearances. Management also said it expects growth to return in FY27, while maintaining longer-term guidance of US$1 billion revenue and mid-30s EBITDA margins.
The market reaction was unusually negative for this stock
The stock fell 8.81% on the reaction day, with volume at 6.93 times the usual level, and the decline reached 15.66% after five sessions. That response was much larger than Cohance’s 2.71% median absolute move after its last eight results, which were split evenly between four rises and four falls.
Q2FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY26 | Q1FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹556 cr | ₹549 cr | +1.14% | +115.57% |
| Other income | ₹16 cr | ₹6 cr | +157.00% | +10.48% |
| Expenses | ₹435 cr | ₹437 cr | -0.61% | +182.75% |
| Operating profit | ₹121 cr | ₹112 cr | +7.98% | +16.29% |
| Operating margin (%) | 21.77% | 20.39% | — | — |
| Interest | ₹9 cr | ₹10 cr | -13.95% | +424.55% |
| Depreciation | ₹44 cr | ₹45 cr | -2.48% | +159.55% |
| Profit before tax | ₹84 cr | ₹63 cr | +33.48% | -15.81% |
| Tax | ₹17 cr | ₹16 cr | +6.23% | -0.80% |
| Net profit | ₹66 cr | ₹46 cr | +43.08% | -19.02% |
| EPS (₹) | ₹1.94 | ₹1.28 | +51.56% | -39.94% |
Operating margin of 21.77% compares with a Healthcare sector median of 24.94% across 48 peers that have reported Q2FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -8.81% | -8.83% |
| Next session | -10.78% | — |
| 5 sessions | -15.66% | -16.88% |
| 15 sessions | -20.41% | — |
| 30 sessions | -22.11% | — |
Volume on the results session was 6.93× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company had nine active Phase 3 programmes, with four expected to enter commercial supply within 12–18 months.
Guidance & outlook
- FY26 is expected to deliver flattish revenue growth year over year.
- The company expects second-half FY26 performance to be better than the first half.
- The company expects growth to return in FY27 through new wins, existing business, restocking and CDMO reloads.
- The company maintains its longer-term guidance of US$1 billion revenue and mid-30s EBITDA margins.
Expansion
- The company plans capability investments in an OEB-6 block, GMP oligo lab, Sapala analytical infrastructure and debottlenecking capacity.
- The company plans to expand capacities and improve assets for customers.
New orders
- The company received an order from a new partner for an adjacent payload.
New products
- The company expects five FDF launches in FY26, with 11 additional projects under development.
New initiatives
- The company is executing an organization upgrade programme built around five capability pillars to support its 2030 vision.
Competition
- The company is working with all 20 of the top 20 global innovators.
Problems & risks
- Pharma destocking and delayed reloads of several Phase 2–3 molecules are affecting near-term growth.
- The Nacharam plant shutdown caused FDF shipment delays while awaiting audit clearance.
- Slower biotech funding has pushed NJ Bio project shipments back by two to three quarters.
What to watch
- Whether operating margin extends its recovery from 21.77% after two sequential increases.
- Whether other income remains near its 18.62% share of pre-tax profit.
- Progress on the four Phase 3 programmes that management said were moving towards commercial supply within 12–18 months.