Margin rebounds QoQ, but remains far below peers
Revenue rose +12.88% QoQ as expenses grew +4.79%, but YoY contraction and a tax-driven profit kept earnings quality weak.
Filed 06 Nov 2026, 17:48 IST · after market close · Cohance Lifesciences Ltd (COHANCE)
Key takeaways
- Consolidated operating margin recovered 7.15 percentage points QoQ to 7.42%, but remained 14.28 percentage points below the Healthcare peer median.
- Revenue fell -14.21% YoY while expenses rose +1.53%, cutting operating profit -70.75% and net profit -96.58%.
- Net profit of Rs 2.27 cr was flattered by a Rs 13.02 cr tax credit after a pre-tax loss of Rs 10.75 cr.
Price around the results
QoQ recovery does not offset the YoY decline
Consolidated revenue rose +12.88% QoQ, with expenses growing only +4.79%, lifting operating margin by 7.15 percentage points. The YoY comparison was weaker: revenue fell -14.21% while expenses increased +1.53%, driving a 14.35-percentage-point margin contraction. Management said Specialty Chemicals declined YoY because of lower AgChem volumes, pricing pressure and programme phasing, while Formulations improved in Q2 on higher commercial activity and product-development programmes.
Tax credit masked a pre-tax loss
Operating profit remained below depreciation, while interest also increased +24.18% QoQ, leaving the company with a consolidated pre-tax loss of Rs 10.75 cr. A tax credit of Rs 13.02 cr produced net profit of Rs 2.27 cr and a tax rate of 121.12%, so reported net profit was not supported by pre-tax operating earnings. Other income represented -115.44% of pre-tax profit because pre-tax profit was negative.
Margin recovery remains well below peers
The 7.42% operating margin was 14.28 percentage points below the 21.7% median for 85 Healthcare peers that had reported the quarter, placing Cohance sixth from the bottom. The margin has now recovered from 0.27% in Q1FY27, but remains below 15.94% in Q4FY26, 17.51% in Q3FY26 and 21.77% in Q2FY26.
Management points to a stronger H2
Management said H2FY27 revenue and EBITDA are expected to grow YoY as Cohance capabilities are integrated, with Small Molecule deliveries, API+ resilience and Sapala growth supporting a stronger H2 than H1. It also said API+ expects margin improvement from order-book conversion, pricing discipline, product mix and cost optimisation. Management said it plans to expand Flow Chemistry and Peptide capabilities over the next 12–24 months and announce capex for adjacencies and R&D.
Filed after market close
The consolidated results were filed after market close on 6 Nov 2026, so there is no current trading response to assess. In the eight-result reaction history, the stock rose twice and fell six times, with a median absolute move of 5.85%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹477 cr | ₹422 cr | +12.88% | -14.21% |
| Other income | ₹12 cr | ₹12 cr | +1.31% | -20.45% |
| Expenses | ₹441 cr | ₹421 cr | +4.79% | +1.53% |
| Operating profit | ₹35 cr | ₹1 cr | +2950.00% | -70.75% |
| Operating margin (%) | 7.42% | 0.27% | — | — |
| Interest | ₹8 cr | ₹7 cr | +24.18% | -4.45% |
| Depreciation | ₹50 cr | ₹50 cr | +1.27% | +13.97% |
| Profit before tax | ₹-11 cr | ₹-43 cr | +74.92% | — |
| Tax | ₹-13 cr | ₹2 cr | — | — |
| Net profit | ₹2 cr | ₹-45 cr | — | -96.58% |
| EPS (₹) | ₹0.40 | ₹-0.63 | — | -79.38% |
Operating margin of 7.42% compares with a Healthcare sector median of 21.70% across 85 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Formulations improved strongly in Q2, supported by higher commercial activity and product-development programmes.
Guidance & outlook
- H2FY27 revenue and EBITDA are expected to grow year over year as Cohance capabilities are integrated.
- H2FY27 is expected to be stronger than H1, driven by Small Molecule deliveries, API+ resilience and Sapala growth.
- API+ expects H2 margin improvement through order-book conversion, pricing discipline, better product mix and cost optimisation.
Expansion
- The company plans to expand Flow Chemistry and Peptide capabilities organically and inorganically over the next 12–24 months.
- The company plans to expand capacities and improve assets for customers, including new capacity.
- The company plans to announce capex for capabilities in adjacencies and R&D.
New initiatives
- One Cohance integration is driving operational and commercial progress across the businesses.
Problems & risks
- Specialty Chemicals declined year over year due to lower AgChem volumes, pricing pressure and programme phasing.
What to watch
- Whether operating margin holds above 7.42% after the 7.15-percentage-point QoQ recovery.
- H2 revenue and EBITDA against management's stated YoY-growth expectation, following the -14.21% YoY revenue decline in Q2FY27.
- Whether the Rs 13.02 cr tax credit and 121.12% tax rate normalise in the next quarter.