Cohance Lifesciences Limited (NSE: COHANCE) is a global contract research, development, and manufacturing organization focused on innovator partnerships. The company reported a 19.5% year-on-year decline in consolidated revenue for the quarter ended December 31, 2025, as inventory de-stocking and timing shifts impacted commercial drawdowns. Shares of Cohance traded lower on the day, implying a market capitalization of about ₹17,112 crore. This performance comes as the company navigates a transition phase following its recent merger completion.
Quarterly Results
For the third quarter of FY26, reported revenue from operations was ₹5,446 million, down from ₹6,762 million in the prior-year. Adjusted Profit After Tax (PAT) declined 87.3% to ₹211 million, while reported PAT stood at ₹367 million. Gross margins for the quarter were 70.8%, a decrease from 72.1% in Q3 FY25. Adjusted EBITDA compressed by 67.7% to ₹847 million, with margins falling to 15.6% from 38.7%. Segmental revenue for Pharma CDMO declined to ₹2,105 million, while API+ generated ₹2,654 million.
Annual Performance Context
In the first nine months of FY26, consolidated revenue reached ₹16,494 million, a 6.7% year-on-year decrease. Adjusted PAT fell 61.4% to ₹1,513 million. Despite lower revenue, gross margins for the nine-month period improved to 72.8% from 70.8%, supported by favorable product mix and subsidiary consolidation. Adjusted EBITDA for the nine-month period was ₹3,477 million, down 43.4% from ₹6,148 million in 9M FY25. Adjusting for inventory de-stocking of two commercial products, underlying 9M revenue growth was 9.3%, driven by specialty chemical sales.
Business and Operations Update
Operations were impacted by customer-led inventory normalization and patent-expiry-driven volume moderation in mature products. The Nacharam formulation facility faced disruption following an Official Action Indicated status and subsequent Warning Letter, leading to ₹55 crore in shipment deferrals. The company deployed ₹1.61 billion in capital expenditure, primarily toward the Nacharam Oligonucleotide facility and Suryapet capacity expansion. Net fixed assets reached ₹35,291 million as of the end of the period. The consolidated balance sheet remained net cash positive at ₹1.75 billion.
Forward Outlook
Management revised its FY26 revenue guidance to an early-to-mid double-digit decline, citing incremental timing effects. The company characterizes FY26 as a transition and bottoming phase. A return to revenue growth is expected in FY27 as customer programs advance and commercial conversions accelerate. Strategic priorities include scaling Antibody-Drug Conjugate and oligonucleotide platforms. A $10 million US expansion is underway to support ADC supply by FY27. The company supports nine Phase III molecules, with four expected to enter commercial supply within eighteen months.
Performance Summary
Cohance Lifesciences’ results reflect a cyclical business downcycle influenced by inventory adjustments and regulatory timing. Revenue and profitability declined during the quarter and nine-month periods, though company maintained a net cash positive position and improved gross margins. Management remains focused on execution to reach targets.