Cohance Lifesciences Q1 FY27 Results: Revenue Declines 23.1% YoY Amidst Strategic Realignment
Cohance Lifesciences reported Q1 FY27 revenue of INR 4,223 million, a 23.1% YoY decline. Adjusted EBITDA was INR 92 million (2.2% margin). The company expects growth to return in H2 FY27, driven by Pharma CDMO recovery and Sapala's performance. Free cash flow was INR 1,063 million, with cash reserves at INR 4,589 million. Strategic focus on integrating Sapala's nucleic acid business.
The revenue decline and reduced profitability in Q1 FY27 have a notable impact on the company's short-term financial performance. However, the positive outlook for H2 FY27 and strategic investments in growth areas like the Sapala acquisition suggest potential for future recovery and growth, moderating the overall impact.
The company reported a significant year-on-year decline in revenue and EBITDA, indicating a challenging quarter. However, the outlook for the second half of the fiscal year is positive, with strategic initiatives aimed at future growth. The financial performance is mixed, leading to a neutral sentiment.
Cohance Lifesciences Limited (formerly Suven Pharmaceuticals Limited) has announced its unaudited financial results for the quarter ended 30 June 2026 (Q1 FY27). The company reported a 23.1% year-on-year decline in revenue to INR 4,223 million. This decrease was attributed to shipment phasing in Pharma CDMO, a softer contribution from Agrochemicals, lower Formulations revenue, and timing of execution across the portfolio. However, this was partly offset by strong growth at Sapala and resilient API performance.
The company's strategic initiatives include building an integrated nucleic-acid business with a clear path to full ownership of Sapala, and repositioning Agrochemicals towards an innovator-product-led portfolio. The Pharma CDMO segment is expected to recover with scheduled commercial deliveries and a secured restocking order. The focus in ADCs is on an integrated payload-linker-bioconjugation offering and improved utilization at NJ Bio, while nucleic acid capabilities are being unified around Sapala.
The API+ segment, despite a 10.4% YoY decline, remains resilient with a healthy order book, supported by niche APIs and cost competitiveness. Specialty Chemicals revenue declined by 34.7% YoY, largely due to expected H2-dominated phasing of products in AgChem. Gross margins contracted to 71.5% YoY, and Adjusted EBITDA for Q1 FY27 was INR 92 million, with margins at 2.2%, reflecting lower revenue, negative operating leverage, and subsidiary consolidation impact from NJ Bio.
Looking ahead, Cohance Lifesciences expects sequential improvement from Q2 and growth to return in H2 FY27, supported by recovery in Pharma CDMO, order-backed growth in Sapala, stability in API+, and normalization in formulations. EBITDA improvement is also weighted towards the second half of the fiscal year.
The company maintained a healthy liquidity position with free cash flow of INR 1,063 million generated during the quarter, and cash on books standing at INR 4,589 million. Capex deployed was INR 598 million. The balance sheet remains resilient and net cash positive as of 30 June 2026. The company is also enhancing its stake in Sapala Organics, having acquired a 67.5% stake for ₹258 crore in July 2024, with plans to increase ownership for a fully integrated nucleic-acid business.
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