Cohance Lifesciences Share Crashes 9% After Weak Q4 Results; What Led to the Profit Decline?

Synopsis: The share of this CDMO and API company declined sharply after weak Q4 FY26 earnings, operational disruptions, and a brokerage downgrade raised concerns over delayed earnings recovery and business slowdown.

The share of this company, which is a prominent, Hyderabad-based global Contract Development and Manufacturing Organisation (CDMO) formed through the integration of companies like RA Chem Pharma, ZCL Chemicals, and Avra Laboratories.

With a market capitalization of Rs 17,497 crore, Cohance Lifesciences Ltd’s shares hit a day low of Rs 443.15 per share on Wednesday, down 8.7 percent from the previous day’s close of Rs 485.75 per share. The share of this company has given a negative return of 12 percent over the last five years.

Results Overview

QoQ View: The revenue from operations grew by 13.6 percent to Rs 619 crore in Q4 FY26 from Rs 545 crore in Q3 FY26 (Dec 2025). EBIDT saw a slight growth of 3.5 percent to Rs 98.7 crore from Rs 95.4 crore in the previous quarter. However, net profit saw a sharp decline of 71.3 percent to Rs 8.31 crore from Rs 29.0 crore, which led to an EPS reduction of 46.9 percent to Rs 0.51 per share from Rs 0.96 in Q3

YoY View: The revenue from operations decreased by 26 percent to Rs 619 crore in Q4 FY26 (Mar 2026) from Rs 840 crore in Q4 FY25 (Mar 2025), and EBIDT decreased by 57 percent to Rs 98.7 crore in Q4 FY26 from Rs 229 crore in Q4 FY25. This was accompanied by a net profit decline of 87 percent to Rs 8.31 crore in Q4 FY26 from Rs 117 crore in Q4 FY25, resulting in an EPS decrease of 89 percent to Rs 0.51 per share in Q4 FY26.

Fiscal year comparison: Revenue increased by 89.40 percent to Rs 2,269 crore in FY26 from Rs 1,198 crore in FY25. Operating margin declined by 38.71 percent to 19 percent in FY26 compared to 31 percent in FY25. Profit before tax fell by 39.83 percent to Rs 207 crore in FY26 from Rs 344 crore in FY25, while net profit declined by 43.40 percent to Rs 150 crore compared to Rs 265 crore in FY25.

What led to the profit decline in Q4?

CDMO Business Impacted by Destocking: The company’s profitability during FY26 was impacted by inventory destocking in two large commercial molecules within its Pharma CDMO business. As a result, Pharma CDMO revenue stood at Rs 889 crore, with the destocking activity alone affecting revenue by nearly Rs 260 crore during the fiscal year.

Shipment Delays and Operational Disruptions: The API Plus segment also witnessed pressure during FY26, with revenue declining by 8 percent YoY to Rs 1,088 crore. The decline was primarily due to shipment delays and temporary operational disruptions. Additionally, issues at the Nacharam formulation facility led to an estimated revenue loss of around Rs 61 crore during the year.

Pressure on Revenue and Margins: Overall earnings remained under pressure during FY26 as consolidated revenue declined by 13 percent YoY to Rs 2,268 crore. Adjusted EBITDA stood at Rs 477 crore, while EBITDA margins came in at 21 percent. The combined impact of destocking, shipment delays, and facility disruptions weighed on overall profitability during the fiscal year.

Brokerage View

Jefferies downgraded Cohance Lifesciences Limited to “Underperform” from “Hold” and cut its target price to Rs 300 from Rs 340, implying nearly 38.2 percent downside from the previous close, citing weak Q4 performance, broad-based business slowdown, management instability, and delayed earnings recovery expectations.

Weak Q4 Performance Weighed on Sentiment: Jefferies downgraded Cohance Lifesciences Limited following a weaker-than-expected Q4 performance. The brokerage noted that the company’s quarterly results came in significantly below its estimates, raising concerns regarding near-term earnings visibility and execution across key business operations.

Broad-Based Slowdown Across Segments According to Jefferies, all major business divisions reported YoY declines during the quarter, reflecting a broad-based slowdown in the company’s operating performance. Weakness across multiple segments indicated softer demand conditions and operational challenges, impacting overall growth momentum.

Management Churn Raises Concerns: The brokerage also highlighted elevated management churn as a key concern for investors. Frequent leadership changes are expected to impact execution stability and may delay operational improvements, creating uncertainty around the company’s medium-term recovery outlook and strategic direction.

Recovery Expected Only From H2 FY27 Jefferies believes the company’s earnings recovery may begin only from the second half of FY27. In view of slower growth expectations and ongoing operational challenges, the brokerage reduced its FY27 and FY28 EPS estimates by 14 percent to 17 percent, reflecting a more cautious outlook on future profitability.

About the Company

Cohance Lifesciences is a Hyderabad-based, technology-driven global Contract Development and Manufacturing Organization (CDMO) and API platform, officially rebranded in mid-2025. Backed by Advent International, it focuses on high-value niche technologies like antibody-drug conjugates (ADCs), oligonucleotides, and specialty chemicals

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