Synopsis: Cohance Lifesciences shares plunged 8% after reporting an 81% YoY fall in Q3 FY26 PAT, impacted by revenue decline, margin compression, customer-led inventory destocking, and regulatory disruptions at its Nacharam facility. Revised FY26 guidance and continued transition pressures further dampened investor sentiment despite management’s long-term recovery outlook.
The shares of this company, which provides services to top global pharmaceutical and fine chemical majors on their respective NCE development initiatives, from process research and development to late-stage clinical and commercial manufacturing, had its shares tumble after the company reported muted results.
With the market cap of Rs 12,525 crore, the shares of Cohance Lifesciences Ltd have crashed about 8% and reached a low at Rs 319.20, compared to their previous day’s closing price of Rs 350.60. The shares are trading at a PE of 41.7, whereas its industry PE is at 29.6.
About the Q3 FY26 Result highlights
The revenue from operations for the company stood at Rs 545 crore when compared to Rs 676 crore in Q3 FY25, falling by about 19 per cent on a YoY basis and on a QoQ basis falling by 2 per cent from Rs 556 crore in Q2 FY26.
The PAT fell by about 81 per cent on a YoY basis when you compare the Q3 FY26 profit at Rs 29 crore to Rs 153 crore in Q3 FY25 and on a QoQ basis has fallen 56 per cent from Rs 66 crore in Q2 FY26.
Operational performance
The figures from Cohance Lifesciences’ Q3 and 9M results for FY26 represent a transition phase for the company, and from an analysis of the figures, there is substantial pressure on profitability and operating momentum. The company has witnessed a decline in its consolidated revenues by 6.7% YoY in 9MFY26, while its adjusted EBITDA has fallen by 43.4%, and PAT by 61.4%. There has been a substantial decline in profitability while maintaining its gross margins.
At a segment level, Pharma CDMO revenue declined by 12.7% YoY due to inventory destocking and timing issues driven by the customer, while API+ revenue declined by 7.9% YoY due to shipment and remediation-related delays, primarily from the Nacharam formulation site. In terms of the most recent quarter, Q3 revenue declined by 19.5% YoY, and adjusted EBITDA declined by a massive 67.7%, accentuating the high volatility in revenue and earnings streams from reliance on CDMO drawdowns.
Additionally, the stress on the market following the above-mentioned regulations added to the pressure on the firm. The firm has received a warning letter after an OAI status at the Nacharam plant, resulting in deferred shipments of around Rs 55 crores during the period. Nevertheless, the firm has clarified that the growth is not structural but rather merely due to the mix, albeit the revenue guidance has seen a revision to an early-to-mid double-digit decline in FY26, along with FY27 being another year of transition in some segments.
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