1.At a Glance
Cohance is riding the CDMO wave harder than a biotech bro at an FDA approval party. It just posted13% YoY revenue growthin Q1 FY26, expanded margins, and announced new facility investments — but also dropped a YoY PAT decline thanks to cost creep and a less-than-stellar quarter in profits. With aP/E of 109, the market is clearly convinced it’s the next Divi’s Labs… or it’s had too much pharma Kool-Aid.
2.Introduction
In pharma land, being aContract Development & Manufacturing Organisation (CDMO)is like being the backstage crew of a rock concert — you don’t sing, but without you, the show can’t go on. Cohance plays in that space, helping global innovators with everything from early-stage R&D to commercial manufacturing.
It’s one of thetop 5 providers of high-end intermediatesin India, which sounds glamorous until you realise 100% of promoter holding is pledged — meaning the backstage crew might also have a small loan problem.
3.Business Model (WTF Do They Even Do?)
Cohance operates in theCRAMSspace (Contract Research & Manufacturing Services), focused on:
- NCE Development– process R&D for new chemical entities.
- Late-stage & commercial manufacturing– scaling up from lab batches to industrial scale.
- Speciality Intermediates– high-value intermediates for innovators.
- Oligonucleotide Manufacturing– shiny new ₹230 mn cGMP facility in Hyderabad for advanced therapeutics.
Customers? Global pharma majors and fine chemical leaders. It’s high-margin, high-barrier work, but also high-dependence on a few large clients.
4.Financials Overview
| Metric | Latest Qtr (Q1 FY26) | YoY Qtr (Q1 FY25) | Prev Qtr (Q4 FY25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 549.31 | 488.00 | 840.00 | 12.55% | -34.61% |
| EBITDA (₹ Cr) | 112.00 | 125.00 | 229.00 | -10.40% | -51.09% |
| PAT (₹ Cr) | 46.40 | 75.00 | 117.00 | -38.13% | -60.34% |
| EPS (₹) | 1.28 | 2.96 | 4.73 | -56.76% | -72.94% |
Annualised EPS = ₹1.28 × 4 = ₹5.12
→ P/E ~192on annualised weak-quarter earnings (TTM P/E ~109).Commentary: Revenue’s steady YoY, but profits took a beating. This is not a “smooth pharma compounder” quarter — more like an experiment that yielded lower-than-expected yield.
5.Valuation (Fair Value RANGE only)
Method 1: P/E
- Sector average for speciality CDMOs: 30–35×.
- EPS annualised (weak Q1) = ₹5.12 → FV range by P/E = ₹154 – ₹179.
- EPS annualised (TTM strong base) ≈ ₹12.50 → FV range = ₹375 – ₹438.
Method 2: EV/EBITDA
- TTM EBITDA ~₹563 Cr, EV/EBITDA average ~15–18×.
- EV range = ₹8,445 – ₹10,134 Cr → Per share FV range ≈ ₹220 – ₹265.
Method 3: DCF (10% discount, 12% growth)
- FV ~₹450 – ₹500.
Educational FV Range:₹154 – ₹500(Purely educational; not a buy/sell — if you lever your house on this, blame your broker.)
6.What’s Cooking – News, Triggers, Drama
- USFDA inspection completed— major compliance de-risking.
- ₹230 mn Hyderabad oligonucleotide facility– capacity 700 kg/year; high-value,
