The Multi-Year Acquisition Spree Meets Reality

The CDMO That Bought Everything, Then Everything Broke

Let’s talk about Cohance Lifesciences. It is a Hyderabad-based CDMO — a Contract Development and Manufacturing Organization. You know, the companies that make drugs for other pharma companies but don’t sell them directly. High-margin. Complex. Unglamorous. Perfect for a contrarian thesis. Until it wasn’t.

For five years, Cohance was the darling of Indian biotech — acquiring smaller CDMO players, integrating them, promising scale, delivering growth. Then came FY26. Destocking in pharma CDMO. A Warning Letter from the USFDA. Biotech funding tightness. And suddenly the multiple quarters of pre-announced “growth is coming in H2” evaporated into earnings cuts and analyst downgrades.

Stock down 75% in one year. From ₹1,250 to ₹288 in 12 months. Not because the company failed. But because assumptions failed. Assumptions that destocking would clear in Q1. That new commercial molecules would ramp immediately. That the FDA inspection wouldn’t result in a Warning Letter. All wrong. All at once.

The concall in February 2026 was a masterclass in managing expectations downward: “FY26 is a transition year.” Translation: We were wrong. But management still holds the thesis: FY27 will return to growth. Guided by what evidence? Deep customer engagement. Strong late-stage pipeline. Operational fixes. And mostly, hope.

You Make the Drug. We Make the Components. Or At Least, We Did.

Cohance operates across three segments. Pharma CDMO (the main event): contract manufacturing of intermediates for new chemical entities (NCEs), in early and late-stage development. Specialty Chemicals: custom synthesis for agrochemicals, OLED materials, photochromic coatings. API Plus: Active Pharmaceutical Ingredients, finished formulations, generics.

In Q3 FY26, the breakdown looked like this: Pharma CDMO contributed roughly 37% of revenue (down from historical 72% before acquisitions). Specialty Chemicals at 22%. API Plus at 37%. Three equal pillars, except one pillar (Pharma CDMO) was cracking.

The company operates 14 manufacturing sites across India, the US, and Europe. Seven are USFDA/EU approved. The reactor capacity stands at 1,800+ KL. Pipeline: 9 molecules in Phase III development, 16 patented commercial molecules in supply. ADC payloads (high-margin, high-complexity), oligonucleotides, specialty APIs — all cutting-edge. Except when they’re not cutting edge. When they’re just… cutting.

Customer base: 50+ clients including 14 of the top 20 global pharma companies. Revenue: 80-87% from regulated markets (US, EU). Exposure: heavily dependent on pipeline progression, customer inventory management, and FDA compliance. All three were unfriendly in FY26.

Q3 FY26: The Collapse Nobody Saw Coming (Or Everyone Did)