Cohance Lifesciences Ltd

Rating action

• CRISIL withdrew ratings on Cohance Lifesciences' lower-limit facilities (Rs 72.5 crore).
• Ratings migrated to India Ratings for higher-limit facilities; remains in force.
• Withdrawal does not impact existing facilities or borrowing arrangements.
• Issuer not cooperating; Crisil withdrew ratings.
• Previously Crisil AA-/Positive; ratings now Withdrawn.
• Long-term rating: Crisil BB/Stable; short-term rating: Crisil A4+; both withdrawn.
• Consolidated entities: Cohance Lifesciences, Sapala Organics, Cohance Pharma, NJ Bio.
• 2026 operating income Rs 2,268.55 crore; PAT Rs 150.12 crore.
• PAT margin 6.62%; debt/adjusted net worth 0.04x; interest coverage 12.38x.
• USFDA Form 483 observations noted at Pashamylaram facility.
• Crucial note: Crisil combined business/financial risk profiles with Cohance group.
• Consolidation rationale: common management, similar operations, fungible cash flow.

Disposal under Reg 29(2) – Cohance Lifesciences

• Target Company: Cohance Lifesciences Limited.
• Disclosing Party: DSP Trustee Private Limited (non-promoter) for DSP Mutual Fund, DSP AIF, DSP Global Funds ICAV.
• Transaction Type: Disposal of voting rights in Cohance Lifesciences Limited.
• Pre-Transaction Holding: 1,63,97,069 shares (4.29%).
• Transaction Details: Sold 28,99,996 voting shares (0.76%), Open Market on Aug 07, 2026.
• Post-Transaction Holding: 1,34,97,073 shares (3.53%).
• Share Capital Context: Pre- and post-transaction equity capital 38,25,97,330 shares; no change.

Meeting Details

• Date: 5 August 2026; time not disclosed.
• Type: group earnings call; Mode: virtual.
• Event/organiser: Cohance Lifesciences Q1 FY27 Earnings Conference Call.

Participants

• Executive Chairman & Group CEO
• CEO, Pharma CDMO
• CEO, API+
• CEO, Specialty Chemicals
• Chief Financial Officer
• Company Secretary & Compliance Officer
• Head, Integrated Nucleic Acid Business (Sapala)
• Moderator

Purpose

• Discuss Q1 FY27 results; provide outlook and strategic updates.

Additional Notes

• Transcript of the earnings conference call is available.

Meeting Details

• Held on 5 August 2026 (Wednesday) for quarter ended 30 June 2026.
• Conference call; audio recording uploaded to company website.
• Organizer: Cohance Lifesciences Limited (formerly Suven Pharmaceuticals Limited).
• Purpose: earnings/results discussion and investor interaction.

Participants

• Key company participant: Company Secretary & Compliance Officer.

Purpose

• Earnings/results discussion and general investor interaction.

Additional Notes

• Recording of the call available as audio on the company website.

USFDA inspection outcome

• USFDA inspected Cohance Hyderabad facility (Pashamylaram) from July 27 to August 5, 2026.
• Form FDA 483 issued with five observations; none relate to data integrity.
• CAPA plan to be prepared and submitted within the regulatory timeline.
• Facility FEI No. 1000623515 located at Pashamylaram, Hyderabad.
• Observations are addressable and the company will work with USFDA to resolve them.

Business Overview

• Core business includes Pharma CDMO, API+, and Specialty Chemicals; Sapala Organics is a nucleic-acid platform.
• Strategic shift to integrate nucleic-acid business and increase Sapala ownership.
• Aims to unify Sapala with Cohance across chemistry, development, manufacturing, and supply.

Operational Highlights

• Q1 FY27 revenue INR 4,223 Mn, down 23.1% YoY due to shipment phasing.
• Standalone business remained strong; Sapala growth 2.5x YoY; API+ resilient.
• Sapala orders from global innovators support growth; 10-molecule Phase III progress.
• Free cash flow INR 1,063 Mn; cash INR 4,589 Mn; net cash INR 2,512 Mn.
• Capex spent INR 598 Mn; capex intensity 14.2% of revenue.

Financial Performance

• Consolidated revenue INR 4,223 Mn; Adjusted EBITDA INR 92 Mn; margin 2.2%.
• Gross margin 71.5%; YoY contraction 150 bps.
• Standalone EBITDA margin 9.2%; consolidated EBITDA 2.2% due to subsidiary mix.
• PAT adjusted negative INR 430 Mn; PAT reported negative INR 452 Mn.
• Balance sheet: net cash 2,512 Mn; cash 4,589 Mn; gross borrowings 2,077 Mn; shareholders’ funds 38,948 Mn.

Capital Structure & Liquidity

• Net cash position maintained; resilience after integration and capacity expansion.
• Total borrowings rose; liquidity remains healthy with strong internal accruals.
• FY25-FY27 capex indicates ongoing Sapala, NJ Bio, Nacharam investments.

Strategic Priorities & Outlook

• FY27: Growth year, weighted to H2; recovery in Pharma CDMO and Sapala.
• Sapala ownership to increase; end-to-end nucleic-acid platform.
• Nacharam amidites facility expansion; expand oligonucleotide capabilities.
• ADC payloads and AgChem programs to strengthen late-stage pipeline.
• EBITDA improvement anticipated in H2 from volumes, mix, utilization.

Risks & Mitigation

• CDMO project timing remains lumpy; quarterly results may vary.
• FTE contract risk at US NJ Bio; plan to secure repeat business.

Governance & Leadership

• Dr. P. Y. Reddy to lead unlocking the nucleic-acid business through FY29.
• Continues as Sapala CEO; cross-entity leadership for growth.
• Enhancing Sapala stake to enable broader value-chain participation.

Financial Highlights

• Revenue from operations ₹4,223 million, down 23.1% YoY.
• Gross margins 71.5%, vs 73.0% in Q1FY26.
• CDMO contribution 38% of revenue.
• Adjusted EBITDA ₹92 million; standalone EBITDA margin 9.2%.
• Standalone revenue ₹3,599 million; standalone EBITDA ₹332 million; margin 9.2%.
• Sapala revenue ₹274 million; NJ Bio revenue ₹350 million with EBITDA loss.
• Capex ₹598 million in the quarter.
• Consolidated net cash ₹2,512 million as of 30 June 2026.

Strategic Initiatives

• Building one integrated nucleic-acid business with Sapala ownership path.
• Repositioning Agrochemicals toward an innovator-product-led portfolio.
• One Cohance culture to unify capabilities, safety, quality, accountability, and customer focus across the business.

Operational Highlights

• Two recently commercialised molecules scheduled for delivery in Q2 and Q3.
• Restocking order secured for a commercial molecule; visibility through Q4 FY27 and FY28.
• One product advanced to Phase III; RFQ pipeline strengthened.
• ADCs: payload, payload linker and bioconjugation progress; customised payload order for Q2.
• Nucleic acids shipments commenced; Sapala integration progressing with GMP validation.
• API+: validation orders for more grades; two CEP approvals; two Korean DMFs filed.
• Formulations performance softer; Nacharam remediation ongoing as planned.
• Performance Materials and Agrochemicals progressing; H2 phasing and Japanese registrations.

Quality, Sustainability & Governance

• OTIF 100% year-to-date across Pharma CDMO and API networks.
• EcoVadis Gold Rating upgraded from Silver to Gold.
• British Safety Council International Safety Award 2026 (Merit) awarded to API and CDMO sites.

Outlook & Guidance

• Q2 improvement expected; return to YoY growth in H2 supported by secured orders.
• Delivery schedule and late-stage progress underpin near-term growth.

Financial highlights

• Consolidated revenue from operations ₹4,223 mn; YoY -23.1%.
• Consolidated total income ₹4,345 mn.
• Standalone revenue ₹3,599 mn; EBITDA ₹332 mn; EBITDA margin 9.2%.
• Sapala revenue ₹274 mn; NJ Bio ₹350 mn; niche tech 15.1% of revenue.
• Consolidated adjusted EBITDA ₹92 mn; margin 2.2%.
• Standalone net cash ₹2,512 mn; cash on books ₹4,589 mn; capex ₹598 mn.
• EPS (standalone) ₹0.04 basic and diluted.
• Standalone net profit ₹1.41 cr.

Outlook & strategy

• FY27: growth year, H2 weighted; sequential improvement from Q2.
• EBITDA improvement expected in H2 due to volume and mix.
• Sapala stake expansion: 21% post-FY27; 100% by 2030.
• Dr P Yella Reddy to lead nucleic acid business.
• Integration across Sapala and Cohance; One Cohance nucleic-acid capability.

Sapala reorganization & stake expansion

• Reorganization at Sapala to unify nucleic-acid platform.
• Cohance to own 100% Sapala by 2030; after 21% increase post FY27.
• Dr P. Yella Reddy to continue as Sapala CEO through Mar-2029.
• Sapala FY27 growth outlook remains strong with confirmed orders.

Liquidity & capex

• Net cash positive; consolidated net cash ₹2,512 mn as of 30 Jun 2026.
• Capex in Q1 ₹598 mn; ongoing capability expansion at Nacharam.
• Balance sheet resilient; cash balance supports growth initiatives.

Meeting Details

• Date and time: 5 August 2026 at 6:30 PM IST.
• Type and mode: group virtual conference call for investors and analysts.
• Organiser: Cohance Lifesciences Limited.

Participants

• Key company participants: Senior management team.

Purpose

• Discuss Q1 FY27 unaudited results; interactive Q&A.