Financial Performance Overview

  • Consolidated Revenue: ₹4,223 million for Q1 FY27, representing a 23% year-on-year decline
  • Gross Margin: 71.5% compared to 73% in Q1 FY26, primarily due to product mix and lower contribution from high-margin Pharma CDMO business
  • Adjusted EBITDA: ₹92 million with margin of 2.2%
  • Capital Expenditure: Approximately ₹598 million during the quarter
  • Net Cash Position: Consolidated net cash of approximately ₹2,512 million as of 30 June 2026

Segment-wise Performance Breakdown

Pharma CDMO Business (Yann D'Herve)

  • Revenue declined 38.7% year-on-year in Q1 FY27 due to customer shipment phasing
  • Two molecules recently moved into commercial supply with deliveries scheduled across Q2 and Q3 FY27
  • Received restocking order for one commercial molecule that faced destocking last year, providing visibility for Q4 FY27 and FY28
  • Expanded participation with existing biotech customer from KSM supply to API order for Phase 2 program
  • Commercial OTIF remained at 100% year-to-date
  • Commercial vs development share: 57%:43%

ADC Payload Business

  • Customized ADC payload order on schedule for delivery in Q2 FY27
  • Recent products MMAE and Exatecan receiving good market traction
  • Another customer audit completed successfully, expected to support additional payload order

NJ Bio Subsidiary

  • Revenue: ₹350 million, lower than corresponding period last year
  • Adjusted EBITDA loss: ₹328 million
  • Operationalized additional GMP manufacturing laboratory at Princeton
  • Another GMP ADC batch released during the period
  • Immediate focus on delivering committed batches and securing FTE program renewals

Oligonucleotides (Sapala Subsidiary)

  • Revenue: ₹274 million, representing 2.5x year-on-year growth
  • Supply commenced on specialized nucleic acid building blocks program during Q1 FY27
  • Dr. P.Y. Reddy agreed to lead combined nucleic acid business through FY30
  • Clear path to full ownership of Sapala by FY30 established

API+ Business (Gunjan Singh)

  • Business remained resilient, performing slightly ahead of internal expectations
  • Favorable pricing and improved product mix
  • Secured two CEP approvals and filed two Korean DMFs
  • Target of seven new API filings for FY27
  • Invested in commercial flow reactor at Jaggayyapet site, expected ready by next quarter
  • Completed 11 customer audits across API manufacturing sites

Formulations Business

  • Performance slightly below expectations
  • Impacted by API production delay, lower demand for mature product, and customer-led pack configuration change
  • Finalized supply agreement covering Middle Eastern markets
  • Two product launches scheduled during Q2 FY27, approximately 10 launches planned for FY27
  • Nacharam facility remediation and operational stabilization ongoing

Specialty Chemicals (Amrit Singh)

  • Overall decline of 34.7% year-on-year in Q1 FY27
  • Agrochemical segment declined due to H2-dominated phasing of products
  • Performance materials delivered growth
  • Confirmed active ingredient program with global innovator entered registration process
  • First qualification campaigns with two Japanese innovators scheduled in FY27
  • Target to qualify approximately two new products each year

Regulatory Update

  • USFDA completed inspection of Pashamylaram facility from 27 July to 5 August 2026
  • Received Form 483 with five observations (none related to data integrity)
  • Company reviewing observations and will respond within stipulated timelines

Management Changes

  • Himanshu Agarwal (CFO) will remain in role until 13 September 2026
  • Succession process ongoing

Forward-looking Guidance

  • Q1 FY27 confirmed as lowest quarter
  • Expect sequential improvement in Q2 FY27
  • Return to year-on-year growth from second half of FY27
  • Margin recovery weighted towards second half of the year
  • Pace of improvement depends on revenue conversion, business mix, utilization, and delivery against operating milestones

Strategic Initiatives

  • Integrating nucleic acid business capabilities into one operating approach
  • Revamping specialty chemicals capacities for next set of agrochemical programs
  • Five operating priorities: strengthening safety/quality systems, operational integration, focused growth agenda, building scientific envelope, reinforcing One Cohance culture
  • Evaluating targeted capacity additions across small molecules, ADCs, API+, and specialty chemicals

External Recognition

  • Achieved EcoVadis Gold rating
  • Strong CDP ratings
  • SBTi validation
  • Sites recognized by British Safety Council and Andhra Pradesh Fire Services Department
  • Completed ISO 22301 business continuity certification audit