The sell-off in Cohance Lifesciences deepened further in Friday’s trading session, with the stock crashing another 2.2% to ₹615 apiece, the lowest level since June 2024. This extended its losing streak to the 12th consecutive trading session, leading to a cumulative drop of 28.40%, which is also its biggest sustained crash in recent times.
The decline began in late October after the company’s Managing Director and director, V. Prasada Raju, resigned from his role, which was further compounded by the company’s weak performance in the September quarter.
Mutual funds face ₹1545-crore hit
The relentless crash in the stock has also resulted in huge losses for domestic mutual funds. At the end of the September quarter, 30 mutual funds collectively owned a 16.49% stake, almost double the 8.90% they held in the June quarter. A 28.4% crash in the stock price has led to a cumulative loss of around ₹1,545.7 crore for fund houses.
Some of the key mutual funds holding stakes in the company include DSP Multicap Fund, with a 3.99% stake; HDFC Large and Mid-Cap Fund, which owns 2.64% and Invesco India Contra Fund and SBI MNC Fund, each holding 1.39% and 1.32%, respectively, at the end of Q2.
Meanwhile, SBI Life Insurance also held a 2.78% stake in the company.
Cohance Lifesciences reports 52% drop in Q2 net profit
For the September-ending quarter (Q2FY26), the company reported a 52% YoY drop in its consolidated net profit to ₹66.39 crore. It had reported a net profit of ₹138 crore in the same period last year.
Its revenue from operations during the reporting quarter also came in lower at ₹555.57 crore, compared to ₹603.77 crore in the same quarter last year.
At the operating level, its EBITDA fell sharply by 41% to ₹121 crore from ₹205 crore in the September 2024 quarter, with margins contracting 1,200 basis points YoY to 22% in Q2, reflecting lower volumes, upfront investments in employee costs, and certain transition and remediation costs.
According to the company, the performance was impacted by multiple challenges such as pharma destocking, biotech funding delays, and the temporary shutdown of the Nacharam plant, all of which hit growth during the quarter.
Trims revenue guidance for FY26
Given the current challenges, the company said it expects FY26 to deliver flattish revenue growth YoY, which has further added pressure to the stock’s decline. However, with deferred shipments from 1H, new commercial project wins, and audit clearances, the company expects 2H performance to be better than 1H.
The company expects growth to return in FY27 on the back of new wins, existing business momentum, and restocking and reloads on the CDMO side of the business, which has been negatively impacted this year.
Over the long term, the company maintained its mid-to-long-term revenue guidance of ₹85 billion with mid-30s EBITDA margins, supported by ongoing investments and foundational business initiatives. It remains confident that it will be able to recoup operating leverage from the upfront investments made over the last 12-18 months.
Cohance Lifesciences share price trades at a 54% discount to 1-year high
The recent sell-off is an extension of the stock’s prolonged underperformance. It has ended each of the past four months with sharp losses, including an 18% decline so far in November, bringing the share price 54% below its 1-year peak of ₹1,353.
Though the stock’s short-term trend looks weak, long-term returns appear strong.
Despite the sharp correction, the stock is still up 40% over the last three years and 90% over the last five years. Between May 2024 and October 2024, the stock witnessed a one-way rally, surging by a massive 112% in just five months.