Cohance Lifesciences Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹464.70+₹4.75 (+1.03%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:48 pm

Understanding the Business

Company site ↗

The 60-second version of Cohance Lifesciences Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Cohance Lifesciences Limited engages in the contract research, development, and manufacturing of new chemical entity (NCE) based intermediates, active pharmaceutical ingredients (API), specialty chemicals, and formulated drugs in India, the United States, Europe, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Annual revenue₹2,204 Cr

How does it make money?

Turns over ₹2,204 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 21.3% and earnings to grow about 85.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+21.3%

Est. earnings growth+85.8%

Analysts8

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +66% while net margin moved -74% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+66%

Margin effect-74%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 4.6% is weak
✗ ROE has fallen by 19.1 points over the period

Quality vs. Valuation

Company Quality

46/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

26/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

170.2x

3Y Median

59.4x

40 monthly readings · mean 63.7x · range 23.8x–111.3x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 186% above its 3y median of 59.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 411% above the peer median of 33.3x.

vs. its own history

Expensive

59.4x median over 40 months · +186%

vs. sector peers

Expensive

33.3x median of 4 peers · +411%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

40.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 23.7% to 4.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.7% to 4.8% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 469% over 3 years, from ₹70 Cr to ₹400 Cr.
🔴High leverageFinancial
Debt/Equity of 9.93x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 25.1 points, from 45.3% to 20.2%.
🔴Receivables growing faster than salesFinancial
Receivables up 514% against revenue up 66% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 50% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 45.3% to 20.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 9.93x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 514% against revenue up 66%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 186% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 23.7% to 4.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 14% a year✓ 18.3% CAGR
Latest reported year was -23.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 20.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹148 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 3 neutral · 6 weak

Market Cap

₹17,779 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

170.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.55x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.73

Profitable

Profitable on a per-share basis

ROE

4.6%

Weak

Weak capital efficiency

ROCE

4.8%

Weak

Low return on total capital employed

Debt/Equity

9.93x

High

High leverage

Revenue Growth (YoY)

-23.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-96.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹148 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

48.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

-11.5%

Weak

Thin margins leave little room for error

Net Margin

5.0%

Average

Average bottom-line conversion

Current Ratio

2.83

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.62

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

451.3 / 450.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,331 Cr	₹1,034 Cr	₹2,526 Cr	₹2,204 Cr	+18.3%
EBITDA	₹603 Cr	₹425 Cr	₹850 Cr	₹445 Cr	-9.6%
EBITDA Margin	45.3%	41.1%	33.7%	20.2%	—
PAT (Net Profit)	₹411 Cr	₹300 Cr	₹487 Cr	₹179 Cr	-24.2%
EPS	₹16.16	₹11.8	₹12.68	₹4.68	-33.8%
ROE	23.7%	14.6%	13.4%	4.6%	—
ROCE	31.7%	19.3%	14.3%	4.8%	—
Total Debt	₹70 Cr	₹65 Cr	₹486 Cr	₹400 Cr	+78.6%
Free Cash Flow	₹171 Cr	₹333 Cr	₹357 Cr	₹148 Cr	-4.7%

🟢 Revenue has grown at 18.3% a year over 3 years.

🔴 EBITDA has shrunk at 9.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 45.3% to 20.2% over 3 years (-25.1 pts).

🔴 PAT (Net Profit) has shrunk at 24.2% a year over 3 years.

🔴 EPS has shrunk at 33.8% a year over 3 years.

🔴 ROE has fallen from 23.7% to 4.6% over 3 years (-19.1 pts).

🔴 ROCE has fallen from 31.7% to 4.8% over 3 years (-26.9 pts).

🔴 Total Debt has grown at 78.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 4.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5,730 Cr

Total Liabilities

₹1,696 Cr

Cash & Equivalents

₹49 Cr

Operating Cash Flow

₹368 Cr

Capex

-₹220 Cr

Shareholding (proxy)

Institutional Holding

22.9%

Insider Holding

64.0%

Corporate Actions

Ex-Dividend Date

09 Sept 2022

Analyst Consensus

Recommendations

4 Buy · 1 Hold · 4 Sell

Target Price (Mean)

₹508.89

+9.5% vs CMP

Target Range

₹315 – ₹1,150

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

3 mixed3 general

Cohance Lifesciences (NSEI:COHANCE) Stock Forecast & Analyst Predictions

Simply Wall Street, 12 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Cohance Life shares falls after USFDA flags five observations; reports losses in Q1

Moneycontrol.com, 06 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

COHANCE Stock Price and Chart — NSE:COHANCE

TradingView, 29 Apr

Cohance Lifesciences Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Cohance Lifesciences share price surges 37% in two days on appointment of new CEO

Livemint, 28 AprPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Cohance Lifesciences receives central government approval for Umang Vohra

scanx.trade, 12 Oct

Watch Items

Revenue growth is negative (-23.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑