Buy Cohance Lifesciences; target of Rs 1365: ICICI Securities

ICICI Securities research report on Cohance Lifesciences

Cohance Lifesciences’ (Cohance) Q4FY25 pro forma financial performance was below our expectation. Momentum across its pharma CDMO (+31% YoY) was strong, while specialty chemical CDMO business growth (+75%) is beginning to recover. Pharma CDMO business could benefit from the commercialisation of one new molecule (supplying four intermediates), while a recovery in specialty chemical segment may continue in FY26. Management has guided for double-digit revenue growth driven by traction in all the three verticals.

Outlook

However, change in business mix may restrict EBITDA margin between 30-32% in FY26 (adj. margin in Q4FY25 at 31.3%) and a recovery could flow in thereafter. Maintain BUY with a DCF-based revised TP of INR 1,365.