Cohance Shares Dip As JPMorgan Downgrades Co On Higher Execution Risks, Premium Valuation

Cohance Lifesciences Ltd. continues to face short-term pressure, even as its long-term growth story stays intact, believes brokerage firm JPMorgan.

JPMorgan downgraded the counter from 'overweight' to 'neutral', and set a price target of Rs 640 by March 2028, implying an upside potential of 7%.

The company's pharma CDMO segment, which contributes to 42% of revenues, fell 8% annually as destocking in key commercial molecules dragged on and reloads for Phase 2–3 assets were delayed, noted JPMorgan's latest report.

ADC momentum is building, with three new payload launches planned for FY26 and 17 new biotech customers added at NJ Bio, but near-term weakness persists, especially at NJ Bio, where management expects a flattish year due to shipment deferrals linked to muted biotech funding.

Still, JPMorgan notes a strong medium-term setup driven by new customer additions and a solid late-stage pipeline, including two already USFDA-approved Phase 3 molecules, two more approvals expected in 8–12 months, and a key molecule launch eyed for some time in the next two fiscals.

Deferred projects and organic growth could lift revenue at a 32% CAGR over FY26–28 on a low base. Specialty chemicals and AgChem, meanwhile, are showing signs of revival, says JPMorgan. Management expects the rebound to continue, and four new RFPs from a major AgChem innovator signal deeper engagement.

Cohance remains well positioned in high-growth niches like ADCs and oligonucleotides, with strong leadership, strategic M&A, and capacity expansion backing its long-term aspiration of $1 billion in revenue by FY30, notes the brokerage.

But JPMorgan warns that destocking, delayed reloads, shipment push-outs, lumpy project revenue and slower scale-up in new platforms increase execution risk, while the stock’s premium valuation leaves limited room for missteps.

The stock fell as much as 1.53% to Rs 587.30 apiece on the NSE on Wednesday, and is currently trading close to day's lows at Rs 587.45 apiece as of 9:58 a.m. This compares to a rangebound Nifty 50, trading at a marginal rise of 0.05% as of the same time. Cohance shares have fallen 54.03% in the last 12 months and are down 48.34% year-to-date.