COHANCE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | COHANCE | Market Cap | 14,166 Cr. | Current Price | 370 ₹ | High / Low | 1,328 ₹ |
| Stock P/E | 38.2 | Book Value | 115 ₹ | Dividend Yield | 0.00 % | ROCE | 16.0 % |
| ROE | 12.5 % | Face Value | 1.00 ₹ | DMA 50 | 510 ₹ | DMA 200 | 769 ₹ |
| Chg in FII Hold | -0.50 % | Chg in DII Hold | 0.76 % | PAT Qtr | 94.3 Cr. | PAT Prev Qtr | 58.6 Cr. |
| RSI | 14.2 | MACD | -43.2 | Volume | 2,50,645 | Avg Vol 1Wk | 4,65,690 |
| Low price | 367 ₹ | High price | 1,328 ₹ | PEG Ratio | -1.85 | Debt to equity | 0.05 |
| 52w Index | 0.32 % | Qtr Profit Var | -32.2 % | EPS | 12.0 ₹ | Industry PE | 29.0 |
📊 Financials: Cohance Lifesciences Ltd. has reported PAT of 94.3 Cr compared to 58.6 Cr previously, though quarterly profit variation is negative (-32.2%). ROE at 12.5% and ROCE at 16.0% indicate moderate efficiency. Debt-to-equity ratio of 0.05 highlights a virtually debt-free balance sheet, strengthening financial stability. EPS of 12.0 ₹ supports earnings visibility, but profitability momentum remains weak.
💹 Valuation: Current P/E of 38.2 is above the industry average (29.0), suggesting premium valuation. P/B ratio ~3.21 (Price 370 ₹ / Book Value 115 ₹) is moderately expensive. PEG ratio of -1.85 highlights weak growth prospects relative to valuation. Dividend yield of 0.00% offers no income support. Intrinsic value appears lower than current price, reflecting stretched valuations.
🏢 Business Model: Cohance operates in the pharmaceutical and life sciences sector, focusing on contract development, manufacturing, and specialty APIs. Competitive advantage lies in niche product offerings, global customer base, and low leverage. However, earnings remain vulnerable to regulatory changes and global demand cycles.
📈 Entry Zone: Attractive accumulation zone between 360–370 ₹, near its 52-week low (367 ₹) and well below DMA200 (769 ₹). RSI at 14.2 indicates oversold conditions, while MACD (-43.2) suggests bearish momentum. Long-term investors should accumulate cautiously at lower levels.
🔒 Holding Guidance: Fundamentally stable with low leverage and moderate efficiency, but valuations are stretched and profit momentum is weak. Suitable for long-term holding only if accumulated near support levels for margin of safety.
Positive
- Low debt-to-equity ratio (0.05) ensures financial stability.
- Moderate ROE (12.5%) and ROCE (16.0%) highlight efficiency.
- DII holdings increased (+0.76%), reflecting domestic confidence.
- Niche positioning in specialty APIs and life sciences.
Limitation
- Quarterly PAT decline (-32.2%) raises caution on earnings momentum.
- High P/E (38.2) compared to industry average (29.0).
- P/B ratio of 3.21 indicates moderately expensive valuation.
- PEG ratio of -1.85 highlights weak growth prospects.
- Dividend yield of 0.00% offers no income support.
- FII holdings decreased (-0.50%), showing foreign caution.
Company Negative News
- No major negative news reported, but profit decline and reduced FII holdings raise caution.
Company Positive News
- Debt-free operations strengthen balance sheet stability.
- Strong niche positioning in life sciences and specialty APIs.
- DII holdings increased, reflecting domestic institutional confidence.
Industry
- Pharmaceutical and life sciences sector benefits from recurring healthcare demand.
- Industry P/E at 29.0 suggests moderate optimism.
- Global demand for APIs and specialty chemicals supports long-term growth.
Conclusion
✅ Cohance Lifesciences Ltd. is financially stable with low leverage and moderate efficiency. However, valuations are stretched and profit momentum has weakened. Long-term investors may accumulate near 360–370 ₹ for margin of safety, while monitoring earnings growth and regulatory developments.
I can also extend this with a peer comparison against Divi’s Labs, Laurus Labs, and Suven Pharma to highlight Cohance’s relative valuation and efficiency. Would you like me to add that?