Cohance Lifesciences Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economy

During 2025 and into early 2026, the global economy demonstrated resilience amid a complex and evolving macroeconomic landscape, underpinned by steady growth momentum, ongoing structural shifts, declining inflation trends and divergent regional performances.

Moderate yet Sustained Global Growth

According to the International Monetary Funds World Economic Outlook Update, global real gross domestic product (GDP) growth for 2025 is held at approximately 3.4%, a rate broadly consistent with medium-term trends and reflective of robust activity in key advanced and emerging economies.

This performance was supported by a combination of technology-led investment, accommodative financial conditions, fiscal support measures and private sector adaptability, which together helped offset headwinds from trade policy shifts and geopolitical uncertainty.

Inflation and Price Dynamics

Across 2025, global inflation continued its downward trajectory from the elevated levels seen in recent years. This reflected both easing commodity prices and the gradual adjustment of monetary policy in major economies, reinforcing headline disinflation and contributing to improved prospects for price stability.

However, inflation convergence varied across regions, with advanced economies generally approaching central bank targets more rapidly than many emerging and developing economies.

Regional Divergences and Structural Drivers

United States: Maintained solid expansion, driven by strong consumption and investment, supported by favourable labour market dynamics.

China: Continued to deliver meaningful growth, although structural rebalancing and shifts in external demand kept expansion moderate relative to prior decades.

Emerging and Developing Markets: Growth outcomes varied markedly across regions, with some economies benefiting from domestic demand resilience while others faced tighter financing conditions and structural constraints.

Key Risks and Policy Considerations

The IMF highlighted several downside risks to the global outlook, including potential re-evaluation of technology investment expectations, heightened geopolitical tensions and shifts in global trade policies that could constrain cross-border flows and business confidence.

In response, policymakers were advised to restore fiscal buffers, preserve price and financial stability, reduce uncertainty and implement structural reforms to support inclusive and sustainable growth.

Outlook Towards 2026 and Beyond

Looking ahead, the global economy is expected to maintain a moderate growth trajectory. According to the IMF, global real GDP growth is projected to remain around 3.1% in 2026, reflecting underlying resilience despite ongoing structural and geopolitical challenges. However, global headline inflation is projected to rise modestly in 2026 before resuming its decline in 2027.

The outlook is supported by technology-led investments, improving financial conditions and gradual disinflation, which could provide central banks greater flexibility in calibrating monetary policy. At the same time, risks remain tilted to the downside, including potential trade disruptions, geopolitical tensions and financial market volatility.

Overall, the medium-term outlook signals measured expansion with cautious optimism, underscoring the need for prudent fiscal management, structural reforms and policy coordination to sustain stability and growth.

Indian Economy

The Indian economy in FY26 demonstrated remarkable resilience, solidifying its position as the fastest-growing major economy. As per the Second Advance Estimates, the nation has successfully navigated global headwinds through robust domestic demand and strategic structural reforms.

GDP Growth and Primary Drivers

Indias real GDP growth for FY26 is estimated at 7.6%, exceeding initial projections, according to MoSPI. Growth was driven by sustained government capital expenditure, which rose 10% year-on-year, with infrastructure investments such as dedicated freight corridors and green energy grids crowding in private investment. Additionally, the maturation of Digital Public Infrastructure has enhanced formalisation and efficiency, contributing meaningfully to overall economic expansion.

Inflation and Private Consumption

Headline CPI inflation remained within the Reserve Bank of Indias target, averaging 3.2%-3.5% during FY26. The central bank implemented two repo rate cuts, supporting spending, investment and overall growth. Although seasonal food price volatility persisted, supply-side measures and a stable rupee helped contain imported inflation. Stable prices drove a strong recovery in private consumption, with urban demand leading, while rural consumption reached a four-year high in Q2 FY26, supported by better farm realisations and declining unemployment.

Agriculture and Industrial Activity

The agricultural sector recorded healthy growth, supported by a well-distributed monsoon and the expansion of the "AgriStack" digital initiative. Industrial activity was equally strong, with the manufacturing sector benefiting from the peak implementation of Production Linked Incentive (PLI) schemes. Output in electronics, semiconductors and renewable energy components grew in the double digits. The Purchasing Managers Index (PMI) consistently hovered around 58, indicating sustained expansionary momentum.

External Trade and GST Collections

Despite a sluggish global recovery, Indias external trade reached an all-time high of US$ 863 billion, up from US$ 825 billion in FY25. Services exports, particularly in high-end Global Capability Centres (GCCs), reached an estimated US$ 421 billion, keeping the Current Account Deficit (CAD) at a manageable level of around 1.0%-1.2% of GDP. On the fiscal front, Goods and Services Tax (GST) collections demonstrated exceptional buoyancy. Gross collections for the full year reached Rs.22.27 Lakh Crore, marking an 8.3% year-on-year growth, reflecting enhanced compliance and a broadened tax base following the latest digital audits.

Outlook for FY27 and Beyond

The outlook for FY27 remains cautiously optimistic, despite risks from oil price shocks, monsoon variability, supply chain disruptions and inflationary pressures. As India approaches the milestone of becoming the worlds third-largest economy, the focus is shifting toward "Viksit Bharat" goals. Thus, key priorities include accelerating the energy transition and deepening labour market reforms. While geopolitical risks remain a variable, Indias strong domestic macroeconomic fundamentals provide a stable cushion for sustainable longterm growth.

Why Is Indias Macro Environment Favourable Rs.

Indias resilient growth, strengthening manufacturing ecosystem and cost competitiveness create a favourable operating backdrop for manufacturing. Moreover, stable inflation improves cost visibility, while the "China+1" shift creates opportunities for qualified Indian manufacturers such as Cohance.

THE SECTORAL LANDSCAPE

Global Pharmaceutical Sector

The global pharmaceutical sector in 2025 demonstrated resilience amid macroeconomic pressures, healthcare system reforms and evolving patient demand. According to the IQVIA Institute for Human Data Science, global medicine spending is projected to reach approximately US$ 2.4 trillion by 2029, growing at a 5-8% CAGR. This growth is supported by sustained scientific advancement, increasing adoption of speciality therapies and expanding access to healthcare across emerging markets.

Over the past five years (2020-2024), 394 novel active substances (NAS) were launched globally, reflecting strong research productivity despite post-pandemic challenges. However, access to these therapies remains uneven, with higher availability in developed markets such as the United States, Europe and parts of Asia compared to lower-income regions.

Medicine utilisation patterns continue to vary significantly across geographies. While developed markets maintain higher per capita consumption, growth in overall spending is increasingly driven by the adoption of high-value, complex therapies rather than volume expansion alone. At the same time, the continued penetration of generics and biosimilars plays a critical role in improving affordability and supporting the sustainability of the healthcare system.

Innovation and drug development environment

The global R&D environment remains robust, characterised by a steady pipeline of innovative therapies and increasing collaboration across the pharmaceutical ecosystem. Research activity continues to be concentrated in high-burden disease areas, including oncology, metabolic disorders and central nervous system conditions.

The United States maintains its leadership in new drug development, followed by key European markets, while China has strengthened its position as an important hub for clinical research and innovation particularly in biologics and complex molecules. Its increasing investments in advanced therapeutic modalities, including antibody-drug conjugates, oligonucleotides and cell & gene therapies, alongside growing participation in multi-regional clinical trials are reinforcing its role in the global innovation ecosystem.

At the same time, rare diseases are emerging as one of the fastest-growing segments of pharmaceutical innovation. Advances in genomic science, supportive orphan drug regulations and increasing investment in precision medicines are expanding the pipeline of therapies targeting rare conditions. Modalities such as oligonucleotides are playing an increasingly important role in addressing these diseases, creating long-term opportunities for specialised CRDMO partners with expertise in complex development and manufacturing.

Accelerated regulatory pathways, cross-border licensing agreements and strategic partnerships between multinational companies and emerging biotech firms are further shaping the innovation landscape. However, commercial outcomes for new therapies continue to vary across markets due to differences in pricing structures, reimbursement frameworks and speed of patient access.

2026 R&D perspective

IQVIAs Global R&D Trends 2026 indicates that large-pharma R&D spending and broader funding growth slowed in 2025 while remaining above pre-pandemic levels. Biopharma-to- biopharma deal activity increased, cross-border transactions involving China reached a record level, and new active- substance launches expanded, including 30 global first-in-class launches. At the same time, longer trial durations and wider intervals between sequential trials continued to constrain development productivity.

Deloitte estimated the projected internal rate of return for a cohort of leading biopharma late-stage pipelines at 7.0% in 2025. Excluding GLP-1/GIP assets, the underlying return was estimated at 2.9%, reinforcing the focus on portfolio selection, development velocity, technical de-risking and capital-efficient execution.

IQVIA expects global medicine spending to exceed US$ 2.6 trillion by 2030, growing by 5-8% annually, with oncology, immunology, diabetes and obesity among the largest contributors to growth.

Global therapy trends and shift towards speciality medicines

Therapy area dynamics continue to be led by oncology, which remains the largest segment globally. According to IQVIA, oncology spending reached approximately US$ 252 billion in 2024 and is expected to grow to around US$ 441 billion by 2029, driven by continuous innovation and expanding treatment applications.

Metabolic therapies, particularly for diabetes and obesity, are witnessing strong growth supported by rising disease prevalence and improved diagnosis rates. Immunology remains an important segment, although growth in certain developed markets is moderating due to increasing competition from biosimilars.

Overall, the industry is undergoing a structural shift toward speciality medicines, which account for a growing share of total spending. This transition reflects a focus on targeted, high-complexity treatments with improved clinical outcomes.

This shift towards speciality and high-complexity therapies is particularly relevant for Cohance, as pharmaceutical innovation increasingly demands deeper chemistry capabilities, specialised infrastructure and reliable development partners. The Companys expanding focus on ADCs, oligonucleotides, HPAPIs and complex small molecules reflects its intent to participate in the higher-value areas of pharmaceutical outsourcing where technical depth and execution reliability are critical differentiators.

Emergence of Oligonucleotides in Precision Medicine

Oligonucleotide-based therapies are gaining relevance within precision medicine, particularly across rare diseases, oncology, genetic disorders and molecular diagnostics.

Given the growing importance of this modality, the following section examines the global oligonucleotide market and its implications for specialised chemistry and manufacturing capabilities.

Outlook

The global pharmaceutical sector is expected to maintain steady growth over the medium term, underpinned by continued advances in science, increasing disease burden and improving healthcare access. Oncology and metabolic therapies are likely to remain key contributors to incremental growth.

At the same time, factors such as patent expiries, pricing pressures and wider adoption of biosimilars will continue to influence market dynamics, particularly in developed regions. Demographic trends, including ageing populations and the rising prevalence of chronic diseases, alongside ongoing digital integration and global clinical collaboration, are expected to support the sectors long-term sustainability.

Why does this shift benefit Cohance Rs.

The growing emphasis on speciality and high-complexity therapies reinforces Cohances positioning as a chemistry-led CDMO. Its process development expertise, regulatory compliance and flexible manufacturing enable deeper participation in innovation-driven pharmaceutical supply chains.

Global CDMO Segment

The Contract Development and Manufacturing Organisation (CDMO) segment plays a pivotal role in the global pharmaceutical and biotechnology ecosystem by providing integrated services across drug development, manufacturing and supply chain operations. These services span active pharmaceutical ingredient (API) production, finished dosage formulation (FDF), packaging and clinical trial support, enabling pharmaceutical companies to enhance efficiency and accelerate time-to-market.

In 2025, the global CDMO market expanded steadily, supported by increasing reliance on external partners, rising R&D complexity and the growing need for specialised manufacturing capabilities. The market is valued at approximately US$ 197.4 billion in 2025 and is projected to reach around US$ 368.7 billion by 2034, growing at a CAGR of 7.15%.

For Cohance, the expansion of the global CDMO market aligns with its own evolution into a broader, technology-led platform. The Companys operating model brings together Pharma CDMO, API+ and Speciality Chemicals, enabling it to serve customers across development, scale-up, commercial manufacturing and specialised chemistry requirements. This integrated presence strengthens Cohances ability to support global innovators seeking reliable, flexible and quality-led partners across the molecule lifecycle.

Evolving outsourcing model

Outsourcing is evolving from discrete capacity provision towards integrated scientific partnerships. Innovators increasingly seek partners that combine specialised chemistry, analytical development, process engineering, regulatory readiness and the ability to support programmes from early development through commercialisation. This favours platforms that preserve specialist scientific depth while creating effective connections across technologies and development stages.

For Cohance, the opportunity lies in honouring the distinct scientific legacies that each founding entity brings — the process chemistry depth of Suven Pharmaceuticals, the API expertise of Avra Laboratories and RA Chem Pharma, the speciality chemicals know-how of ZCL Chemicals, the bioconjugation capability of NJ Bio, and the oligonucleotide/ nucleic-acid chemistry strengths of Sapala — and weaving them into a single, coherent proposition that customers experience not as a collection of acquired businesses, but as one integrated scientific partner. The real strategic value is not in what was assembled, but in what that assembly makes possible — scientific insight, development infrastructure, analytical capability and customer relationships working in concert, each amplifying the other.

Key Growth Drivers

Several factors are propelling the CDMO segments expansion:

• Structural Shift Toward Outsourcing: Pharmaceutical and biopharmaceutical companies are increasingly partnering with CDMOs to optimise costs, enhance flexibility and access specialised capabilities, particularly in complex areas such as biologics, vaccines and injectable therapies.

• Rising Demand for Advanced Therapies: Increasing prevalence of chronic diseases, including oncology and metabolic disorders, is driving demand for innovative treatments, thereby accelerating the need for scalable and compliant manufacturing solutions.

• Technological Advancements: Adoption of automation, digitalisation, artificial intelligence and continuous manufacturing is improving efficiency, strengthening quality control and enabling scalable production of complex therapies.

• Regulatory and Cost Pressures: Stringent regulatory requirements and the high cost of drug development are reinforcing the importance of CDMOs in supporting compliance, reducing risk and improving speed-to-market.

Key Trends for 2025

• Industry Consolidation: Mergers and acquisitions are enabling CDMOs to expand capabilities and offer end-to- end solutions, supported by private equity investments and the need for integrated service offerings.

• Shift Toward Advanced Modalities: Growing focus on complex biologics, including antibody-drug conjugates (ADCs), cell and gene therapies and radiopharmaceuticals, is increasing demand for specialised infrastructure and expertise.

• Capacity Constraints and Supply Chain Resilience: Strong demand for injectable therapies and evolving biotech pipelines are creating capacity bottlenecks, prompting investments in modular facilities, geographic diversification and dual sourcing strategies.

• Regional Diversification: North America remains the largest market, while Asia-Pacific is emerging as the fastest-growing region due to cost advantages, improving regulatory frameworks and expanding healthcare demand.

Why does outsourcing strengthen Cohance Rs.

The global shift towards pharmaceutical outsourcing strengthens Cohances relevance as a chemistry-led manufacturing partner. Its process expertise, regulatory credibility and scalable infrastructure position it to deepen customer relationships across regulated markets.

Global Oligonucleotide Market

Oligonucleotides, commonly referred to as oligos, are short DNA or RNA fragments that play important roles in molecular diagnostics, genetic testing, polymerase chain reaction (PCR) applications, and emerging therapeutic modalities. Their ability to target specific genetic sequences has made them increasingly relevant in precision medicine, rare-disease treatment, oncology research and next-generation life sciences applications.

Oligonucleotide synthesis relies on advanced chemical manufacturing techniques, including phosphoramidite chemistry and solid-phase synthesis. Producing high-purity oligonucleotides remains technically demanding due to complex process development, purification requirements, stringent regulatory expectations, long development timelines and the need for specialised scientific expertise. These technical requirements are also increasing the importance of reliable manufacturing infrastructure, analytical capabilities and quality systems across the oligonucleotide value chain.

Key Market Statistics

• Market size estimated at US$6.8 billion in 2026

• Expected to reach US$13.5 billion by 2035

• Projected to grow at a CAGR of 7.9% between 2026 and 2035

• North America remains a leading market, supported by strong biopharmaceutical R&D activity, advanced healthcare infrastructure and continued investment in nucleic acid-based therapies

Key Growth Drivers

• Expanding pipeline of oligonucleotide-based therapeutics, supported by growing adoption of antisense oligonucleotides, siRNA, and other next-generation nucleic acid therapies across rare, genetic, and chronic diseases.

• Rising technical complexity in oligonucleotide development, synthesis, purification, and scale-up is increasing the importance of specialised capabilities, quality systems and cGMP-compliant infrastructure throughout the value chain.

• Rising demand for high-purity oligonucleotide building blocks, specialised chemistries, and commercial-scale manufacturing as more programmes advance toward late- stage development and commercialisation.

• The growing application of oligonucleotides in molecular diagnostics, genetic testing, and precision medicine is supported by continued research activity and technological advancements.

• Supply chain diversification initiatives and increasing investments by pharmaceutical and biotechnology companies in advanced therapeutic modalities are creating new opportunities for qualified global manufacturing partners.

Market Size & Trends

• Research and diagnostics account for approximately 60% of the global market.

• Active pharmaceutical ingredients (APIs) represent the largest product category within oligonucleotide synthesis.

• Antisense oligonucleotides dominate the market, accounting for more than 60% of the total share in 2026.

• Commercial-scale manufacturing contributes nearly 80% of market revenues, reflecting the increasing maturity of the modality.

• Rare diseases represent the largest therapeutic segment, accounting for nearly 45% of market demand.

• Pharmaceutical and biopharmaceutical companies constitute the largest end-user group.

• Large and very large companies account for approximately 75% of overall market activity.

• North America continues to command the largest share of global demand, a trend expected to persist over the foreseeable future.

Future Outlook

The long-term outlook for the oligonucleotide industry remains highly attractive. The growing prevalence of chronic and rare diseases, expanding therapeutic applications, encouraging clinical outcomes, and a rapidly advancing development pipeline continue to drive demand. Furthermore, increasing adoption of nucleic acid-based medicines and sustained research activity are expected to deepen the oligonucleotide value chain, strengthening demand for high- purity building blocks, advanced chemistries and scalable manufacturing capabilities.

Why is the oligonucleotide opportunity significant Rs.

The expanding oligonucleotide market presents a significant opportunity for Cohance, strengthened by Sapala Organics integration. Its specialised building blocks, advanced chemistry platforms and cGMP manufacturing capabilities position it to participate in higher-value, next-generation therapeutic supply chains.

Oligonucleotide CDMO Market

The global oligonucleotide CDMO market size was estimated at US$ 911.78 million in 2024 and is projected to reach US$ 3.16 billion by 2033, growing at a CAGR of 14.98% from 2025 to 2033. The market is driven by the rising clinical pipeline of antisense and siRNA therapies, growing adoption of mRNA-based therapeutics beyond vaccines and increasing outsourcing by biotech firms to reduce manufacturing complexity.

This opportunity is strategically relevant for Cohance following the integration of Sapala Organics, which strengthens the Companys presence in oligonucleotide building blocks and related advanced chemistry platforms. As demand grows for RNA-based therapies, genetic medicines and precision treatments, Cohances ability to combine specialised chemistry expertise with scalable CDMO execution can support its participation in this emerging modality.

Key Growth Drivers

• Rising Demand for RNA-Based and Precision Therapies:

Expanding clinical pipelines for RNA therapeutics, including antisense oligonucleotides (ASOs), siRNAs and mRNA- based treatments, are driving demand for specialised manufacturing. Growth is particularly strong in oncology, rare genetic and neurological disorders, reflecting the broader shift toward precision medicine and targeted therapies.

• Increasing Outsourcing and End-to-End Service Integration

Pharmaceutical and biotech companies are increasingly relying on CDMOs to address manufacturing complexity, capacity constraints and high capital requirements.

Demand is rising for integrated services spanning sequence design, synthesis, analytical development and commercial- scale production, enabling faster and more efficient time- to-market.

• Advancements in Manufacturing Technologies

Innovations in synthesis and production technologies, including automated platforms, continuous manufacturing, advanced delivery systems and AI-driven process optimisation, are enhancing efficiency, scalability and product quality. These advancements are critical for handling complex oligonucleotide chemistries and large- scale production requirements.

• Growing Investments and Pipeline Expansion Increased funding in biologics and nucleic acid-based therapies, supported by government initiatives and private capital, is strengthening R&D pipelines and accelerating clinical development. This is driving demand for high- quality, GMP-compliant manufacturing infrastructure and specialised CDMO capabilities.

• Expanding Applications and Regional Opportunities Beyond therapeutics, oligonucleotides are gaining traction in diagnostics and research applications, broadening market scope. At the same time, regions such as Asia-Pacific are emerging as key growth hubs due to cost advantages, improving regulatory frameworks and expanding biopharmaceutical capabilities.

Strategic Implication

The growth of the global oligonucleotide market creates a relevant long-term opportunity for Cohance Hfesclences. The Companys exposure to complex oligonucleotide building blocks, specialised chemistries and cGMP-linked manufacturing capabilities strengthens its ability to participate in this evolving value chain. As nucleic acid-based therapies gain wider relevance, continued investment in oligonucleotide infrastructure and forward-integration capabilities can support technology differentiation, customer relevance and participation in higher-value therapeutic supply chains.

Global Antibody-Drug Conjugate Market Commercial momentum and five-year outlook

Antibody-drug conjugates have evolved into an established class of targeted medicines, combining the selectivity of an antibody with the activity of a potent payload through a purpose-designed linker. Their growing commercial adoption is expanding the need for specialised capabilities across payload and linker-payload chemistry, high-containment manufacturing, conjugation, analytical characterisation, bioassays, translational research and cGMP supply.

As of May 2026, 22 ADCs had received approvals globally, including 14 products approved by the US FDA. Global sales of approved ADC medicines were estimated at approximately US$ 16.14 billion in 2025. Based on the industry forecast of 9.27% annual growth, the market is expected to reach approximately US$ 25.1 billion by 2030 and approximately US$ 27.5 billion by 2031. This growth is expected to be supported by new product approvals, expansion into additional indications and earlier lines of treatment, combination regimens and wider adoption of targeted oncology therapies.

The commercial base is already meaningful. Enhertu?, Padcev? and Adcetris? generated reported sales of approximately US$ 4.982 billion, US$ 3.03 billion and US$ 1.59 billion, respectively, in 2025. Together, these products represented close to 60% of estimated global ADC sales. As newer products and indications scale, the commercial opportunity is expected to broaden beyond the current leading franchises.

Pipeline and investment momentum

Scientific and commercial activity across the modality remains strong. Industry landscape data recorded a 33% increase in new ADC drugs and a 23% increase in new clinical trials during 2024, including 660 new ADC trials. Ninety-nine ADC transactions represented an aggregate reported deal value of US$ 64.3 billion during the year. Separately, the May 2026 industry review identified approximately 380 clinically active ADCs, providing a sizeable pipeline from which future approvals and manufacturing demand may emerge.

Innovation is broadening beyond conventional constructs. Bispecific and multispecific antibodies, dual-payload designs, new payload mechanisms, site-selective conjugation and more sophisticated linker systems are being evaluated to improve selectivity, overcome tumour heterogeneity and resistance, and widen the therapeutic window. These advances increase the interdependence of chemistry, biology, analytics and manufacturability across development.

Growth across the ADC development and manufacturing ecosystem

Growth in approved-product sales is translating into demand across the outsourced ADC value chain. The global ADC contract-manufacturing market is projected to expand from approximately US$ 8.9 billion in 2024 to approximately US$ 16.5 billion by 2030, representing growth of around 10.9% annually. Within this market, the bioconjugation CDMO opportunity is estimated to grow from approximately US$

2.18 billion in 2025 to approximately US$ 4.37 billion by 2030, implying annual growth of around 15%. The linker and conjugation-technology segment is also expected to grow at approximately 14% annually over the longer term, supported by demand for improved stability, controlled release, tighter drug-to-antibody-ratio control and more consistent product profiles.

Cohance: an end-to-end integrated ADC platform

Cohance participates across the ADC value chain through high-potency payload and linker-payload chemistry, process development, commercial manufacturing, bioconjugation, analytics, bioassays and translational research. NJ Bio provides the US-based bioconjugation and translational component, connected with Cohances India-based process-development and manufacturing network.

During FY26, NJ Bio completed five GMP bioconjugation batches, supported a Phase I drug-product programme and advanced customised payload programmes.

The planned US cGMP expansion is intended to extend customer support through Phase 2b clinical supply.

An integrated ADC value chain

ADC value-chain segment	Evolving industry requirement	Cohance platform capability
Payload and linker-payload chemistry	Potent and differentiated payloads; scalable synthesis; impurity control; high- containment operations	Complex small-molecule and high-potency chemistry, payload-linker development, process R&D and commercial manufacturing across the Cohance network
Linker design and synthesis	Plasma stability, controlled release, hydrophilicity, lower aggregation and compatibility with new payload classes	Linker and linker-payload chemistry, route optimisation, analytical development and scale-up
Conjugation and bioconjugation	Reproducible conjugation, tighter DAR and site-selective approaches that improve consistency and therapeutic index	NJ Bio conventional and site-selective bioconjugation, including the AJICAP? collaboration and high-throughput conjugation workflows
Purification and analytical characterisation	Control of free payload, aggregates, charge variants, DAR distribution and product- related impurities	Integrated purification, LC-MS, HPLC, BLI and complementary analytical characterisation
Bioassays and translational research	Earlier assessment of binding, cytotoxicity, PK, efficacy and safety to guide candidate selection	NJ Bio bioassays, immune profiling, PK/ ADME, in-vivo models and translational research, including the ADC-associated ILD model
cGMP manufacture and clinical supply	Robust technology transfer, validated processes, regulatory documentation and scalable clinical supply	Payload and linker-payload manufacturing, GMP bioconjugation and coordinated support from development through clinical- stage supply
Next-generation conjugates	Bispecific ADCs, dual-payload constructs, AOCs and other targeted conjugates requiring cross-disciplinary development	Connection of NJ Bios conjugation and bioassay platform with Sapalas oligonucleotide and conjugation chemistry capabilities

Global API Segment

The global Active Pharmaceutical Ingredients (APIs) market forms a critical backbone of the pharmaceutical value chain, supplying essential therapeutic components for a wide spectrum of medicines. Demand in 2025 remains strong, supported by the rising prevalence of chronic and lifestyle diseases, advancements in biologics and increasing outsourcing trends.

The market was valued at US$ 270.53 billion in 2025 and is projected to reach US$ 418.99 billion by 2033, growing at a CAGR of 5.55% over 2026-2033. Synthetic APIs continue to dominate, accounting for approximately 71% of the market, driven by sustained demand for generics. This trend is creating significant opportunities for contract development and manufacturing organisations (CDMOs), as pharmaceutical companies increasingly outsource production to optimise costs.

Biotech APIs, however, are expected to see the fastest growth, supported by rising investments in biopharmaceutical innovation, particularly in oncology and targeted therapies, which offer higher value and margin potential.

For Cohance, the API opportunity is anchored in its API+ vertical, which combines established market positions, backward integration and a broad portfolio across APIs and formulations. The verticals ability to support differentiated, end-to-end solutions allows the Company to serve both volume-led and specialised requirements while maintaining focus on quality, cost efficiency and supply reliability. Continued product validations, regulatory filings and formulation CMO additions further support future revenue visibility.

Key Trends and Growth Drivers

The API market in 2025 is influenced by several macro trends and drivers, which could positively impact company performance through increased demand and innovation opportunities:

• Rising Disease Burden: Increasing prevalence of cardiovascular, diabetes, oncology and neurological disorders, coupled with ageing populations, is driving sustained API demand.

• Shift to Biologics and high-potency active pharmaceutical ingredients (HPAPIs). Strong growth in biologics and high- potency APIs, driven by monoclonal antibodies, peptides and expanding oncology pipelines.

• Technological Advancements: The adoption of continuous manufacturing, AI-enabled synthesis, and green chemistry is enhancing efficiency and sustainability.

• Policy Support and Localisation: Government initiatives across India, the US and Europe are promoting domestic API manufacturing, strengthening supply chain resilience and reducing import dependence.

Opportunities and Cohance relevance

Complex and Niche APIs — The Growth Frontier

• Global biotech API segment is the next growth frontier over the next three to four years, driven by ADCs and personalised medicine

• CNS therapeutics, the third-fastest growing segment globally is the core of Cohances API+ portfolio - a position that cannot be quickly repeated.

• Controlled substances carry natural entry barriers due to strict regulatory limitations and supply chain complexities

• Cohance commands a significant portion of the global market share in certain specific innovator products a position that cannot be quickly replicated

The Outsourcing Wave and Indias Structural Advantage

• Merchant API manufacturing segment projected to grow significantly, faster than any other manufacturer segment

• Pharmaceutical companies are actively exiting in-house API manufacturing, creating sustained outsourcing demand

• Cohances backward integration, US FDA-compliant sites and cost-competitive infrastructure position it as a natural destination

China+1 — Lateral Opportunities at Scale

• China controls most of generic API supply by volume but faces growing regulatory scrutiny

• Innovators and generic companies are actively diversifying generating lateral RFPs across all API categories

A Business Operating at a Fraction of Its Potential

• Management estimates API+ is operating at only 30-40% of its full potential over a 3-5 year horizon

• Targeted capacity additions under evaluation across API+ sites

• Commercial flow reactor commissioned at Jaggayyapet, operational next quarter

• New effluent treatment facility commissioned at Ankleshwar

• Nine API filings completed in FY26 — seven more targeted for FY27, representing significant acceleration versus historical rates

Pricing Power and Margin Resilience

• Geopolitical raw material and solvent price escalations successfully passed on to customers, profitability preserved

• Segment margin profile sits in a better position than many of the competitors of the generic API space

• Pricing power underpinned by innovator relationships, controlled substance expertise and dominant market share in key molecules

• Management characterises API+ as the stable bedrock of the Cohance platform — providing the predictability and financial stability that enables investment in higher-value CDMO and AgChem opportunities

Why is the API market outlook favourable Rs.

The global API market continues to expand, driven by chronic disease prevalence, rising outsourcing and demand for complex therapies. Cohances compliance-driven manufacturing capabilities position it to serve both stable synthetic API demand and higher-growth differentiated segments.

Global Speciality Chemicals

The global speciality chemicals market plays a critical role across industries such as automotive, construction, electronics, agrochemicals, personal care and pharmaceuticals, delivering performance-driven solutions focused on durability, safety and efficiency. The market is recovering gradually amid economic uncertainty, supported by emerging-market demand and sustainability-led innovation, yet challenged by raw-material volatility and regulatory pressures.

For Cohance, speciality chemicals represent a complementary growth area built on its depth of chemistry and its ability to deliver differentiated, application-specific solutions. The Companys relationships across agrochemicals, cosmetics, electronic chemicals and photochromic lenses provide exposure to specialised end-use markets where product performance, process reliability and customer collaboration are important differentiators.

The speciality chemicals market is shifting toward high- value, application-specific and bio-based products, alongside increased digitalisation and portfolio optimisation. Valued at US$ 940.72 billion in 2025, it is projected to reach US$ 1,377.32 billion by 2035, growing at a CAGR of 3.54%. Growth is driven by demand for sustainable solutions, advanced materials and expanding end-use sectors, particularly in Asia-Pacific and emerging markets.

Against this backdrop, the most defensible position in speciality chemicals is one built on innovator relationships rather than volume, where product performance, process reliability and deep customer collaboration create switching costs that pricing competition alone cannot overcome. Companies who have established credibility across multiple high-value application areas from photochromic systems and OLED intermediates to semiconductor processing materials are increasingly well placed to capture the next wave of innovator- led outsourcing as global majors consolidate their speciality chemistry supply base around fewer, more capable partners.

Opportunities & Cohance relevance

• Growth concentrated in high-value, application-specific segments, where Cohances photochromic, OLED, and semiconductor chemistry platforms are already positioned

• Rising demand for OLED intermediates and semiconductor materials, with limited supplier alternatives, Cohance is actively scaling molecules in both areas ahead of the demand inflection

• Innovators consolidating speciality chemistry supply base around fewer, more capable partners where Cohances cross-segment credibility makes it a natural consolidation beneficiary

• As sustainability raises the qualification bar for suppliers, Cohances ISO 14001 certifications, ZLD infrastructure and SBTi-validated targets support its positioning with global innovators.

• Automation is compressing development timelines. Here, Cohance is implementing targeted upgrades across the network to improve scalability and speed-to-market

Why speciality chemistry demand favours Cohance Rs.

The growing demand for high-performance, application-specific speciality chemistries reinforces Cohances positioning. Its chemistry-led capabilities and regulatory discipline enable it to serve differentiated opportunities across pharmaceutical, fine chemical and adjacent high-value segments.

Global Agrochemicals Market

The global agrochemicals market is essential for enhancing agricultural productivity and ensuring food security through crop protection products such as insecticides, herbicides, fungicides and plant growth regulators. Growth in 2025 is driven by rising food demand, limited arable land and the need to improve yields amid climate variability. The increasing adoption of high-value crops and the expansion of commercial farming in emerging markets further support demand.

This trend is relevant for Cohances Speciality Chemicals business, particularly as the agrochemical cycle moves beyond the destocking and price-adjustment pressures seen in recent years. The Company has used this period to sharpen its focus on the segment through dedicated business leadership and stronger R&D engagement. As customer interactions improve and demand normalises, Cohance is better placed to participate in specialised intermediates and performance-led chemistry opportunities within the agricultural value chain.

The industry is also shifting toward sustainable solutions, including bio-based products, low-toxicity formulations and precision technologies, while facing regulatory pressures. The market is projected to grow from US$ 258.2 billion in 2025 to US$ 348.1 billion by 2035 at a CAGR of 3.0%.

Within this evolving landscape, the agrochemical CDMO opportunity is particularly compelling for companies that have invested in innovator relationships ahead of the cycles recovery. Registration milestones with global innovators, particularly first-time qualification campaigns with Japanese and European majors, represent long-lead, high-barrier commercial opportunities that, once secured, generate durable and predictable revenue streams. The revenue contribution from such programmes is inherently skewed toward the second half of any given year, reflecting the season- led phasing of agricultural products and the multi-quarter timelines of registration and qualification campaigns.

Opportunities & Cohance relevance

• The agrochemicals market is emerging from a prolonged destocking cycle, with recovery momentum building through H2 FY27.

• The industry is shifting structurally from generic, volume- driven chemistry toward innovator-led proprietary active ingredients, creating a growing pipeline of CDMO programmes that require sophisticated development partners.

• European and Japanese innovators are directing their development pipelines toward differentiated, low-toxicity, and sustainable crop protection chemistry, opening qualification opportunities for compliant and capable partners.

• Generic pricing pressure from Chinese competitors is accelerating the consolidation of innovator supply chains around partners with proven registration credentials and process reliability.

• Multi-year registration timelines create durable, high- barrier revenue streams once qualification campaigns convert to commercial supply, with the growth to return very soon as registered programme scale.

Why is the agrochemicals market a meaningful opportunity Rs.

The agrochemicals market offers meaningful opportunity for Cohances Speciality Chemicals vertical, driven by food security imperatives and the shift towards sustainable crop protection. Its chemistry depth and R&D capabilities support participation in higher-value agricultural intermediates.

ABOUT THE COMPANY

Cohance Life sciences operates through three business verticals: Pharma CDMO, API+ and Speciality Chemicals. Its capabilities span process research and development, analytical services, scale-up and commercial manufacturing, supported by specialised platforms in complex small molecules, high- potency chemistry, ADCs and oligonucleotides.

The Company serves global pharmaceutical innovators, biotechnology companies, generic pharmaceutical customers and speciality-chemical innovators through operations in India and the United States. Further information on the business model, facilities and scientific platforms is provided in the Corporate Overview section of this Annual Report.

Financial performance

Consolidated revenue from operations was Rs.2,268.6 Crore in FY26, a decline of 13.0% compared with FY25. Pharma CDMO along with Speciality Chemicals contributed 52% of revenue and niche technologies contributed 16.2%. The movement reflected destocking in two large commercial products, product-specific issues in API+, price pressure in parts of Speciality Chemicals and a disruption of approximately Rs.61 Crore in the formulation business at Nacharam.

Gross margin was 70.8%, an improvement of 209 basis points. Adjusted EBITDA was Rs.477.5 Crore, representing a margin of 21.0%, while standalone adjusted EBITDA margin was 24.6%.

The consolidated adjusted PAT (after adjusting for one-time ESOP, merger and acquisition costs and exceptional items, net of tax) was Rs.184.4 Crore, while reported PAT attributable to shareholders was Rs.179.3 Crore.

Free cash flow was Rs.173 Crore, and capital expenditure was Rs.215.4 Crore. Cash and cash equivalents, including liquid investments, were Rs.322.4 Crore, while net cash defined as cash less debt was Rs.152.7 Crore at year-end.

Ratios pursuant to the SEBI Listing Regulations

Ratio	Formula	31st March, 2026	31st March, 2025 (Restated)	Change(%)
Current Ratio	Current Assets / Current Liabilities	3.31	2.91	13.75%
Debt-Equity Ratio	Total Borrowings / Total Equity	0.02	0.06	-66.67%
Debt Service Coverage Ratio	(PAT + Finance Cost + Depreciation) / (Finance Cost + Principal Repayment)	1.93	1.87	3.08%
Return on Equity / Return on Investment	Net Profit after Tax / Average Equity	0.05	0.12	-57.35%
Inventory Turnover Ratio	Cost of Goods Sold / Average Inventory	1.31	1.54	-14.71%
Trade Receivables Turnover Ratio	Revenue from Operations / Average Trade Receivables	2.96	3.64	-18.61%
Trade Payables Turnover Ratio	Purchases / Average Trade Payables	2.84	2.66	6.64%
Net Capital Turnover Ratio	Revenue from Operations / (Current Assets - Current Liabilities)	1.74	2.36	-26.18%
Net Profit Ratio	Net Profit after Tax / Revenue from Operations	11.26%	19.61%	-42.57%
Return on Capital Employed (ROCE)	EBIT / Average Capital Employed	6.96%	14.22%	-51.06%

Reasons for change more than 25%:

i) Debt-equity Ratio: On account of repayment of loans during the year.

ii) Return on equity ratio / return on investment ratio : On account of decrease in profit during the year in comparison to previous year.

iii) Net capital turnover ratio: On account of decrease in revenue during the year in comparison to previous year.

iv) Net profit ratio : On account of decrease in profit during the year in comparison to previous year.

v) Return on Capital employed : On account of low Earnings before Finance cost, other income and income taxes during the year in comparison to previous year

Internal Control Framework and Adequacy

The Company has instituted a comprehensive internal control framework designed to safeguard assets, ensure the accuracy and integrity of records and mitigate the risk of errors, irregularities and fraud. These controls also support operational effectiveness and disciplined execution across the organisation.

Cohance Lifesciences internal control systems are appropriately structured to reflect the scale, complexity and evolving nature of its operations. Internal financial controls have been established in compliance with the requirements of the Companies Act, 2013 and encompass key business processes relevant to the Companys activities. Controls operate at both entity-wide and process-specific levels, ensuring compliance with applicable laws and internal policies, while enabling reliable financial and operational reporting.

Human Capital and ESG Human Capital

Cohance continued to strengthen technical, scientific and leadership capabilities across the organisation. Key priorities included capability development, employee engagement, diversity, safety and the integration of teams following the merger. Detailed workforce disclosures are presented under Human Capital and in the BRSR.

Sustainability

Environmental priorities include energy efficiency, renewable-energy adoption, water stewardship, waste reduction and responsible sourcing. FY26 performance, targets and initiatives are presented under Natural Capital and in the BRSR.

Workplace safety and employee well-being remain key priorities, fostering a productive and inclusive work environment. Further information on workforce-related disclosures is provided in the Business Responsibility and Sustainability Report (BRSR), which forms part of this Annual Report.

Risk Management

Cohances Enterprise Risk Management framework is aligned with ISO 31000 and the COSO framework and supports structured identification, assessment, mitigation and monitoring of business risks.

Principal areas under review include operational resilience, regulatory and quality compliance, data integrity, cybersecurity, customer and programme concentration, supply-chain continuity, talent retention, geopolitical developments and climate-related risks. Further details are presented in the Enterprise Risk Management section of this Annual Report.

Developments after the reporting period

Following the close of FY26, the Company continued to advance selected scientific, operational and leadership initiatives across the platform. The subsidiary completed many GMP client audit with no critical observation, readiness work for upcoming manufacturing batches and a third GMP suite, final release of ADC drug substance for GMP manufacturing and support for a clients ADC IND submission in May 2026.

CAUTIONARY STATEMENT: SOME OF THE STATEMENTS MADE IN THE MANAGEMENT DISCUSSION AND ANALYSIS MENTIONING THE COMPANYS OBJECTIVES, ESTIMATES, PROJECTIONS, EXPECTATIONS, AND PREDICTIONS MAY BE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF APPLICABLE SECURITIES LAWS AND REGULATIONS. THE EXPECTATIONS ARE BASED ON REASONABLE ASSUMPTIONS;THE ACTUAL RESULTS MAY DIFFER FROM THE IMPLIED.THE COMPANYS OPERATIONS ARE DEPENDENTON MANY EXTERNAL AND INTERNAL FACTORS BEYONDTHECOMPANYS CONTROL.THE COMPANY ASSUMES NO RESPONSIBILITYTO PUBLICLY AMEND, MODIFY OR REVISE ANY FORWARD-LOOKING STATEMENTS BASED ON SUBSEQUENT EVENTS OR INFORMATION.