Why is Cohance Lifesciences Ltd falling/rising?

Recent Price Performance and Market Sentiment

The stock hit a new 52-week low of ₹311.15 during intraday trading on 13-Feb, underscoring the persistent selling pressure. Over the past week, the share price has declined by 7.01%, significantly underperforming the Sensex’s modest 1.14% loss. The trend worsens over longer periods, with the stock down 29.56% in one month and a staggering 71.48% over the last year, while the Sensex has gained 8.52% in the same timeframe. Year-to-date, the stock has lost over 40%, compared to a 3.04% decline in the benchmark index.

On the day in question, the stock opened sharply lower by 8.31% and traded with high volatility, experiencing an intraday price swing of 5.03%. The weighted average price indicates that most trading volume occurred near the day’s low, signalling strong bearish sentiment. Additionally, the stock has been trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – reinforcing the negative technical outlook.

Financial Performance and Valuation Concerns

Despite a high return on equity (ROE) of 21.07%, which indicates management efficiency, the company’s financial health has deteriorated. The average debt-to-equity ratio remains at zero, suggesting a conservative capital structure. However, the stock’s valuation, with a price-to-book ratio of 3.2, is considered fair but is trading at a discount relative to its peers’ historical averages.

More troubling are the company’s recent earnings and sales figures. Net sales have declined by 1.98%, and the company reported very negative results for the quarter ending December 2025. Profit after tax (PAT) for the quarter stood at ₹40.19 crores, down 61.2% compared to the average of the previous four quarters. Operating profit growth has been sluggish, averaging just 4.15% annually over the past five years, which is insufficient to inspire investor confidence.

The return on capital employed (ROCE) for the half-year is at a low 13.59%, and the operating profit to interest coverage ratio has dropped to 10.47 times, the lowest recorded. These indicators point to weakening operational efficiency and profitability, which have weighed heavily on investor sentiment.

Structural Risks and Market Impact

One of the most significant concerns is that 100% of the promoter shares are pledged. In a falling market, this creates additional downward pressure on the stock price, as any margin calls or forced selling by lenders can exacerbate declines. This structural risk, combined with the company’s poor recent earnings and sales performance, has contributed to the stock’s sustained underperformance.

Investor participation has increased slightly, with delivery volumes rising by 5.46% on 12 Feb compared to the five-day average, but this has not translated into price support. The stock remains liquid enough for moderate trade sizes, but the prevailing negative sentiment dominates trading activity.

Long-Term Underperformance

Over the longer term, Cohance Lifesciences has failed to keep pace with broader market indices. The stock has delivered negative returns of 35.05% over three years and 35.50% over five years, while the Sensex has gained 36.73% and 60.30% respectively during these periods. This persistent underperformance reflects fundamental challenges in growth and profitability that have yet to be addressed.

In summary, the sharp decline in Cohance Lifesciences Ltd’s share price on 13-Feb is driven by a combination of disappointing quarterly results, weak sales growth, poor profitability metrics, and structural risks related to promoter share pledging. These factors have culminated in sustained selling pressure, pushing the stock to new lows and signalling caution for investors.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →