Cohance Lifesciences: How Union Budget 2026 Fuels the $1 Billion Vision

The Union Budget 2026 has emerged as a landmark policy document for the Indian pharmaceutical and life sciences sector. For Cohance Lifesciences Limited (formerly Suven Pharmaceuticals), a leading global Contract Research Development and Manufacturing Organization (CRDMO), the budget provisions align closely with its long-term strategic goals. With a clear focus on high-tech manufacturing, R&D incentives, and the ambitious 'Biopharma Shakti' initiative, the government has set the stage for companies like Cohance to accelerate their journey toward global leadership.

The Biopharma Shakti Initiative: A ₹10,000 Crore Catalyst

The centerpiece of the 2026 Budget for the healthcare sector is the 'Biopharma Shakti' (Strategy for Health Advancement through Knowledge, Technology, and Innovation). With an outlay of ₹10,000 crores over the next five years, this scheme is designed to transform India into a global biopharma manufacturing hub. For Cohance Lifesciences, which specializes in complex chemistries and Antibody-Drug Conjugates (ADCs), this initiative provides a direct tailwind. The focus on domestic production of biologics and biosimilars matches Cohance's recent investments in advanced technology platforms and its focus on innovator-led partnerships.

Strengthening the R&D and Clinical Trial Ecosystem

Innovation is the backbone of the CRDMO model. The Finance Minister's proposal to create a network of 1,000 accredited clinical trial sites across India is a significant move for companies engaged in drug development. Furthermore, the upgrading of seven existing National Institutes of Pharmaceutical Education and Research (NIPERs) and the establishment of three new ones will ensure a steady pipeline of skilled talent. Cohance, which is currently expanding its leadership team and science platforms, stands to benefit from this enhanced academic-industrial synergy.

Taxation Reforms: Safe Harbor and MAT Reductions

The Union Budget 2026 introduced the Income Tax Act 2025, effective from April 1, 2026. A critical highlight for the export-oriented R&D sector is the rationalization of safe harbor rules. The government has proposed a common safe harbor margin of 15.5% for IT and R&D services, while substantially raising the threshold for availing these rules from ₹300 crore to ₹2,000 crore.

For Cohance, which reported H1 FY26 revenues of ₹1,104.88 crore, this provides much-needed tax certainty and reduces the administrative burden of transfer pricing audits. Additionally, the reduction of the Minimum Alternate Tax (MAT) from 15% to 14% will improve the company's post-tax cash flows, allowing for higher reinvestment into its manufacturing facilities.

Infrastructure and Dedicated Chemical Parks

The budget's push for 'City Economic Regions' and the launch of dedicated chemical parks on a cluster-based plug-and-play model are set to lower the logistics and compliance costs for manufacturers. Cohance, which operates multiple facilities in India, can leverage these specialized zones for future expansions. The government's commitment to increase public capital expenditure to ₹12.2 lakh crore further ensures that the industrial backbone required for global supply chain diversification remains robust.

Strategic Alignment with the 2030 Vision

Cohance Lifesciences has publicly stated its goal to reach $1 billion (approximately ₹8,500 crore) in revenue by 2030 with mid-30s EBITDA margins. The Budget 2026 measures, particularly the focus on 'Biopharma Shakti' and the 'Electronics Components Manufacturing Scheme' (which impacts the Performance/OLED segment where Cohance is active), provide the regulatory and fiscal support needed to hit these targets. The emphasis on 'Atmanirbharata' in critical minerals and chemicals also helps de-risk the supply chain from global disruptions.

Market and Investor Sentiment

Market analysts, including those from top brokerages like Jefferies, have recently highlighted Cohance as a top pick in the ADC space. The budget's focus on high-value manufacturing and supply chain de-risking reinforces this bullish sentiment. While the company faced short-term headwinds in Q2 FY26 due to pharma destocking and deferred shipments, the structural reforms in the budget suggest a strong recovery from FY27 onwards. The stock's low beta and strong promoter holding (66.41%) make it an attractive proposition for long-term investors looking to play the India-as-a-global-CDMO-hub theme.

Conclusion

Union Budget 2026 acts as a bridge between India's current manufacturing capabilities and its future as a global innovation powerhouse. For Cohance Lifesciences, the budget is not just about tax savings; it is about the creation of a comprehensive ecosystem that rewards science-led growth. As the company integrates its recent acquisitions and scales its technology platforms, the fiscal and policy support from the 2026 Budget will be instrumental in achieving its $1 billion revenue milestone by the end of the decade.