Anthem Biosciences Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Anthem Biosciences reported a strong Q1 FY26 with consolidated revenue of INR 540 crores and an EBITDA margin of 38%, driven by ramping CRDM business and increased demand for commercial products. The company added 54 kiloliters of custom synthesis capacity and moved two Phase 3 products to commercial. Management cautioned about the lumpiness of the business and the exceptional nature of the quarter, while maintaining a positive outlook for GLP-1 and new modalities.

Highlights

  • Consolidated revenue for the operation was INR540 crores for the quarter.

  • The CRDM business delivered INR452.7 crores revenues out of that.

  • The EBITDA was INR214.3 crores with the margins, EBITDA margins at 38%.

  • PAT, which is the profit after tax, was 135.8 million (INR 13.58 crores) with PAT margins at 24%.

  • Our net cash position as of June 30th, 2025 is INR784.8 crores.

  • 54 kiloliters of custom synthesis capacity added in Q1 FY26.

  • Two Phase 3 products moved to commercial, increasing commercial portfolio from 10 to 12.

Concerns

  • Q1 FY26 was an exceptional quarter, and the business is inherently lumpy.

  • Gross margins saw a quarter-on-quarter dip due to product mix (higher R&D revenues in Q4 FY25).

  • Development success of products under development is not guaranteed.

Key financials

  1. Consolidated Revenue ₹540 Cr +15%QoQ
  2. EBITDA ₹214.3 Cr
  3. EBITDA Margin 38%
  4. PAT ₹13.58 Cr
  5. PAT Margin 24%
  6. Net Cash Position ₹784.8 Cr

What they filed

Q1 FY27: revenue down 22.6%, net profit down 11.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue525 498 483 540 550 +5%423 −15%611 +27%418 −23%
EBITDA195 160 195 191 218 +12%157 −2%267 +37%151 −21%
Net profit162 124 83 136 173 +7%93 −25%190 +129%120 −12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹540.2 Cr Total
  • CRDM Business ₹452.7 Cr 83.8%
  • Specialty Ingredients ₹87.5 Cr 16.2%

Capital allocation

high confidence
  • Capex Capex disclosed from this treasury (net cash)
    • Unit 2 and Unit 3 capacity expansion ₹150 Cr
    • Unit 4 expansion (groundbreaking in Q1 FY26)
    • Expanding lab capacity
    So unit 2 and 3, we have a capital commitment of about close to INR150 odd crores, which we will be completing and getting unit 2 and unit 3 completely commissioned. Unit 4 is still in very early stage right now of planning... So a large portion of this net cash, we will be deploying towards our capacity expansion, because both unit 2, unit 3 and also unit 4 will be funded from this treasury, what we have.
  • Debt Debt disclosed
    Our net cash position as of June 30th, 2025 is INR784.8 crores, nearly INR750 crores of cash in the company.
  • Liquidity Cash ₹784.8 Cr Sufficient net cash to fund capacity expansion.
    Our net cash position as of June 30th, 2025 is INR784.8 crores, nearly INR750 crores of cash in the company. ... So a large portion of this net cash, we will be deploying towards our capacity expansion, because both unit 2, unit 3 and also unit 4 will be funded from this treasury, what we have.

Guidance & targets

Revenue

  • Overall Growth (FY25 vs FY26) Revenue · FY26 · Medium confidence about 20%
    But if I look at the outlook as such, see, historically, we have been delivering about 20% CAGR growth. And our outlook remains more or less the same in terms of delivering a similar about 20% growth on a year-on-year basis, FY25 versus FY26 and going forward as well.

    — Ajay Bhardwaj

  • Overall Growth (Historical 10-year) Revenue · FY26 · Medium confidence about 22%
    We will still maintain that for the year. Our growth should be in the range of our historical 10-year historical growth, which is about 22%.

    — Ajay Bhardwaj

Capacity

  • Custom Synthesis Capacity (Unit 2) Capacity · this calendar year · High confidence 76 kiloliters
    Balance 76 kiloliters is yet to be completed, which we should be doing in this calendar year.

    — Management

  • NeoAnthem Custom Synthesis Capacity Capacity · this financial year, by this half year of this financial year closure · High confidence 25 kiloliters
    And the 25 kiloliters that we were saying to add in NeoAnthem, that should also get done by this financial year, by this half year of this financial year closure.

    — Management

  • NeoAnthem Fermentation Capacity Capacity · this calendar year · High confidence 40 kiloliters
    Fermentation 142 kiloliters, we are adding 40 kiloliters more in NeoAnthem, which should also get done in this calendar year.

    — Management

  • Unit 4 Expansion Details Capacity · next couple of months · Medium confidence details to be posted
    Details on capacity additions, we will post it out to the investors once that is firmed up. It should happen over the course of the next couple of months.

    — Management

Market context

  • EBITDA, Gross, PAT Margins Margin · FY26 · Medium confidence steady
    Amlan, broadly we are looking at steady margins for both on an EBITDA and a gross margin and also on a PAT margin level. So directionally, we have done about close to about 38% on an overall number for an FY '25 basis. And I think we'll continue to be in the same zip code of from an EBITDA margin as well as from a gross margins level.

    — Management

What to watch in Q2 FY26

Custom Synthesis Capacity Completion (Unit 2)

By calendar year end
Current 54 kiloliters added in Q1 FY26
Target Balance 76 kiloliters completed

Why it matters

Completion of planned capacity expansion is crucial for future revenue growth and meeting customer demand.

Balance 76 kiloliters is yet to be completed, which we should be doing in this calendar year.

Risks & concerns

  • Business Lumpiness

    medium

    The nature of the business is lumpiness, leading to variability between quarters.

    Management acknowledged

  • Geopolitical Uncertainty

    medium

    The company operates in a politically uncertain environment, requiring adaptability.

    Management acknowledged

  • Success of Products Under Development

    medium

    The success of products currently under development is not guaranteed, impacting future revenue streams.

    Management acknowledged

Q&A highlights

8 direct
Gross Margin Dip Quarter-on-Quarter Direct
On a material margin level, if I look at it, year-on-year, it has been the same. If I look at on a quarter-on-quarter basis from Q4 versus Q1, we had a higher percentage of our R&D revenues on CRDMO business, because of which, as a percentage of revenues, roughly, it was about 16% versus 11%, which is right now for this quarter, which is in line with the overall FY25 number, because of which, Q4 of FY25, the material margin was slightly higher.

Clarifies the reason for QoQ gross margin contraction, attributing it to product mix (higher R&D revenue in Q4 FY25) rather than a fundamental issue.

Asked by Vivek Agrawal

Pricing Environment and MFN Policy Impact on CDMOs Direct
We are not hearing any negotiation on pricing pressure from our customers other than the normal, what they say that when volumes go up, people want to discuss pricing. But there is no undue pressure on pricing that we are seeing from our customers at all.

Addresses concerns about potential pricing pressure on CDMOs due to geopolitical rhetoric and MFN policies, indicating no immediate impact.

Asked by Bansi Desai

Progression of Late-Phase Pipeline Products to Commercial Direct
The two which were in the filing stage have got approved. So, we had some of these molecules move on to the commercial part right now. So, the commercial portfolio has increased from 10 to 12. Phase 3 has reduced from 10 to 8.

Provides an update on the progression of the pipeline, showing successful commercialization of two molecules and a shift in the portfolio.

Asked by Bansi Desai

Strategy for Capacity Expansion (Building Ahead vs. Waiting for Contracts) Direct
We have always expanded ahead of the curve and that's the nature of this business. You have to anticipate your customer's needs and you've got to add those new modalities. So you have to operate at the edge of technology development as well.

Explains the company's proactive strategy for capacity expansion, building ahead of confirmed contracts to meet future customer needs and technological advancements.

Asked by Sajal Kapoor

Impact of Tariffs and Feasibility of US Manufacturing Facility Direct
We are supplying the active or the advanced intermediate. So, will these qualify as pharma itself is sometimes, a question mark, because some of the products when they are under development, they are still chemicals and not drugs. So, this is all a bit murky as to how tariffs will affect some of the, definitely the development and the other thing... As far as putting up a facility in US, I mean, that is a very long term process.

Addresses concerns about potential tariff impacts and the feasibility of setting up manufacturing in the US, indicating limited direct impact from tariffs and long-term challenges for US facility setup.

Asked by Saion Mukherjee

GLP-1 as a Future Growth Driver Direct
We are definitely participating in the GLP-1 space. And we have a number of customers whom we are, a number of pharma companies whom we are talking about, we are supplied samples to, and we are in very active conversation on developing this. Yes. So going forward, Anthem will be a player, a serious player in GLP-1.

Highlights GLP-1 as a significant future growth area where Anthem is actively involved and expects to be a leading player.

Asked by Bansi Desai

ADC Space Capabilities and Commercialization Progress Direct
In terms of capabilities, so we have done the conjugation. We have done the cytotoxic drug substance as well. So capabilities wise, we have the full capabilities from an ADC point of view across multiple projects... Currently, there is no project that has gone commercial, but we hope to change that in the future.

Confirms Anthem's comprehensive capabilities in the ADC space, indicating readiness for future commercialization despite no current commercial projects.

Asked by Amlan Jyoti Das

CRDMO Customer Type Split (Originator vs. Generics) Direct
So our CRDM business is pure play, innovative focused. We don't do any generic work on the CRDM part of the business.

Clarifies that Anthem's CRDM business is focused solely on innovative products and originators, distinguishing it from generic-focused CDMOs.

Asked by Devanjan Bhakta

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Driven by CRDM

Anthem Biosciences reported a robust start to FY26 with consolidated revenue reaching INR 540 crores for the quarter. The CRDM business was the primary growth engine, contributing INR 452.7 crores, while specialty ingredients added INR 87.5 crores. This performance translated into an EBITDA of INR 214.3 crores, achieving a healthy margin of 38%, and a PAT of INR 13.58 crores with a 24% margin. The company ended the quarter with a strong net cash position of INR 784.8 crores.

Proactive Capacity Expansion Underway

The company continues its strategic capacity expansion, adding 54 kiloliters of custom synthesis capacity in Q1 FY26. An additional 76 kiloliters for custom synthesis in Unit 2 and 25 kiloliters in NeoAnthem are slated for completion by calendar year-end and H1 FY26, respectively. Furthermore, 40 kiloliters of fermentation capacity in NeoAnthem is also expected by calendar year-end. Groundbreaking for Unit 4 expansion occurred in Q1 FY26, with further details on capacity additions anticipated in the coming months.

Pipeline Progression and New Modalities Focus

Anthem successfully advanced two Phase 3 molecules to commercial status, increasing its commercial portfolio from 10 to 12 products, while the Phase 3 pipeline reduced from 10 to 8. The company is actively involved in new modalities such as ADCs, peptides, and RNA products, having commissioned commercial-scale facilities for ADCs and peptides. While full capabilities exist in the ADC space, no projects have reached commercialization yet, but management expresses optimism for future breakthroughs.

Strategic Outlook and Growth Drivers

Management reiterated its long-term outlook of achieving approximately 20% year-on-year growth for FY26 and beyond, aligning with its historical 10-year CAGR of 22%. The growth is expected to be driven by the ramping up of CRDM revenue streams and increased demand for existing commercial products. Anthem is also positioning itself as a serious player in the GLP-1 space, actively engaging with customers and developing solutions, anticipating it to be a significant future growth driver.

Navigating Pricing Environment and Geopolitical Uncertainties

Despite global discussions around MFN policies and drug pricing, Anthem has not experienced undue pricing pressure from its customers. Management emphasized the company's ability to adapt to uncertain political and economic environments, drawing on its 20-year track record of navigating crises. The company believes potential tariffs would have limited direct impact due to its supply chain structure, and establishing a manufacturing facility in the US is considered a very long-term and challenging prospect.

Capital Allocation and Funding Strategy

Anthem's capital expenditure for Unit 2 and 3 is committed at approximately INR 150 crores, with Unit 4 planning in early stages. The company plans to fund its capacity expansions primarily through its substantial net cash position of INR 784.8 crores. This strong liquidity allows Anthem to invest in growth initiatives without relying heavily on external borrowings, maintaining a positive net cash position.

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