Detailed Narrative
Q2 & H1 FY26 Financial Performance Overview
Anthem Biosciences reported a robust H1 FY26, with consolidated revenue from operations reaching ₹1,090 crores. The company achieved an EBITDA of ₹480 crores, translating to a strong margin of 41.4%. Net profit for the half-year stood at ₹309 crores, with a PAT margin of 26.6%. The net cash position significantly improved to ₹993 crores by September 30, 2025, reflecting healthy financial management.
CRDMO and Specialty Ingredients Business Performance
The CRDMO business was a primary growth driver, contributing ₹926 crores to H1 FY26 revenue. The specialty ingredients segment delivered ₹163 crores, experiencing a temporary decline as capacity was strategically diverted to meet high demand in the CRDMO sector. Management reiterated that the specialty ingredients business remains solid and is expected to recover in the latter half of the year, contributing to overall growth.
Capacity Expansion and Utilization
Anthem commissioned CP6 and CP7 blocks in Unit-II, adding approximately 130 kiloliters of capacity with a CAPEX of ₹182 crores. These new capacities are projected to generate over ₹300 crores in revenue based on asset turnover. Unit-III, with a gross block and CWIP of around ₹450 crores, including fermentation and biotransformation, is seeing work-in-progress (WIP) of ₹55 crores, with a target to reach ₹100-150 crores by year-end. The green-field Unit-IV project, a significant investment of ₹1,000 crores, is on track for commissioning within two years, aiming for a long-term revenue potential of ₹650 crores.
GLP-1, Biosimilars, and Peptides Pipeline
The company is making steady progress in the GLP-1 and biosimilars space, working with innovators and aiming for vertical integration, including fermentation of key fragments like P29. An unutilized plant has been fully repurposed for biosimilar development, positioning Anthem as a second source for a marketed biosimilar. Additionally, Anthem is pursuing 10 early-stage, novel, non-GLP peptide programs, focusing on areas like oncology and metabolism, with plans to significantly expand peptide manufacturing capacity in Unit-IV.
Employee Costs and Margin Outlook
Employee costs as a percentage of sales were maintained at approximately 12.5% for H1 FY26, down from 16-17% in the prior year due to a reduction in ESOP charges (₹8 crores in H1 FY26 vs. ₹36 crores in H1 FY25). Management expects to sustain EBITDA margins at the upper end of 36-37% for the full fiscal year, driven by operating leverage and cost management. FX income contributed 2-3% to margins in H1 FY26.
Inventory Management and Customer Dynamics
Inventory levels decreased due to the successful in-house manufacturing of intermediates, which were previously sourced externally. Additionally, some customers requested a reduction in their inventory for commercial products. While this led to a temporary slowdown in supply for certain base molecules, management noted strong demand for new inquiries and continued growth from existing customers, indicating a healthy business pipeline.