Anthem Biosciences Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Anthem Biosciences reported a strong H1 FY26 with consolidated revenue of ₹1,090 crores, EBITDA of ₹480 crores (41.4% margin), and PAT of ₹309 crores (26.6% margin). The company expanded its commercial portfolio to 14 molecules and commissioned new capacities in Unit-II. While specialty ingredients saw a temporary decline, management expressed confidence in overall growth and the long-term potential of new capacities and pipeline.

Highlights

  • Consolidated revenue from operations grew to ₹1,090 crores for H1 FY26, demonstrating good growth.

  • EBITDA for H1 FY26 reached ₹480 crores, with a healthy EBITDA margin of 41.4%.

  • PAT for H1 FY26 was ₹309 crores, reflecting a strong PAT margin of 26.6%.

  • Net cash position improved significantly to ₹993 crores by September 30, 2025.

  • Successfully commissioned Unit-II CP6 and CP7, adding approximately 130 kiloliters of capacity.

  • Increased the number of commercial molecules supported from 10 to 14, with 4 new approvals in H1 FY26.

Concerns

  • Specialty ingredients business reported a decline in H1 FY26 due to fungibility with CRDMO capacity.

  • Inventory levels reduced due to in-house manufacturing of intermediates and customer requests to lower their inventory.

  • Quarterly performance can be lumpy, though the overall trend is upwards.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹1,090 Cr
  • EBITDA
    ₹480 Cr
  • EBITDA Margin
    41.4%
  • PAT
    ₹309 Cr
  • PAT Margin
    26.6%
  • Net Cash Position
    ₹993 Cr

H1 FY26

  • ESOP Charge
    ₹8 Cr
  • FX Income
    ₹34 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 (H1 FY26)
₹1,089 Cr Total
  • CRDMO Business ₹926 Cr 85.0%
  • Specialty Ingredients ₹163 Cr 15.0%

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Unit-II CP6 and CP7 capacity expansion ₹182 Cr
    • Unit-IV Phase 1 expansion (green-field project) ₹1,000 Cr
    • Unit-III gross block plus CWIP (including fermentation and biotransformation) ₹450 Cr
    Okay. On Unit-II, CP 6 and CP 7, roughly 130 kiloliters have been commissioned right now. All put together, close to about Rs. 182 odd Cr of CAPEX have gone in CP 6 and CP 7. It's completely unutilized at this point of time with lower capacity utilization. Based on our asset turnover which is roughly about 1.6x - 1.7x, we feel the revenue potential will be similar from here, close to about Rs. 300 plus Cr is what we can look at generating from CP 6, CP 7. On NeoAnthem, as it stands for 30th September 2025, our gross block plus CWIP is about Rs. 350 Cr. Plus. There is couple of additional blocks on fermentation, which is yet to be commissioned. So, all put together, our gross block will be close to about Rs. 450 Cr plus over there. This includes the high-end manufacturing of peptides and high-potent compounds, plus fermentation and biotransformation is also what we are adding. We expect that on a full-stream basis, if it comes up, the long-term target on this is also to deliver about 1.4x - 1.5x on asset turnover. On Rs. 450 Cr capital base, we can generate close to about Rs. 650 Cr of revenues on a long-term basis. I am not talking about near-term, but it will take some time in terms of peptides and high-potent and other fermentation block to be filled up completely. Okay. We have started the work already on Unit-IV and we have informed all of you about that. I think the civil works are in very good shape. When you visit next time, we will show it to you as well. This unit should be, as we have said, consistently commissioned in two years from now. It's a green-field project and it's a significant investment we are making there to the tune of Rs. 1,000 Cr.
  • Liquidity Cash ₹993 Cr Net cash position improved to Rs. 993 Cr at the end of 30th September, 2025.
    Our net cash position at the end of 30th September, 2025 has improved to Rs. 993 Cr of cash in hand.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 36%-37%
    On an overall basis, going forward, we will be on the upper end of the 36%-37% that we have always guided towards on the EBITDA margins level.

    — Gawir Baig

Revenue

  • Revenue CAGR Revenue · long-term (10-15 years) · High confidence 20% odd
    In terms of growth, we have said that if you look at Anthem's history, our CAGR is 20% odd there for the last 10-15 years. We hope to be able to maintain that and that is what we are focused on.

    — Ajay Bhardwaj

Capacity

  • Unit-IV Commissioning Capacity · within 2 years · High confidence in two years from now
    This unit should be, as we have said, consistently commissioned in two years from now.

    — Ajay Bhardwaj

  • Unit-IV Custom Synthesis & Fermentation Capacity Capacity · High confidence 400 kiloliters
    Bansi, in terms of capacity, what we are looking at is close to about give or take 400 kiloliters on custom synthesis and fermentation about 100 odd kiloliters, give or take, because this is the initial plan as we progress towards the civil work and we feel that there's a possibility of changing the mix down the line.

    — Gawir Baig

  • Unit-IV Peptides Capacity Capacity · Medium confidence quadruple or at least triple
    Then we will definitely have, we have in mind, creating capacity, which can quadruple or at least triple what we have now.

    — Ajay Bhardwaj

Revenue Potential

  • Unit-IV Revenue Potential Revenue Potential · long-term · Medium confidence ₹650 crores
    On Rs. 450 Cr capital base, we can generate close to about Rs. 650 Cr of revenues on a long-term basis.

    — Gawir Baig

  • Unit-II CP6 & CP7 Revenue Potential Revenue Potential · Medium confidence ₹300+ crores
    Based on our asset turnover which is roughly about 1.6x - 1.7x, we feel the revenue potential will be similar from here, close to about Rs. 300 plus Cr is what we can look at generating from CP 6, CP 7.

    — Gawir Baig

What to watch in Q3 FY26

Specialty Ingredients Business Recovery

next quarter
Current Declined in H1 FY26
Target Hold up in rest of the year

Why it matters

To confirm the strategic capacity allocation is temporary and the segment's underlying health remains strong.

We do see a decline this year in this half in specialty ingredients, but this will hold up in the rest of the year.

Risks & concerns

  • Specialty ingredients business slowdown

    medium

    Decline in H1 FY26 due to capacity diversion to CRDMO, but expected to hold up in rest of year and is a solid business.

    Analyst downplayed

  • Customer performance impacting growth

    low

    Growth depends on how customers perform, but Anthem has good customers who are doing well.

    Management acknowledged

  • Lumpy quarterly performance

    low

    Quarterly variations are possible due to customer demand, but the overall trend is upwards.

    Management acknowledged

Q&A highlights

7 direct
Specialty Ingredients Business Decline Direct
Overall, if you see our specialty ingredients business, even though in some years it is flat, it has consistently grown. It's trending upwards. We expect that also to continue. But at the same time, if we are over demand for our facilities, for our CDMO business or CMO business in that case, we would actually tend to divert resources to that. That's always good news for us. We do see a decline this year in this half in specialty ingredients, but this will hold up in the rest of the year. But there's nothing to worry about. The business is solid and it continues to grow.

Analyst questioned the decline in specialty ingredients, and management explained it as a strategic diversion of capacity to the busier CRDMO segment, reassuring about its long-term growth.

Asked by Bansi Desai

Sustainability of Employee Costs Direct
Yes, you're absolutely right. In H1 of last year, we had employee cost, which was roughly about 16% or 17% of sales and that included about Rs. 36 Cr of ESOP charge that we had taken into consideration because that was the first year of the ESOP allotment. For this half, we have taken ESOP charge of roughly about Rs. 8 Cr. Rs. 4 Cr each broadly for Q2 and Q2. Net of that, the employee cost has largely been around that 12.5% odd as a percentage of sales for both H1 of last year as well as H1 of this year. We feel that that's a decent enough employee cost percentage, which will continue to be in.

Analyst inquired about the sustainability of lower employee costs, and management clarified it was partly due to reduced ESOP charges, confirming the current ~12.5% as a sustainable base.

Asked by Bansi Desai

Revenue Potential of New Capacities (Unit-II, Unit-III, Unit-IV) Direct
Okay. On Unit-II, CP 6 and CP 7, roughly 130 kiloliters have been commissioned right now. All put together, close to about Rs. 182 odd Cr of CAPEX have gone in CP 6 and CP 7. It's completely unutilized at this point of time with lower capacity utilization. Based on our asset turnover which is roughly about 1.6x - 1.7x, we feel the revenue potential will be similar from here, close to about Rs. 300 plus Cr is what we can look at generating from CP 6, CP 7. On NeoAnthem, as it stands for 30th September 2025, our gross block plus CWIP is about Rs. 350 Cr. Plus. There is couple of additional blocks on fermentation, which is yet to be commissioned. So, all put together, our gross block will be close to about Rs. 450 Cr plus over there. This includes the high-end manufacturing of peptides and high-potent compounds, plus fermentation and biotransformation is also what we are adding. We expect that on a full-stream basis, if it comes up, the long-term target on this is also to deliver about 1.4x - 1.5x on asset turnover. On Rs. 450 Cr capital base, we can generate close to about Rs. 650 Cr of revenues on a long-term basis.

Detailed breakdown of revenue potential from newly commissioned and upcoming capacities (Unit-II, Unit-III, Unit-IV) was provided, giving investors a clearer picture of future growth drivers.

Asked by Nikhil Mathur

Impact of US Biotech Funding Drought on Anthem Direct
To answer your second part of your question, Srinath, are we seeing some effect of the funding? But we hear mixed voices. We have a good addition of new customers, which always points to, I think in the past, what has changed is in the past, every project was probably getting funded, but now they are very selective. There is new funding available. When I talk to our clients they say we see green shoots, the winds are changing. But we are seeing a steady flow of new good customers. But yes, in the past, anybody who had a project, they would get funding. That's not the case now. Investors are more selective. Luckily, we have very good people on the ground, what we say our sales force, our feet on the ground, and we are able to get the funnel of good new inquiries is still being maintained. We are not unduly worried in both cases, that even if there is now new funding sort of becoming opening up, that's also good for us. For up until now, we haven't really, really seen the impact of this drought of funding, not on Anthem at least.

Management confirmed that while the funding environment for biotech is selective, Anthem has not been negatively impacted and continues to secure new customers and inquiries.

Asked by Srinath

Progress on GLP-1 and Biosimilars Direct
Again, we are progressing steadily in that area. As you can imagine, we have to produce PV batches and all the rest of it, which is what is going on. Then we have to get the plant approved by FDA. In the near term, you and I may define near term differently, but it won't happen in the next two quarters. But, we will see after that, some positive traction in these areas where we are doing biosimilars and then the GLP in the biosimilars. Then GLP-1, that's an opportunity which we are working with quite strongly. We are working with a bunch of innovators as well in this whole area.

Management provided an update on the strategic GLP-1 and biosimilars initiatives, indicating steady progress and significant long-term potential, though not expecting meaningful revenue in the immediate next two quarters.

Asked by Damayanti Kerai

Repurposing of Unutilized Plant for Biosimilars Direct
Very good point. That is the one that is going in for Biosimilar. That is the one which we have completely repurposed without any significant investment that has been retooled to develop that Biosimilar, which is already a marketed Biosimilar. We are going to be the first, the second source, then the first source because they are shifting production out of the west.

Management confirmed the repurposing of a previously unutilized plant for biosimilar production, positioning Anthem as a key second source for a marketed biosimilar.

Asked by Damayanti Kerai

Peptides Program Details and Backward Integration Direct
These are all non-GLP novel peptides where we are working on for our CDMO customers, the 10 peptide programs and in an early stage at this point of time. The intent of building up the commercial facility was to ensure that as these programs move from early to late phase and late phase to commercial, if it does move, then we have the capacity to go ahead and service this program. ... We will have to make P29 plus the assembly. That's where we are fully integrated and we are not going to make amino acids.

Detailed explanation of Anthem's 10 novel, non-GLP peptide programs, their early-stage nature, and the company's strategy for full backward integration (making P29 and assembly, not amino acids) to ensure cost control and supply chain security.

Asked by Sanjay Kumar

2 min read 6 chapters

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.

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