Anthem Biosciences Limited

Anthem Biosciences delivered a strong financial performance for FY26, with consolidated revenue from operations reaching ₹2,124 crores and total revenue, including other income, at ₹2,280 crores, marking an 18% year-over-year growth. The company's EBITDA for the full year grew 31% to ₹990 crores, with EBITDA margins expanding by 420 basis points to 43.4%. Profit after tax for FY26 also saw a 31% increase, reaching ₹592 crores with PAT margins of 26%. Q4 FY26 was the highest revenue quarter ever, with consolidated revenues of ₹611 crores (26% YoY growth) and PAT surging 130% YoY to ₹190 crores, achieving a PAT margin of 28.7%.

The CRDMO business was a primary contributor to Anthem's success, accounting for 83% of the total revenue and delivering ₹1,773 crores in FY26, an 18% growth over the previous year. In Q4 FY26, the CRDMO segment grew 31% YoY to ₹513 crores. Management highlighted that destocking impacts witnessed in FY26 are largely resolved, with expectations of restocking positively influencing future top and bottom lines. The company continues to strengthen relationships with big pharma, having added two notable clients last year, and anticipates further broadening these connections, especially as small biotech projects in Phase 3 get acquired by larger entities.

Anthem Biosciences is undertaking a significant capacity expansion with Unit 4, its largest project to date, involving an investment of approximately ₹1,200 crores over FY27 and FY28. This expansion aims to add 365 kiloliters of custom synthesis capacity and 100 kiloliters of fermentation capacity, effectively doubling custom synthesis and adding 50% to fermentation capabilities. Phase 1 of Unit 4 is targeted for completion by March 2028. For FY27, the company projects a capex of roughly ₹700 crores, followed by about ₹500 crores in FY28, ensuring future readiness and supporting anticipated growth.

The Specialty Ingredients segment contributed ₹352 crores to FY26 revenue, with Q4 FY26 revenue at ₹98 crores, an 8% YoY growth. Management noted that growth in this segment had been 'patchy' due to CRDMO projects sometimes cannibalizing shared facilities. To address this, Anthem is dedicating a new facility within Unit 4 for specialty ingredients, aiming for a 20% growth trajectory similar to its CRDMO business. This strategic move is expected to provide the necessary focus and capacity for consistent growth in products like serratiopeptidase, vitamins, and probiotics, catering to Indian and ROW markets.

Anthem Biosciences maintains a strong competitive position in the peptides market, particularly for GLP-1 type peptides, boasting extremely competitive costs of goods that rival even Chinese manufacturers. The company is actively engaging with major players to offer India-based alternatives to imports. Management emphasized its differentiation through a technology-led approach to problem-solving, which is highly valued by clients. This focus on advanced technology and cost-effectiveness positions Anthem favorably to capitalize on the growing GLP-1 market as new formulations are launched.

The company is heavily investing in technology to build a more agile, science-led, and future-ready CRDMO platform. This includes exploring continuous manufacturing, automation, green chemistry, and relevant AI applications to optimize processes and improve margins. While actively searching for inorganic growth opportunities both in India and abroad, Anthem maintains a disciplined approach, committing to acquisitions only if they make strategic sense and involve the 'right asset.' The company's strong net cash position of ₹1,375 crores provides flexibility for such strategic initiatives.