Anthem Biosciences: A Robust Q2 and H1 FY26 Driven by CRDMO and Strategic Expansions

Anthem Biosciences Limited has reported a strong financial performance for the second quarter and first half of fiscal year 2026, showcasing consistent growth and strategic advancements. The company's consolidated revenue from operations for H1 FY26 reached an impressive ₹1,090 crore, marking a significant 26.3% year-on-year increase. This growth was primarily fueled by its Contract Research, Development, and Manufacturing Organization (CRDMO) business, which delivered ₹926.7 crore in revenue, growing 32.3% YoY. The Specialty Ingredients segment contributed ₹163.6 crore. Profit after tax (PAT) for H1 FY26 stood at ₹309.2 crore, up 26.6% YoY, with PAT margins at 26.6%. The company's net cash position also strengthened, reaching ₹993.4 crore as of September 30, 2025.

Segmental Performance and Margin Strength

The CRDMO business continues to be the cornerstone of Anthem's growth, demonstrating consistent performance over the past five quarters. This segment's robust revenue stream underscores the company's strong capabilities and client relationships. While the Specialty Ingredients business experienced a decline in H1 FY26, management clarified that this was a strategic allocation of fungible capacities to meet the high demand in the CRDMO segment. The company anticipates a recovery in Specialty Ingredients in the latter half of the year as new capacities become fully available.

Anthem's operational efficiency is reflected in its strong EBITDA margins. For H1 FY26, EBITDA stood at ₹480.4 crore, with margins at 41.4%. Management has guided for full-year EBITDA margins to be at the upper end of the 36%-37% range, emphasizing their focus on cost control and operating leverage. This disciplined approach ensures that various cost elements, as a percentage of sales, remain in check, contributing to sustained profitability.

Strategic Expansions and Future Opportunities

Anthem Biosciences is actively expanding its manufacturing footprint and capabilities. The company recently completed the Unit II expansion in Harohalli, inaugurating the final block of 76 kL custom synthesis capacity in November 2025. This expansion, totaling approximately 130 kL, is expected to generate over ₹300 crore in revenue potential. Unit III, NeoAnthem, is also largely operational, with all blocks except the fermentation block commissioned. The fermentation block is anticipated to be operational by the end of the year, and Unit III is already generating revenue, with a target of ₹100-₹150 crore by year-end.

The most significant strategic initiative is the greenfield Unit IV project, involving an investment of ₹1,000 crore. This unit is projected to double the company's capacities by adding approximately 400 kL in custom synthesis and 100-200 kL in fermentation, with commissioning expected within two years. This expansion is crucial for Anthem to become a leading player in high-end manufacturing of peptides, high-potent compounds, fermentation, and biotransformation, targeting a long-term asset turnover of 1.4x-1.5x and revenues of around ₹650 crore from this capital base.

Anthem is also aggressively pursuing high-growth opportunities in biosimilars and generic GLP-1 semaglutide. The company has repurposed an unutilized plant for biosimilar development, aiming to be a key supplier. For GLP-1, Anthem's strategy involves vertical integration, including in-house manufacturing of the fermentation fragment, which provides a significant cost advantage and positions them as a strong B2B player for the Indian market once innovator patents expire.

Outlook and Investor Confidence

Management expressed confidence in sustaining growth, reiterating their historical CAGR of 20% over the last 10-15 years. The company's diversified portfolio, now including 14 commercial molecules (up from 10), and a strong funnel of new inquiries further support this outlook. While quarterly results might show some lumpiness due to customer demands, the overall trend is expected to remain upward. Anthem's disciplined capital allocation, transparent disclosures, and proactive approach to market trends reinforce investor confidence in its long-term value creation potential.