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Anthem Biosciences: FY26 Ends With Record Q4, Rising Margins, and a Major Capacity Buildout

Anthem Biosciences closed FY26 with its highest revenue quarter to date, while also expanding profitability. For Q4 FY26, revenue from operations rose to INR 6,109 million, up 26.4% year on year. EBITDA increased 52.2% to INR 3,184 million and margins expanded to 48.1%, compared with 42.1% in Q4 FY25. Profit after tax more than doubled to INR 1,898 million, with PAT margin rising to 28.7%.

For the full year, FY26 revenue from operations increased 15.2% to INR 21,243 million. The company delivered sharper earnings growth than revenue growth: EBITDA rose 30.8% to INR 9,896 million, and PAT rose 31.1% to INR 5,918 million. EBITDA margin improved by 420 bps to 43.4%, and PAT margin improved to 26.0%.

The management positioned this performance as the result of growth in the core CRDMO franchise along with disciplined cost management. On the call, the CEO noted that the company intends to build a science-led, future-ready CRDMO platform, while the CFO emphasized that despite not providing formal guidance, the company believes the ingredients for long-term growth are being put in place.

Segment mix stays CRDMO-led

Anthem continues to be predominantly a CRDMO business, with Specialty Ingredients playing a smaller but meaningful role. In Q4 FY26, CRDMO contributed INR 5,128 million of revenue from operations, while Specialty Ingredients contributed INR 981 million. In percentage terms, this translates to 83.9% CRDMO and 16.1% Specialty Ingredients.

For FY26, CRDMO revenue was INR 17,727 million, up 17.7% year on year. Specialty Ingredients revenue was INR 3,516 million, up 3.9% year on year. The management described Specialty Ingredients as a flow business with multiple customers and without a conventional order book structure, unlike the CRDMO business where supply is tied to program milestones and long lead times.

Management also attributed patchiness in Specialty Ingredients growth to shared capacity constraints. The CEO stated that when the same facilities are used for both Specialty Ingredients and NCE-focused CRDMO work, new CRDMO projects can cannibalize capacity allocation for Specialty Ingredients. The company expects this to improve as dedicated facilities are added as part of the Unit IV buildout.

Financial summary

Note: EBITDA figures include other income as disclosed by the company.

Margin expansion and the role of other income

A key feature of FY26 was margin expansion. EBITDA margins rose to 43.4% for the year, and Q4 margins reached 48.1%. The company disclosed that EBITDA includes other income. For FY26, other income was INR 1,558 million. This included other operating income such as forex gain (net) and RoDTEP incentive of INR 634 million, and financial and non-operating income of INR 924 million.

In Q4 FY26, other income was INR 512 million. The company further disclosed that in the Q4 FY26 context, other operating income included forex gain (net) and RoDTFF incentive of INR 229 million, and financial and non-operating income of INR 283 million.

This disclosure matters for investors because it frames how much of reported EBITDA is supported by non-core income items. While the operational performance appears strong, comparability across quarters and years can be influenced by volatility in forex and incentives.

The CFO also linked gross margin improvement to execution actions. On the call, he stated that backward integration for one intermediate reduced external sourcing dependence and improved material margins, which started showing up in Q3 and Q4.

Pipeline conversion, customer behavior, and demand signals

Management commentary touched on demand behavior, especially inventory cycles at customers. The CEO stated that destocking had been present across many customers, but the company still delivered strong growth. He added that the destocking phase is mostly behind the business and that a swing toward restocking could be supportive for growth.

On program mix and pipeline movement, management offered several reference points:

• In FY26, commercial molecules accounted for 60.8% of revenue contribution.
• The company has 14 commercial molecules.
• The Phase 3 pipeline stands at 10 molecules.

On the call, the CFO stated that the four molecules that went commercial during FY26 contributed around 8% to 9% of the company’s revenues at present, while also noting that ramp-ups typically take two to three years and peak sales estimates are usually four to five years from launch.

The company emphasized its positioning with emerging biotech customers. The CFO stated that the additions to the Phase 3 pipeline were not lateral entries and were molecules where Anthem was engaged from earlier stages, progressing into Phase 3. He described the Phase 3 basket as a mix across technology areas including ADC-related work, peptides, oligonucleotides, and biotransformation.

Unit IV: the defining investment cycle

The clearest strategic initiative discussed across the investor presentation and the call was Unit IV, a greenfield expansion at Harohalli, Bangalore.

From the investor presentation:

• Construction is underway at a 30 acre site.
• Phase I investment is INR 12,000 million.
• Phase I capacity addition is 365 KL custom synthesis and 100 KL fermentation.

From the concall, management added a more explicit capex phasing and timeline:

• Phase I capex is about INR 1,200 crore across FY27 and FY28.
• Completion targeted by March 2028 (towards the latter half of March 2028).
• Expected FY27 capex roughly INR 700 crore and FY28 roughly INR 500 crore.

The CFO also positioned the project as future-ready infrastructure. He stated that current expansions in Unit II and Unit III provide headroom and that capacity is not a constraint at present. Unit IV is being built so the company has the wherewithal to service more programs as they come in, including from early-stage biotech innovators and big pharma.

Capital structure and balance sheet flexibility

Anthem ended FY26 with a materially higher net cash position. Net cash increased from INR 6,242 million as of March 31, 2025 to INR 13,743 million as of March 31, 2026. In the quarterly highlights, net cash rose from INR 12,312 million as of December 31, 2025 to INR 13,743 million as of March 31, 2026.

Management linked this cash position to optionality, including the ability to pursue inorganic opportunities. The CEO stated the company is not averse to acquisitions in India or abroad but will not do acquisitions for the sake of acquisitions and is scouting for the right target.

Items that affected reported profitability

Two notable disclosed items impacted reported profitability and comparability:

1. Exceptional item from new Labour Codes

The company disclosed an exceptional item relating to the Government of India notifying four Labour Codes on November 21, 2025. The FY26 net expense recognized under Exceptional Item was INR 243.91 million. The company stated that during Q4, management reassessed the impact based on revised remuneration structure, leading to a credit of INR 9.80 million in Q4.

2. Other income impact

As noted, EBITDA includes other income which was higher year on year in both FY26 and Q4.

Takeaways for investors

Anthem’s FY26 performance shows a business that is growing steadily while improving profitability, with CRDMO continuing to dominate the revenue mix. The Q4 performance was particularly strong, with the highest ever quarterly revenues and a meaningful jump in EBITDA and PAT margins.

The next phase of the story is execution through Unit IV. Phase I entails a large, multi-year capex cycle with clearly stated capacity additions and a targeted completion by March 2028. The balance sheet appears positioned to support this investment, given the sharp rise in net cash.

At the same time, investors should track the quality of earnings given the disclosed role of other income in EBITDA and the presence of regulatory-driven exceptional items. The company’s ability to sustain margins through a higher scale and a large capex program will be a key point to watch as FY27 unfolds. */