Anthem Biosciences LtdQ2 FY25Pharmaceuticals & Biotechnology

Anthem Biosciences Ltd

Q2 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Revenue guidance

Category 3

→Anthem Biosciences expects steady growth with a historical CAGR of around 20% year-on-year, maintaining this outlook for FY25 vs FY26 and beyond.
→Growth is driven largely by commercialized molecules, with multiple products seeing increased demand across several clients.
→There is significant headroom for growth across existing commercial products, but sales volumes may not increase every quarter due to customer stocking patterns.
→The company plans capacity expansions ahead of demand to support future growth, anticipating customers’ needs and new modalities.
→Development-stage products and new modalities like peptides and ADCs will contribute to growth over multiple years, though with longer gestation and smaller volumes initially.
→Growth in CRO (Contract Research Organization) segment is expected to be driven by adding scientific talent and expanding lab capacities.
→Customer expansion includes both innovators and emerging biotech, with no significant pricing pressure currently anticipated.

Category 3

→Anthem Biosciences targets steady margins in EBITDA, gross margin, and PAT margin levels, maintaining around 38% EBITDA margin as seen in FY25.
→The company anticipates about 20% CAGR growth in revenues year-on-year for FY26 and beyond, consistent with its historical performance.
→Growth drivers include increased demand for commercial products and capacity expansions in custom synthesis and fermentation.
→Capacity utilization in custom synthesis is around 70%, with expansions ongoing, indicating potential for further revenue growth.
→New product segments like GLP-1 peptides are expected to be exciting growth drivers over the next 2-3 years.
→Management is cautiously optimistic, preferring to wait on upcoming quarters before updating outlook but remains confident in medium-term growth.
→EBITDA and gross margins expected to remain steady without significant fluctuations.

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→Anthem Biosciences currently holds about INR 785 crores of net cash.
→The company plans to deploy a large portion of this cash towards capacity expansion (units 2, 3, and 4).
→Unit 4 is in early planning stages, and detailed capital expenditure plans will be shared once finalized.
→Management indicated that if attractive borrowing rates are available, they would consider taking on debt.
→However, the company aims to maintain a positive net cash position and prefers funding expansions primarily through internal accruals/net cash.
→No specific announcements of new fundraising through debt or equity have been made as of now.

→Anthem Biosciences has multiple ongoing projects with clients, both in development and commercialization stages, indicating a robust order book.
→The company works with global pharmaceutical companies and handles several late-stage Phase 3 molecules, some moving to commercialization.
→They have around 10 molecules in Phase 3 as of March 2025, with 2 recently approved and commercialized, indicating active project pipeline.
→Anthem is also involved in lateral projects and becoming a second source for existing products, adding to their pending order prospects.
→Capacity expansions (units 2, 3, and upcoming unit 4) are aligned with the expected growth in order volumes.
→Management has emphasized multi-year, multi-product engagements with clients, suggesting committed order flow over coming years.
→The company expects continued demand from established commercial molecules and projects under development to steadily contribute to revenues.

Yes

→Anthem Biosciences is undertaking capacity expansion with a capital commitment of about INR 150 crores to complete Unit 2 and Unit 3 commissioning.
→Unit 4 expansion is in early planning stage; detailed plans and capex numbers will be shared once finalized.
→Expansion funding will primarily come from internal accruals and existing net cash balance of about INR 785 crores.
→The company has recently commissioned 54 kiloliters of custom synthesis capacity in Q1 FY26; balance 76 kiloliters to be added by end of calendar year.
→Additional 25 kiloliters peptide synthesis capacity built in NeoAnthem unit as part of custom synthesis expansion.
→An additional 40 kiloliters of fermentation capacity is being added at NeoAnthem, expected to complete in calendar year.
→Anthem follows a strategy of investing ahead of demand to avoid capacity shortages and seize growth opportunities.

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