<h1>Anthem BioTargets Steady Growth Expanding Capacity</h1>

Ashwin Thakker

— 1 min read
  • Sales Outlook: Expects ~20-22% CAGR growth year-on-year for FY25-FY26 and beyond.
  • Margin Outlook: Aims for steady EBITDA and gross margins, aligning with FY25 levels (~38% EBITDA).
  • Capacity Expansion: 134 KL custom synthesis and 40 KL fermentation capacity additions planned by calendar year-end.
  • New Molecules: Two Phase 3 molecules commercialized, expanding portfolio to 12.

Anthem Biosciences Limited kicked off FY26 with robust performance, setting a solid foundation for the year. The company's Q1 earnings call revealed a clear forward-looking strategy focused on sustained growth, stable margins, and significant capacity expansion. This analysis delves into their guidance for sales, profitability, and strategic initiatives, highlighting their commitment to innovation and market leadership.

Steady Growth and Stable Margins Ahead

Anthem Biosciences projects robust financial growth, guiding for a consistent 20-22% Compound Annual Growth Rate (CAGR) in revenue for FY25-FY26 and beyond. While Q1 FY26 saw "exceptional" performance due to strong commercial product demand, the company maintains a stable long-term outlook. Management anticipates steady profitability, stating,

"Broadly we are looking at steady margins for both on an EBITDA and a gross margin... we'll continue to be in the same zip code of from an EBITDA margin as well as from a gross margins level."

This reflects a commitment to maintaining efficiency, with EBITDA margins expected around 38% for the full year.

Capacity Expansion and Strategic Vision

Anthem is significantly expanding its operational footprint, adding 134 kiloliters (KL) of custom synthesis capacity and 40 KL of fermentation capacity by calendar year-end. Unit 2 and 3 expansions, costing around INR 150 crores, are largely funded by the company's cash reserves, with Unit 4 also in early planning. New modalities like ADCs and peptides are progressing from lab to commercial scale, though their significant revenue contribution is still in development. Management states,

"We have always expanded ahead of the curve."

This proactive strategy positions Anthem to capture future market opportunities and adapt to evolving client demands.

Anthem Biosciences has outlined a clear path for sustained performance, driven by consistent revenue growth and stable margins. Strategic investments in capacity expansion and the advancement of new modalities underline their commitment to long-term leadership in the CDMO space. While acknowledging market uncertainties, the company's proactive approach to technology and client partnerships positions it well for future success.

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