Anthem Biosciences Limited (ANTHEM) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Anthem Biosciences Q3 and F526 Earning Conference Call hosted by JM Financial Institutional Securities Ltd. As a reminder, all participant lines will be in the lesson-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Chalkar from JM Financial Institutes and Securities Limited. Thank you, and over to you, sir.

Thank you, Daneesh. Good afternoon and welcome to all the participants on Anthem Biosciences 3QFY26 earnings call hosted by JN Financial. Today on this call, we have with us from the management, Mr. Ajay Bharadwaj, Managing Director and Chief Executive Officer, and Mr. Gawir Bhair, Chief Financial Officer. I will now hand over the call to Mr. Ajay Bhardwaj for his opening remarks. Thank you, and word to you, sir.

Thank you, Amir. Namaskar. I'm, this is Ajay Bhardwaj, CEO and founder of Anthem Biosciences. I would like to start by reporting that our consolidated revenue from operations for the nine months, ending on December 31st, 2025, for this financial year, that is, was 1,513 crores. The CRDMO business out of which was 1260 crores and the speciality region delivered 254 crores. A very positive growth in EBITDA. EBITDA was stronger than ever at 671 crore, which gave us an EBITDA margin of 41.5%. This does include an additional income, other income of 105 crore, which was on account of forex gains. Road debt and financial and other non-operating income. When you compare to the previous year, which was 72 crores, this time it's grown to 105 crores. Now, our PBT, the four exceptional items, was 572 crores. We're very happy with this number. And out of this year, there was one one-time exceptional item of 25.4 CR, and it's largely because in November 21st, 2025, the government notified four new labor codes, and as a result of which, we had to take an exceptional item, exceptional of 25.4 crores. Now, Pat, after tax, was 402 crores, with our Pat margins at 24.8%. When you compare this with previous year, this is after the exceptional item, previous year was 25.7%. So, in fact, Pat has grown from 369 crores in the previous nine months to 402 crores. So, our consolidated revenue from operations for the quarter, now Q3 I am going to talk about, was 423 crores. The out of which, 333 crores was CRDMO and 90 crores were speciality ingredients. And the beta for the quarter was 191 crores, which is 41.8%. And this also includes, as I said, that there is other income of 33.5 crores. PBT, before exceptional item, was 156 crores. And PAC, that is profit after tax, was 93 crores, and PAC margin was 20.3%. So, in conclusion, I would like to say our nine-month FY26 performance has shown a steady progress in revenue term. And with improving margin profile, our EBITDA has grown at 23%, and PBT before exceptional item has grown around by about 20%. Our quarterly revenue performance was lower than the Q3 of the previous financial year, and that was influenced largely by the higher base that we had that time, although the margin improvement utilized the revenue discrepancy. The underlying demand, and then conclusion, our underlying demand remains robust. And our historically strongest quarter, which is the fourth quarter, is still ahead. And we are confident of delivering a strong finish to this financial era. And this in a nutshell has been Anthem's performance for the nine months and the quarter that we just finished, that is Q3. So, I, I...

Thank you so much, sir. Ladies and gentlemen, we will begin with the question and answer session. Anyone who wishes to ask a question may press start and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A first question comes from the line of Vivek Agarwal from Citigroup. Please go ahead.

Yeah, thank you. Thanks for the opportunity. Just want to understand your full year guidance, right? So, in the nine months, the top line was in the low double digit, and the full year guidance was somewhere around 20% plus. So, is it still holding that guidance during that you also talked about that the 4-2 is going to be strong? So, just some color on the full year guidance, actually, that will be helpful.

So Vivek, Kaveh will respond to that.

So Vivek, with respect to our nine-month performance, although revenue has grown at about 11-12%, we will have a strong finish to the year, quarter four. It has traditionally been the highest quarter for us because that's the nature of the CDMO business, and we should be looking at a good quarter of four as well. What we had mentioned was, you know, we would look at a revenue growth estimate of about 20% with EBITDA margins remaining constant, margin profile remaining steady. We'll also look at a margin growth of 20% both on EBITDA and back terms as well. What we are seeing right now is our margin has improved from last year's numbers to current year's numbers, and that has been on account of several factors which we had talked about in terms of backward integration, material margins have improved, we have kept our cost under control from an operating leverage point of view, we will continue to grow on the margin, and that will reflect in a bit of performance which will be upwards of 20% from a guidance Thank you.

Thanks. And given that, we have seen a structural, we have seen margin expansion, right? So, how much is likely to be structural, right? So, are we seeing some flow through in FY27 as well, right? Because it looks like that the growth margins have expanded meaningfully and the margins have expanded in, EBITDA margins have expanded in this quarter, despite increasing employee expansion, etc., right? So, is it clear to assume that in 27 and 28, for example, the margins made trend significantly higher than this year?

Our aspiration is always to have the margin trend pointing north, and if you look at our document as well, what we had submitted to SEBI, when we were doing the IPO, we had mentioned that for one of the customer products, a lot of intermediates was being outsourced, and hence our China procurement had gone up, had shot up in one particular year. What had happened over the course of this financial year is we have completely discontinued that China supplies because now we are, we manufacture the intermediate in-house by procuring the raw materials, so we are completely backward integrated, and hence that shift is seen in the material margin improvement. So structurally, we want to ensure that material margin continues to improve. There is, on products as well, we want to have yield improvement so that that could benefit us As well as our customers, so material margin we want to move and not. Other expenses as well as employee costs are more. Less variable, more fixed in nature. So unless we are looking at a significant expansion, which we are keeping in mind that new assets are getting added, but this thing fixed in nature, there would be a lot of some operating leverage which should come in play. Having said so, we are operating at a good level from an EBITDA margin point of view, which is upwards of 40%, and we want to keep our margin steady. Though aspiration-wise, we want to grow, but we will keep our margin steady.

Understood. And last question on revenues, right? So, you have talked about that some slowdowns because of high base, but is there any disruption in a couple of one or two products, etc., and whether these products are expected to come back maybe in the 4th year or next year? If you can provide some balance. Thank you.

Yeah, this is a business question for sure. A lot of our peers, and this is a global phenomenon, because you've had a very turbulent last year or so, in terms of the uncertainty in the marketplace, and uncertainty certainly with regard to. Funding as well as our customers' future plans. So, with many companies, they have de-stocked a little bit and they have rationalized their stocks to lower level of safety stocks. So, that is one reason why there has been a little slowdown. Otherwise, we were very confident of delivering 20% growth in the top line as well. However, that situation will be in our mind and what we hear from them is that that will be corrected in the subsequent year. So, we are very hopeful, we are very positive. Nothing has changed materially for us on the ground, and we continue to add more customers in the biotech space, and also have added, actually in this year, some large pharma customers as well. The numbers are not significant yet, but once you add big pharma customers, some of these numbers can become very significant. So, we are very, very positive about the FY27 and FY28.

That is great. So you have added one large pharma customer this year, right? So can you provide some more clarity like advanced molecules or some, for example, molecules in the starting phase like phase 1 or phase 2?

No, we've added more than one large customer, so some of it is development work, some of these products have been approved, so they are going into the market, but as you know, when a new product approval comes in, it takes time to build sales, but what's good is that we are in with the customer on supply of advanced intermediates, and should the product grow, and that of course depends on the success in the marketplace, But obviously, big companies always have a better possibility of achieving success. We will grow with them. So, you know, our bet is on the fact that as our customers grow, we will ride on that to grow strongly. At the same time, we've actually, as we said before, we've added four new approvals and four new products in the last year, in this year rather, which have gone to, got approval. So we feel we're in a very good position to benefit from them subsequently.

Understood, sir. Thank you. All the best.

Thank you. Thank you, Vivek.

Thank you so much, sir.

Our next question comes from the line of Shayan Mukherjee from Longora. Please go ahead.

Yeah, hi. Thanks for taking my question. On next year, you know, you indicated things should get better. So should we expect growth closer to what your trajectory has been around 20% in fiscal 27 on back of, you know, the existing commercial product and the new launches that you had ramping up?

That's right. It's a tough question to answer. I am very optimistic, but can I give it when we're still, we're not finished with this year. When we are more into the next year early, we'll have more visibility. But obviously, you know, as we have said before, and that has not changed, our business tends to be lumpy. It tends to be good in some quarters, not so good in other quarters. But directionally, we are looking, you know, northwards in terms of top line and bottom line, and we expect to maintain. So, if you say, in the next five years, will we have a CAGR of what we've had in the last five years? I expect so. But will it be immediately next year? I can't say until I'm a little bit into that year. It's a little bit still distant from us. But, you know, it won't be for the want of trying. We have been very good in terms of discipline, in terms of execution, and that hasn't changed. What has also not changed is our customers' confidence in us and the regulatory environment for us. If anything, with the new announcement, which is, you know, that India and U.S. are friends again all over, you know, there is nothing, no tensions in trade, that will also, you know, which has actually put a lot of unease in our customers' minds, that also has, and then with the EU-India trade deal, we expect that things are now on even keel. So, that's always good for business, and I'm very positive.

Great. Just to, you know, get some color because a lot of moving parts here. So if I understand correctly, you know, the last few years you have, you know, quite a good ramp up in some of your commercial products. So when you look forward for the next couple of years, which will be a bigger growth driver for Anthem would be the ramp up of your recently commercialized products like the four that you had or the ones which are already in the market. You could get more volumes, market share. How should we think? Or, you know, you also talked about, you know, lateral contracts. So I'm wondering, can those sort of start ramping up pretty quickly? So these are the, like, key drivers that I see if you can, you know, give some color as to which one would be the most, or if you can rate the importance of these drivers for you, at least in this autumn.

Yeah, again, you asked me a very tough question. My simple answer would be all of the above. We would love to see all of them grow. We expect that the commercial products, which are still the ones that we are already supplying to, which are our established products, they have still a lot of headroom to grow. And, you know, there are many markets where, major markets where approvals are awaited. So, I expect that, you know, there we'll have some very decent numbers. As you rightly said, some of these new products, I expect that they will be a little slower to take off in the next year, if you are looking at next year, but, you know, three or four years from now, we could be, like, laughing all the way to the bank, as they say, because these would become major products. There is a lot of effort on our side to go laterally into companies, and that is also yielding proof. So, This is a hard one to answer. You know, they have shown a lot of interest and if we hit a jackpot with one or two of them, it will be wonderful. But, you know, can I predict it at this point? I don't have a crystal ball. I am afraid not. But if you say cumulatively all these three activities, that is what matters. Put together, it will give us a stronger foundation and a stronger base and therefore we will be more steady. So, I am not worried, and you rightly, Sian, you have pointed out the three, you know, corners on which we are, edifices on which we are building, four being our speciality ingredients.

Also, Sam, the existing molecules, the base is higher. For the new molecules, they've just gone commercial, base is lower. So, from a base effect point of view, if you look at it, the percentage growth might be slightly higher for the newer molecules, just because the base is too small for them. Existing molecules, even if they continue to grow at a decent rate over there, that will help us, that will compensate, that will, the overall basket will then show a good growth across both existing and new.

That's understood. Just if I can ask one last question, before I go into material cost to sales, you explain, you know, it is a gross margin improvement because of intermediate supplies now coming to India. Is the full impact already there in the numbers, or, you know, how should we think about this number in the quarters, please? Thanks.

The impact is there in the numbers, but see, that's with respect to a particular product in the CDMO revenue stream. So, the material margin is a component which is a weighted average across multiple products in CDMO as well as products in the speciality ingredient side. But to answer your question, the full impact is there because we don't source the intermediate anymore from China, and we're completely now backward integrated with the filings, everything taken care of. So outsourcing is nil right now. So the full impact is taken.

I tend to, this level of margin should sustain, in your view, the growth margin.

Yes, should be. Oh. Should be a little bit. Thank you.

Thank you. Our next question comes from the line of Bansi Desai from J.P. Morgan. Please do it.

Yeah, hi. Thanks for taking my question. So, my first question is on our pipeline, if you can comment on how this has grown, particularly early phase, phase 1, phase 2. We know phase 3, in order of 10 molecules, 4 have been commercialized. So, probably you would have 6 in the phase 3 as of today. If you can, you know, so if you can just update on that, and out of the early phase, you know, any indication as to, you know, how many of them are likely to move into safety in your view in the next one to two years.

So, one thing with respect to early phase molecules, we still have similar numbers, about 130 to 140 numbers, which are there on the pipeline side. I think on the phase 2 program, it will be about 5 or 6 of them, which will be in the phase 2 side, which we would expect to move towards phase 3 in the next couple of years, you know, 18 to 30 months, sort of a time frame. Subject to, you know, they're clearing the development hurdles, because in our business, it's also subject to the clinical trials. On the pipeline on early stage is still robust. On the phase three side, we haven't added any more from what it was in quarter two of last year. Four molecules went commercial, so till at six, there was one particular molecule. I think it has come back to the company for additional work. So we are waiting for an outcome of that to understand what is the status of the phase 3 molecule. But as of now phase 3 number remains the same.

We generally hear, you know, improvement in the biotech funding environment, you know, in the recent months. Also, there has been a lot of demand given the funding environment has been week all together in the last two, three years. So, are we likely to see, you know, benefits of that, you know, stickling to us, you know, as we go ahead? You know, are we likely to see more expansion of our pipeline, or these products especially?

Yeah, that's a very good observation, Bansi, because We have actually, you know, your estimation is absolutely correct. We are seeing an improvement in environment. A lot of many requests for RFQs have come in the last one quarter, and suddenly, you know, it wasn't looking so healthy for a while now, but it is turning around, and that's what we hear from our customers as well, which is always good news for us. And if the rest of the geopolitical team settles down, of course, that is something you and I can't control. But if it happens, and all indications are that at least on the trade side, we are now not at loggerheads with major Western partners, I think it will be really good for us. So, yeah, you're absolutely right. I think new things are going to happen. And the rest is, of course, you know, we have to, we can just hope and pray that the success of molecules in the marketplace gets better. So, and that's something that. Again, we have no control on it, but if that happens, again, Anthem will be a direct beneficiary.

That's good to know. And maybe my second question, therefore, you know, on rather, you know, semi-ambitized API, you know, given the product is going to go generic very soon, you know, we have spoken in the past about, you know, manufacturing API for domestic generic players here once the product was off-pating. So, how should we think about that opportunity? We also, at the same time, hear China being extremely competitive. I know you mentioned in the past that you are also going to be competitive in terms of pricing, but, you know, how do you see this whole opportunity is going out for us?

Well, you know, as we have said repeatedly, we are very much in the mix. However, many companies in India are also taking a big bet on it. But again, I would say we are among the very few who are completely backward integrated. That is, Ansem's mantra has always been that we, as you saw, you know, improvement of margins this year. We, if we are dependent on some, for critical raw materials or a critical input from outsources outside of India, or which are not under our control, we work quite assiduously to make sure that we reverse that situation. So, even in the case of Semaglutide, we are arguably the most backward integrated company in the country. So, over the long term, we see a very good play in it. We are in conversations and, you know, in advanced stage of supplying raw materials for different types of testing to many of the customers who, you know, many of our customers within India who are playing in that space. So, yeah, it is very much a position for us that we have taken. But I just want to say, for us, peptide is more than just GLP-1 semazutide. We are working with innovators and we are working with many other small biotech because this is an area of very large interest. So, Anthem has made a sizable investment in developing peptide chemistry. And so we work with innovators to ensure that we work on novel molecules as well. So GLP is a more immediate opportunity. However, as we can all imagine, you yourself mentioned China will be very aggressive. But, you know, we believe we will be able to face the competition. But, that's more immediate, but we also have a long-term play in websites.

Alright, thank you so much, I'll be back to you.

Thanks, thank you.

Thank you. The next question comes from the line-up from JN.

Thank you for giving a question. I have one question on the capacity utilization.

Is it possible for us to give utilization across

unit 1, 2, 3, and are we fine with the available capacity for the 20% growth expectation for next two years?

Yeah, on capacities, we have no problem. You know, we've issued expansion units just now, even unit 2. So, Garver will give you the numbers, the details. But yeah, capacity-wise, we are good. And this can take care of the next couple of years. Meanwhile, our unit force will also become available. So, as we have said repeatedly, we have to be bold in planning expansion and also have a fair degree of first capacity to see that this business is now going to, it's pointing in this direction and make those threats in advance. So, capacity-wise, you're okay. Sorry, Gavid, you want to elaborate?

Yeah, I'll elaborate. So, if you, specifically on unit-by-unit capacity utilisation that you have asked for, unit 1 is a small-scale facility, 25 kiloletres custom synthesis capacity, and we are almost operating at about close to 75% occupancy over there. Unix 2, where we have... We have 376 kilolitres capacity from a manufacturing point of view. And in the last quarter, we had just commissioned the CP7, which is a new block, which was about 76 kilolitres. So that block is yet to be utilized. Leaving that aside, on 300 kilolitres of capacity, we are roughly about 75% utilized over there. So we have close to about 20% incremental capacity to add up over there. Neo Anthem, which is the third unit, that's still underutilized because that also is in a very early stage from a capacity, from a ramping up more. So there we have significant scope to add more utilization. So, that's on the custom synthesis side. Fermentation, new Anthem is yet to be commissioned. On unit, on Anthem fermentation, 140 kL, we would be about 46-47% capacity utilized. So, we have decent capacity to continue on the growth path.

Right. And we do have scope for further brownfield expansion in unit 2, unit 3, or this is what we have added so far.

Unit 1, full. Unit 2, full, no scope of expansion. The scope of expansion which was there, we added in this financial year, where we added one particular detail. Okay. Unit 3, after this initial completion of this expansion, which is the fermentation capacity, what we have done is we have constructed shells, which could be repurposed. So, the reason why we have constructed shells is it prevents any element of civil work and hence any disruption which could happen onto the overall infrastructure in unit 3. So, we have constructed three different shells which could be repurposed and where we can quickly spit out on custom synthesis or fermentation or any other form of expansion which you want to do. So, there are three blocks which are empty blocks in unit 3.

Right. And in unit 4, have you finalized yet on the modalities of which we would be making in the new unit or is it yet to be done?

So, some of it is going to be small-scale molecule expansion, which we know we will need, because a lot of the thrust in early development is in small-scale molecules. So, again, going by past performance, some of these molecules will start moving towards commercialization, and we will need extra capacity. So, that is going to happen. Then we are going to be expanding more in peptides. We need, we believe, not we believe, we need to add more fermentation because, large scale fermentation because there is projects that are being discussed with us on that, then oligos. So these are some of the novel, you know, and if some of the peptide projects start looking rosier, then we will add more oncology, that is, high potential capacities as well.

So, the last question I have is on the fermentation side. We have a good experience of working on the fermentation-related technology, but so far we have been limited to only pharma. Is there any thought process of going into non-pharma fermentation opportunities? Because some of our peers are also thinking on that. Thank you.

If there is opportunity to do something which is non-Pharma and it will, you know, give us the... The right IP protection for our clients and the right kind of product? Yes, for sure. And we are having some of those discussions. It is, in some way, it's not new to us. We do nutrition-based products anyway, which are fermentation-based, and they are non-pharma. But we might even look at something industrial, if it is the right product mix, and it has a great future. And we have some discussions with respect to that as well. So, yes.

Sure. And last question I have on the speciality ingredients, what is the growth

driver for speciality ingredients for next two to three years?

One is the DLP, one. Apart from this, what are things that would drive the growth in speciality ingredients?

Thank you, and I will join Dr. Q. So, on specialty ingredients, there are three growth drivers. One, obviously, you've talked about on GLP-1. The second one is we're investing significantly on permutation. The intent over there is a lot of probiotic work, what we do for our clients. Some significant amount of probiotic strains get imported from outside of India, and hence we have tied up with a fairly large Indian customer where we are looking at from an import substitution, We will be supplying that probiotics to them going forward. With respect to this customer, for India market, for other markets, and for other customers, the probiotics will be a significant growth through beyond the speciality ingredient side. The third growth factor for speciality ingredients is the biosimilar product. We are working on the development of a biosimilar product for a particular US customer, which is an approved biosimilar drug. They manufacture it outside of India and we've been working with them on the development of this biosimilar so that the manufacturing could ship to India and we can supply to them from India. So, major growth drivers are these three. Existing products will still continue to grow. We have a couple of products on vitamin K27, Sirashio 50 days. These are our flagship fermentation-based products. We will continue to grow in those products. Probiotic strains, enzymes, these are all organic growth. These are the new areas where probiotics is not a new area specifically, but it's a focused area for us, and the new areas are the GLP-1 and the biosimilars for us for speciality ingredients too.

Thank you so much.

Thank you. Our next question comes from the line of Neha Manpulia from Bank of America. Please do it.

Thanks for taking my question. As we're starting work or doing work on Unit 4, you mentioned that, you know, obviously there's a fair bit of order that you're sort of building up, but how should we think about creating capacity versus, you know, getting into new business? Particularly if I look at, you know, Capex across the earth, both in India, China, and Europe on the CDMO side. Is that capacity investment essential for our, you know, to get new business? That's my first question. And second, on peptides, while you did mention that, you know, you want to get more on peptides, what do you think differentiates Anthem on its ability to get more business on peptides? How should we get more confidence around that? Thank you.

Thank you, Neha. The first question is a very important and also a little bit of a philosophical question. How do we decide what capacity to put? Listen, again, for everybody who's on this call, in our business, first we have to build it and then they will come. Our customers want to see that we have the capability as well as the capacity. To handle the project, then only they are interested in giving us the project. See, we all admire China's scale, but they build capacities, and then they were able to fill it up with the business from the world. So, some of that, without being, sometimes I think, you know, we have to do it carefully, and so far we've done this, we've managed our, you know, our capex versus our business fairly well, and that's reflected in our return on our rotis, which are very strong. So, we have to build new capacities, then only we can attract more customers. So, when do we start building these new capacities? To start building them in advance of when you see that some of these projects that you are looking at, which are in phase two now, may advance to phase three, and phase three to commercial. So, at that point, you have to plan your capacities, and that's why we are so bullish about it. Second of course is... You know, our projects tend to be a green field. It's very hard for us to, you know, we have looked around for acquiring a good asset, but it's very hard to find really good assets. So we build green field a lot and to a standard that will pass muster with regulators as well as our own internal standards as well as our customer standards. And I think we are second to none when it comes to that. And that's another reason why we have to start building in advance. The question that you asked on peptides, well, you know, we are... Without taking any names, we are already taking a few peptides commercially. All of them are in the generic space, and we supply to customers in India, and also in talks with customers overseas now, and with GLP-1, which our partners all recognize that they have the ability to do it, And that is the reason why innovative companies are looking at Anthem to partner with us to develop new peptides. If they didn't have confidence in our ability, they will not come to us. So, peptide is something we have, I would say, reached a fair degree of proficiency in making and developing, and so we are in a good place there. No, I don't have any names to give you, but trust me and believe me that they are among the pointers with peptide development in the country now.

I'd like to add something, Nehra, on this. Peptides, we started work around 2012-2014, around that time, when we were doing last-hit work for most of our customers. We currently work with Innovator Peptides, close to about 8-9 programs are there on Innovator Peptides, which are under development. From LabScale, now we have expanded into a full-blown, 16KL commercial scale manufacturing facility at NeoAntham. It's a fantastic facility. You should come visit and see us on the peptide facility. So, as a competitiveness to or differentiator to customers, we have ability of doing discovery development and commercial manufacturing on websites and commercial and manufacturing at scale with the facility which has just come up. So that gives a unique, that gives a good proposition for customers to give the product more development or in a late scale project also to come to us because you won't then need to venture out somewhere else looking out for capacity to tech transfer the project. So, that's a differentiator for us. On the generic peptide, GLP-1, they did talk about, they are completely backward integrated over there. We manufacture the fermentation segment as well as the synthesis, and only companies in India to be completely backward integrated and hence be competitive from a cost point of view to play, to compete against the Chinese on some other type. So that's the uniqueness or the competitiveness when we target our Indian customers who are looking at tapping the ROW market in the GLP-1 stage, the generic semaglutide stage, right?

That's very helpful, sir. Just a follow-up on the first question. So, Unit 3, as we see, you know, it's ramping up probably in 27, more so in fiscal 28. Would it be fair to assume that we get to that 1.4, 1.5 asset turn probably in three years' time? Would that be a fair assumption?

I would say that's a good assumption. Definitely, we have to do it.

All right. Thank you so much.

Thank you so much. Our next question comes from the line of Jais Kamdi from Dalal and Buraja. Please go ahead.

Yes, sir. Thank you for the opportunity. I just wanted to confirm on the four new molecules that have been approved in the past quarter. Have they started contributing to our revenues? And, I mean, when can we see a full ramp-up of these molecules?

Yes, they have contributed revenues for this nine months because customers have taken smaller batches because they are just looking at launching this product in the market. But I think there are major impact we will get to see only towards the end of this calendar year when we get to know more orders from them. This is still at an early stage of commercial launch, so the product will, if I have to see a full-blown impact, maybe it might take a couple of years for these four commercial molecules to show good results as what our existing molecules have shown.

I was just going to add that the products which are with small biotechs, they don't really take off right away because more often than not, these companies are already are apparently negotiating to sell themselves to Big Pharma. So there is always a little lull now that they have an approved product. And they are taking quantities to go for a launch, but at the same time, they're also working on mergers and acquisitions. As a result of which, we very often find that only after big pharma steps in, there is a possibility of a quick ramp up. But, you know, this is not something, again, an event that we know fully of, and we can't control it also. But this is another reason why sometimes there is a lag between the product being commercially approved and giving you the full benefit of full-blown commercial success. So that's time we have to wait.

And sir, is the end market potential for these products lucrative enough for large farmers? Any indication? I mean, what size could there be anything you can, are they expected to be work versus?

Yeah, some of them are. And remember, very often the indication in which they get their first approval is usually a small or an orphan indication. That is just to get the product approved. Apparently, people start working immediately on other indications, and that's what's happening with these molecules, and that's the reason why they've taken more material for more clinical trials as well. So, very often, a small molecule indication is an entry point, and after that is when the expansion takes place. So, many of these, some of these products are in that mode as well. You know, one of our biggest products got one approval. Today, it has six or seven indications which are approved, and that's what makes it a blockbuster. So, this is happening parallelly.

Just to add, I think in the last call, I would have given some estimates of the peak market sales for these four products. Roughly peak market sales, roughly about $10 billion. I haven't checked any changes on the analyst estimates for these four end molecules in this course of the last two, three months, unless numbers would have changed significantly, but my sense is it's a $10 billion estimate across the four molecules. which are there, which got commercial for us.

Okay. Perfect. Thank you so much.

Thank you. Our next question comes from the line of Karthik Bane from Bajaj Life Insurance. Please go ahead.

Thank you very much for the opportunity. I just wanted to understand if 1,000 crore capex for the unit 4 that we have planned in terms of 2 years, so where exactly are we, what would be the execution milestones and bottlenecks to watch out for?

So, Karthik, currently, the civil work is going on. We are, so what we are doing is, it's a 30-acre land parcel, so we are looking at phase one and phase two, so we are looking at only half of the land parcel right now to construct, and the civil work is ongoing right now. So, significant... Capacity, sorry, expense haven't happened because construction takes time. I think towards in March 27 financial year, we'll have major portion of CAPEX going out for this talk and for phase one expansion that we're doing. It's still in an early stage civil work mode right now on unit four.

Okay. And secondly, on the KBITTA margin outlook or the growth that we have got, how much is contributed by the constant currency as most of our projects are also outside India?

So, see, if you look at it, what we have given out in the financial is, so, speciality ingredients is pure clave India income because 90% of the business is India and speciality ingredients. CDMO is where it's completely export-oriented and dollar-denominated. Whatever increment, we as a policy don't hedge, and hence whatever appreciation from a currency, what we have seen is what we recognize as an FX income, which we have articulated as other operating income in the opening statement that Ajay had mentioned. The other operating income which is not factored in the revenue line item, in the revenue from operations line item is about 41 crores for 9 months and for this quarter it is about 6.4 crores.

And lastly, of the molecules in the early stages, do we have any ADCs there? Like, out of these 130, 140, how many would be ADCs?

There's one molecule. So, in late stage, there is one molecule which is, in phase 3, there is one molecule which is ADC. On the early stage, I would say, we'll have about 6 to 7 programs which are ongoing. Okay, thank you very much.

Thank you, Karthik.

Thank you. The next question comes from the line of Sanjay Kumar from iPods PMS. Please go ahead.

Hi, so thanks for the opportunity. First is just a follow-up on Sumo Glutine. Are we focusing on the oral trauma or the injectable version of Sumo Glutine? And last quarter, I think we said that process validation is underway. So any timelines for signing DMF and have you signed any customers in India?

See, we are not in the fill-finish thing, so we don't, we focus on semagricide as the active. Not the oral or injectable. And yes, we have signed up with a bunch of customers in India. Are we filing a DMF in the US? Yes, no. But that is something which will be subsequent. Because at the moment, most of our customers are focused on launching it in ROW. And that is something which we are very, very well geared up for. And yes, we've done validation batches and all the rest of it. So, we haven't filed the DNL, though we are in a position to do it.

Michel, have you ever called? May they call exit?

Hello? Any call? Please continue. Okay. So, as I said, though we haven't filed the DML, though all the documentation and PMC document needed for that is ready, but we are working with our customers to do that. Yes, we are working with major Indian companies in this space.

No, I understand it's the API, but the customers who find it is, will they be using it for oral or injectable machine? Do they have any disability on that or do you know?

Many of them are trying to develop oral. Oral is a little hard, but everybody will do this for injectable right away. But oral also has patterns which go a little further. But yeah, I know that there are a few people who are working on oral as well. So oral will definitely be in the mix.

Okay, okay. And second, a couple of questions on biosimilar. What is the reactive scale or the capacity from this plant? And the product that we have signed, is it a mag or a fusion protein?

Oh, it's a microbial biosimilar, and it is, our capacity is, we have two trays, one is each of 200 weeks of fermentation, and that can produce a lot of products, because microbial fermentations are usually one or two days only, as opposed to CHO, CHO fermentation, which can be weeks. So, yeah, it is a large molecule based on microbial, microbial. Microbial bug. It's a micro.

Got it. Got it. And what is the current global market price for these biosimilars and what revenue can we expect in, say, 2028 for this product?

Oh, this product is massive. It's gone biosimilar a long time ago, and, you know, there's no... There are other players in it, but the company that we are working with have a decent market share in the US. So they already have got this product in the market, which they currently make in the US. The idea for them is to stop that production and shift that production to us so that they can get all the advantages of Anthem's technology as well as the low-cost input that we provide. And they have a fairly decent business already. Remember, this particular area, it's been generic for a long time. There has been no replacement for it. There are other players who make this, but in this space, though this is a very old molecule, it's the only one that is approved for this indication, and no new replacements have come. So it has stood the test of time.

Okay, okay, and can you comment on the future pipeline for biofilm? You said this is a microbial, but can you also do a CHO-based nanonium biofilm? Where are we on the other biofilm?

Yeah, Sanjay, we are working on a bunch of projects there, and those are also biosimilars. Again, we have chosen some products where there are no biosimilars available, even though the product has gone off pattern, and we are working with, one of them is fairly advanced, and we expect that that should go in the market in the next two years.

Oh, then is this 200 liters capacity

enough for us? We'll have to build new capacity for that. That's something which is going to be a separate facility. Unit 3 has, you know, we've created, as we said, the infrastructure already, what we are putting in place, and that's already past the design stage. We are now negotiating with vendors to supply, you know, partly single-use and partly fixed fermentation for chosen.

Okay, final question in a second. What would be the CAPEX that we needed to set up a 16-talion pet-paid facility? Just trying to understand the replacement cost.

See, if you look at proportionate capex, including, you know, the other utilities which is set up as part of the facilities, then it will be about 200 odd floors.

Okay, okay, got it. And from this moment.

Because that will be, you know, you set up other utilities like EDP and ancillary blocks, et cetera, which is common to the facility, common to the place.

Right, right, right.

Other blocks are there, so you have to proportion that as well. So from that point of view, it will be roughly about 200 floors which will be there.

Okay, and let us say we make 200 kg output of peptides, what kind of EBITDA margin can we make in peptides the DLP1 or other generic peptides?

We are very confident that we will be able to do the numbers. We have done the numbers. I don't have them in front of me, but it is eminently doable. We, so far, have been laser-focused, I would say paranoid about margins, and I don't see that going away. Trust me, we are in a very good place as far as, see the peptide, for instance, you just take GLP-1. Making the peptide is only half the story. There is a fermentation element. So you have to be able to do fermentation effectively and at a price, at a cost. All of you know P29. P29 from China is very, very competitive and cheap. We find that still a very attractive proposition. We don't see anybody there. So, we are, we will take the whole manufacture of GLT, one right away, right from fermentation to the finished product, we will be able to get the abittas that we have historically been used to.

Okay, so even if let's say some API prices crash to say $100 per grand, we could still make 35% kind of EBITDA margin in peptides.

Oh, absolutely. $100 would be a nice price. It's a dream.

Wow. Okay. So that's good to know.

I believe it will go lower than that, but yeah, $100 would be very nice.

Okay. Okay. Got it. I think that's it from my side. All the best and thank you.

Thanks. Thanks, Anjay.

Thank you. Next question comes from the line of Vivek Gautam from GS Investment. Please go ahead.

Yes, sir. Sir, I just wanted to know about any of these stockings we are facing in any molecule, and so that is leading to some sort of stocked performance over the last few quarters, and the situation might improve in the coming quarters. And second question was about what portion of our portfolio will comprise of GLP-1 drafts in FY28. Thank you.

Yeah, you're right about talking. Hello?

Oh, yeah. Yes, sir.

Some problem with the line. See, there has been some, definitely because of the general geopolitical tension that we have seen in the last one year, where, you know, we have been in loggerheads with a major trading partner in the United States. It has put a lot of anxiety in the mind of Big Pharma, and as well as small biotechs, so people have been very wary about building up too much stock and carrying too much inventory, so they have been a little bit mindful of reducing the number of days of safety stock, so that has affected us, otherwise we would have had been a bumper growth this quarter also, but Again. We are seeing signs of recovery that all the de-stocking that had to happen has happened, and the results that we are reporting is subsequent to that. So we feel that going forward, this will be a, we will be in a very good position as far as filling up the new requirement, which will be for de-stocking. So that is one. On the GLP, we are, again, what person is our revenue? I don't know, hard to say, but will it be a significant part of our turnover? I would say yes. Will it be 20-30%? I don't think so, but it still will be a major contributor to our top line as well as our bottom line.

And, sir, this recent budget announcement of India, was there some incentive for the biopharma company, and trade deals have been signed in US, EU, UK, and other countries also. How does that place us, sir? Thank you.

Now, the details of that, Vivek, are yet unknown, so I don't really know how this will play out with the U.S. and all that. But, yeah, the government is encouraging, which is a good thing. The government sees biotech as a strategic sector of economy. You know, it should have been recognized long ago, but it's been a better late than never, and I think that this will definitely have a very positive impact on, but, you know, they are offering incentives and CLI-based things. I don't know. I don't know. The details will still come out. But, you know, Anthem is already, regardless of what the government policy is, we are going to be, we are firmly entrenched in this. We have been doing this for two decades. And before that, you know, I've been involved for four decades in this now. So, biotech is very close to us. And we will continue to. So, if the winds become favorable from the side of the government, then it's even more, it gives us more tailwinds. So, I'm just very bullish about this. I'm super confident that biotech, which we've talked about for such a long time, as a sector, its time has come.

Thank you, sir.

Thank you. Thank you, Vivek.

Thank you. Ladies and gentlemen, due to the time constant, that was the last question for today. I would like to hand the concerns over to the management for the closing comments. Thank you, and over to you, team.

Um... So, thank you very much to JM and to all the people who are on the line. Unfortunately, only so much time and, you know, only that many questions. As we said, we would communicate to us, we have tried to be as transparent and as open about how we see the prospect of Anthem and where Anthem is headed. And we really appreciate the support that we've got from the investor and the investment community. And you will see that regardless of what happens in the, you know, going forward in the geopolitical situation, Anthem will continue to invest, continue to invest in technology, and our edge, which is something that we are laser focused on, is doing the same things Thank you very much for being on this call, and I look forward to talking to you again at the end of the year.

Thank you, everyone.

Thank you so much. Ladies and gentlemen, on behalf of GM Financial Institution and Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Bye-bye.