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Weak Q1; FY27 growth outlook remains unchanged

ANTHEM's Q1FY27 performance was impacted by timing-related shipment deferments to key customers, with underlying demand and order inflow remaining strong. The management expects deferred deliveries to be recovered over Q2–Q4. We believe growth visibility remains robust, driven by a deep CRDMO pipeline, ramp-up of recently commercialized molecules, and potential commercialization of late-stage assets over the next 18–24 months. Further, the Specialty Ingredients business is expected to benefit from semaglutide API commercialization once CDSCO approval comes through. With planned capex of INR10–12bnover FY-28E, largely funded through internal accruals, the company continues to expand capacities to support long-term growth. We estimate Revenue/EBITDA/PAT CAGR of ~21%/22%/19% over FY26–28E driven by ~23% growth in CDMO services, ~11% in CRO and ~14% in Specialty Ingredients. At CMP, the stock trades at ~35x EV/EBITDA and ~50x P/E on FY28E. We maintain ‘BUY’ with TP of INR850/share, valuing the company at 55x FY28E P/E.

Revenue impacted by shipment deferments:

ANTHEM reported revenue of INR4.2bn in Q1, down 23% YoY, in line with our estimates. This was largely on account of deferred shipments with recovery expected in the coming quarters. On segmental front, CRDMO revenue declined by 25% YoY to INR3.4bn, whereas Specialty Ingredients reported INR774mn in revenue, down 12% YoY.

Healthy GM; in-line EBITDA:

EBITDA came in at INR1.5bn (down 21% YoY), broadly in line with our estimates. OPM at 36% was down 774bps QoQ and up 55bps YoY. Overall GM stood at 65%, up 778bps YoY (flat QoQ). GM improved due to backward integration of an intermediate, which ANTHEM earlier outsourced. Resultant PAT came in at INR1.2bn (down 12% YoY); we est INR1.02bn. EPS of INR2.1/share for Q1FY27.

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