Anthem Biosciences: Stock gets 'Buy' rating with 18% upside target

Nomura India has initiated coverage on Anthem Biosciences, arguing that the company’s integrated CRDMO platform and strong execution capabilities position it well for sustained medium-term growth. The brokerage said Anthem is set to benefit from the rapid expansion of India’s contract research, development and manufacturing industry, which Frost & Sullivan expects to grow at about 13 per cent annually to reach $15.4 billion between CY24 and CY29, outpacing the global CRDMO industry’s expected 9 per cent growth.

Nomura suggested a December 2026 target price of Rs 740, based on 50 times its December 2027 estimated EPS of Rs 14.8. It sees fair value in the 40–60 times range and believes the recent correction has improved the long-term risk–reward balance.

The brokerage argued that Anthem deserves a valuation premium over domestic peers due to its high CRDMO revenue mix, strong execution, disciplined capital allocation and healthy medium-term growth outlook. The key risk, however, stems from dependence on a few products—its top two molecules are expected to contribute 36–38 per cent of revenue between FY26 and FY28, potentially creating near-term earnings volatility.

Nomura said established domestic players such as Anthem should grow even faster—at roughly 17 per cent—given their broadened capabilities and expanding customer base. Anthem operates across the drug lifecycle, from discovery to development and manufacturing, and works on both small molecules and biologics. It is also among the few Indian CRDMOs with experience in newer modalities, including ADCs, RNAi, peptides and oligonucleotides.

The brokerage highlighted Anthem’s differentiated model in research services, which contributed 11 per cent of FY25 revenue. Unlike many peers that depend heavily on full-time equivalent contracts, Anthem has built long-standing client relationships through a fee-for-service model. In its generic specialty ingredients segment (18 per cent of revenue), Anthem focuses on niche products such as enzymes, fermentation-based actives, GLP-1 peptides and biosimilars.

Founded in 2006 with a focus on emerging biotech, Anthem now serves a broader mix of large and small pharmaceutical clients. Its operations are largely concentrated in one city, supported by a stable leadership team and low employee attrition—factors Nomura said have contributed to industry-leading profitability and return ratios.