Himadri Special

Himadri reported a 77% YoY increase in Net Income to ₹452 Crores and a 330% surge in PAT to ₹50 Crores. This was supported by a 25% volume growth and a 42% increase in average realization to ₹47,729 per MT. Crucially, the company reduced long-term debt by ₹104 Crores to ₹310 Crores, though working capital loans rose by ₹155 Crores to support higher volumes and realizations.

The company is aggressively moving into Specialty Carbon Black, which serves niche non-tyre segments like plastics, inks, and coatings. Management noted that the margin difference between normal and specialty grades starts at 250-300% and can exceed 2000%. This shift is a primary driver of the ₹3,000 per tonne absolute improvement in EBITDA seen this quarter.

Himadri is the only Indian producer of advanced carbon material for Li-ion batteries. They are scaling capacity from 5 MT to 50 MT per month by September 2017. With realizations for the final product ranging between ₹6-7 Lakhs per MT, management expects this segment to become a 'big game changer' and a core business pillar as global demand for electric vehicles and energy storage scales.

As the largest producer in India with a 70% market share, Himadri is debottlenecking its CTP capacity from 400,000 to 500,000 MTPA. This ₹20 Crore investment is timed to meet the expected rise in domestic aluminum capacity from 2.75 million to 4 million MTPA by FY19. CTP constitutes roughly 10% of aluminum production volume, ensuring a steady demand outlook.

EBITDA margins were bolstered by a 30% contribution from productivity improvements and operational efficiencies. The transition to GST resulted in a reversal of ₹18.27 Crores in excise duty provisions, which had a neutral effect on profitability as it was offset by higher reported costs of materials consumed, ensuring a clean comparison of underlying performance.