Detailed Narrative
Record Profitability Despite Revenue Headwinds
Himadri reported its highest-ever quarterly EBITDA of ₹243 crores and PAT of ₹187 crores in Q2 FY26. While standalone revenue declined 5.7% YoY to ₹1,070 crores, this was primarily due to a 13-15% correction in raw material prices which are passed through to customers. The profit growth was driven by a shift toward high-value speciality products and significant operational efficiencies, including improved yields and waste heat recovery.
Strategic Pivot to Lithium-ion Battery Materials
The company is making significant strides in the EV ecosystem, aiming to be the first commercial-scale LFP cathode active material manufacturer outside China. The initial 40,000 MTPA plant is on track for Q3 FY27, with a long-term phase capacity target of 200,000 MTPA. Management expects this segment to contribute ₹2,500-2,700 crores in revenue by FY28 at full utilization, supported by positive feedback from demo-scale plant samples.
Expansion in Speciality Carbon Black
Himadri is set to more than double its speciality carbon black capacity to 130,000 MTPA by the end of Q3 FY26. This expansion will bring total carbon black capacity to 250,000 MTPA, positioning the company as the world's largest single-site producer in this segment. The company has already launched over 60 new grades to strengthen its leadership in niche applications.
Birla Tyres Revival and Forward Integration
The revival of Birla Tyres is progressing with a focus on off-highway (OHT) and off-the-road (OTR) segments, alongside EV-designed radial units. Revenue grew five-fold QoQ to ₹26 crores, though the unit is currently operating at only 10% utilization. Installation of machinery for the passenger car radial (PCR) unit is expected to commence within the next 12 months, targeting higher-margin retail and OEM markets.
Financial Discipline and De-leveraging Roadmap
Despite ongoing heavy capex, Himadri maintains a healthy balance sheet with a net debt of only ₹113 crores. Management clarified that the increase in gross borrowings to ₹800 crores was due to the issuance of commercial papers backed by bank deposits. The company expects to be net debt positive by March 2026, funding all future expansions through internal accruals.