Himadri Speciality Chemical Limited — Q1 FY26 earnings call

Call held 18 Jul 2025

Management summary

Himadri Speciality Chemical delivered a strong start to FY26 with record profitability despite a marginal dip in revenue caused by raw material price deflation. The company is aggressively pivoting towards new energy materials, specifically LFP cathode and anode materials, while successfully integrating the Birla Tyres acquisition. Management remains focused on high-value-added products and operational efficiencies to drive sustainable margin expansion.

Highlights

  • Highest-ever quarterly EBITDA of ₹235 crores, up 25% YoY

  • Consolidated PAT reached ₹179 crores, representing 46% YoY growth

  • Consolidated Revenue stood at ₹1,118 crores, down 6.8% YoY due to raw material price corrections

  • Sales volume increased slightly to 1,40,090 metric tonnes from 1,39,175 metric tonnes YoY

  • EBITDA per metric tonne margin reported at approximately ₹16,500

  • Export revenue contribution remained strong at 34% of total revenue

  • Net debt significantly reduced to ₹107 crores with a healthy ROCE of 32%

  • Birla Tyres operations commenced, contributing ₹5 crores in revenue for the partial quarter

Concerns

  • Execution Risk in New Energy Materials

Key financials

  1. Revenue ₹1,118 Cr -6.8%YoY
  2. EBITDA ₹235 Cr +25%YoY
  3. PAT ₹179 Cr +46%YoY
  4. Sales Volume 1,40,090 metric tonnes +0.66%YoY
  5. ROCE 32%
  6. Net Debt ₹107 Cr

What they filed

Q1 FY27: revenue up 15.8%, net profit up 21.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,135 1,132 1,129 1,100 1,070 −6%1,133 +0%1,101 −2%1,274 +16%
EBITDA206 218 234 244 238 +16%239 +10%214 −9%276 +13%
Net profit134 142 158 183 187 +40%195 +37%186 +18%223 +22%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹8 Cr Total
  • Tyre Business (Birla Tyres) ₹5 Cr 62.5%
  • Invati (Nanotechnology) ₹3 Cr 37.5%

Guidance & targets

Profitability

  • Net Profit Profitability · FY27 · High confidence Double
    we expect our net profit to double from FY ‘24 to FY ‘27.

    — Anurag Choudhary, CMD & CEO

Revenue

  • LFP Phase 1 Revenue Potential Revenue · FY28 · Medium confidence ₹2,500-2,700 crores
    Between Rs. 2,500 crores to Rs. 2,700 crores.

    — Anurag Choudhary, CMD & CEO

Capacity

  • Speciality Carbon Black Capacity Capacity · Q3 FY26 · High confidence 1,30,000 metric tonnes
    With this, our speciality carbon black capacity will more than double to 1,30,000 metric tonnes... on track to be commissioned by Q3 FY ‘26.

    — Anurag Choudhary, CMD & CEO

  • Coal Tar Pitch Capacity Capacity · Q3 FY26 · High confidence 6,00,000 metric tonnes
    So from 5,00,000 we will go to 6,00,000 metric tonnes... By Q3.

    — Anurag Choudhary, CMD & CEO

Capex

  • Birla Tyres Additional Capex Capex · FY26 · Medium confidence ₹250-300 crores
    ballpark figure as of now during the current year will be around Rs. , 250 crores to Rs. 300 crores additional CAPEX

    — Anurag Choudhary, CMD & CEO

Other

  • LFP Product Pricing Other · FY27 · Medium confidence ₹6-7 lakh per tonne
    But on a ballpark figure, it will be between Rs. 6 lakh to Rs. 7 lakh per tonne as of what it looks today.

    — Anurag Choudhary, CMD & CEO

Risks & concerns

  • Execution Risk in New Energy Materials

    high

    The company is entering a massive CAPEX cycle for LFP and Anode materials, which are technologically complex and outside their traditional core.

    Both acknowledged

  • Raw Material Price Volatility

    medium

    Revenue was marginally impacted by a correction in raw material prices which led to lower finished goods pricing.

    Management acknowledged

  • Competitive Intensity in Tyre Industry

    medium

    Analysts questioned pricing power in a competitive industry; management relies on brand recall and niche segments (OHT/OTR).

    Analyst acknowledged

Areas of evasion (2)

  • Specific product-wise revenue/cost contribution for naphthalene
  • Exact timelines for Anode CAPEX announcement

Q&A highlights

3 direct
US Duties on Chinese Graphite Opportunity Direct
So, the effective duty will be 165%. Already there is a duty on Chinese anode with this additional duty coming in. This is a great opportunity for us to supply material to US.

Highlights a significant geopolitical tailwind for Himadri's upcoming anode material business in the US market.

Asked by Sanjesh Jain, ICICI Securities

Birla Tyres Acquisition Strategy and Distraction Risk Direct
Today, with Birla Tyres brand with you, the B2C business looks like a cakewalk... our investment has been only Rs. 300 crores for an asset worth Rs. 3,400 crores.

Management justifies the B2C entry by emphasizing the massive asset-to-investment value gap and the 40-year brand legacy.

Asked by Bharat Shah, ASK Investments

Depreciation Levels on Gross Block Direct
This is directly correlated with the life of the plant. So, depending on what is the lifespan of the plant, the depreciation rate item wise has been calculated.

Addresses analyst concerns regarding the relatively low depreciation rate (₹57 cr on ₹2,500 cr block) by citing long asset life and SLM accounting.

Asked by Jaiprakash Kumar, Korman Capital

2 min read 5 chapters

Detailed narrative

Record Profitability Amidst Revenue Headwinds

Himadri achieved its highest-ever EBITDA of ₹235 crores and PAT of ₹179 crores in Q1 FY26. While consolidated revenue dipped 6.8% YoY to ₹1,118 crores due to raw material price corrections, the profitability trajectory remained firm. This was driven by a shift toward high-value-added products like refined naphthalene and speciality carbon black, alongside improved operational efficiencies and yield.

Strategic Pivot to New Energy Materials

The company is making significant strides in its clean tech vertical, aiming to power 100 gigawatts of Li-ion battery capacity. Phase 1 involves a 40,000 MTPA LFP cathode plant, the first of its kind outside China, expected to be operational by Q3 FY27 with a revenue potential of ₹2,500-2,700 crores. Additionally, Himadri is developing hybrid anode materials (natural, synthetic, and silicon carbon) and has invested in International Battery Company (IBC) to secure a global customer base.

Birla Tyres Integration and B2C Foray

The acquisition of Birla Tyres marks Himadri's entry into the B2C segment. Management emphasized the strategic value of the 40-year-old brand, noting they acquired assets worth ₹3,400 crores for an investment of only ₹300 crores. Operations have commenced with ₹5 crores in sales in the first partial month, and the company plans an additional ₹250-300 crores CAPEX this year to modernize the plant for OHT, OTR, and PCR segments.

Capacity Expansion and Debottlenecking

Core business expansion is on track with a brownfield speciality carbon black project of 70,000 MTPA set for Q3 FY26 commissioning, which will double total capacity to 1,30,000 MTPA. Simultaneously, coal tar pitch capacity is being debottlenecked from 5,00,000 to 6,00,000 MTPA by Q3 FY26. These expansions are expected to drive significant volume growth from Q4 FY26 onwards.

Global Positioning and Export Strategy

Exports now contribute 34% of total revenue, with a strong presence in Europe and the US. Management sees a major opportunity in the US market following proposed 165% effective duties on Chinese graphite. Himadri's backward integration and low-sulfur (0.002%) raw material supply for speciality carbon black provide a distinct competitive edge over global peers.

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