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    Himadri Speciality Chemical Limited

    HSCLStrong
    Chemicals·21 Jan 2026
    Management Summary

    Himadri Speciality Chemical delivered a strong Q3 FY26 performance, characterized by significant margin expansion and the commencement of key expansion projects. The company is successfully pivoting toward high-value battery materials while maintaining leadership in its core carbon chemistry business. Management's focus on internal accruals for growth and a strict 30% ROCE threshold for new projects underscores a disciplined capital allocation strategy.

    Highlights

    7

    • Consolidated Revenue for Q3 FY26 stood at ₹1,184 crores, with EBITDA at ~₹253 crores (up 12% YoY).

    • Consolidated PAT for Q3 FY26 reached ₹192 crores, representing a robust 36% YoY growth.

    • 9M FY26 Standalone PAT of ₹564 crores has already surpassed the full-year FY25 PAT.

    • EBITDA per metric ton improved by 15% YoY to ₹16,934 in 9M FY26, driven by a superior product mix.

    • Trial production commenced for the speciality carbon black expansion, creating the world's largest single-site plant at 130,000 MTPA.

    • Management reaffirmed guidance to double FY25 PAT (~₹558 crores) by FY28, implying a target of ₹1,100+ crores.

    • Phase 1 of LFP Cathode Active Material (40,000 MTPA) is on track for Q3 FY27 with a capex of ₹1,125 crores.

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹1,184 Cr
    2. 02EBITDA₹253 Cr+12%YoY
    3. 03PAT₹192 Cr+36%YoY
    4. 04EBITDA per metric ton₹16,934+15%YoY
    5. 05Sales Volume4,28,572 metric tons+3%YoY

    Segment breakdown

    Birla Tyres
    ₹60 Cr Revenue
    Speciality Carbon Black
    1,30,000 MTPA Total Capacity
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Profitability
    PAT Doubling
    ₹1,100+ crores
    		High
    Capacity
    LFP Cathode Active Material Phase 1
    40,000 MTPA
    		High
    Capex
    Cathode Phase 1 Capex
    ₹1,125 crores
    		High
    Margin
    Return on Capital Employed (ROCE)
    30%
    		High
    Volume
    Speciality Carbon Capacity Utilization
    85%
    		Medium

    Risks & concerns

    6
    RiskSeverity

    Lithium Price Volatility

    Management stated that lithium price fluctuations will be a full pass-through to customers, similar to their existing carbon business model. — Analyst acknowledged

    medium

    Execution Risk in Battery Materials

    The long qualification process for cathode materials means significant ramp-up is not expected until FY29. — Management acknowledged

    medium

    Raw Material Availability for Anodes

    Management identified raw material as the single critical factor for the industry but claims a clear advantage due to their backward integration. — Management acknowledged

    low

    Areas of Evasion(3)

    • Specific names of global customers due to NDAs
    • Capex and capacity numbers for the anode project (still in finalization)
    • Specific EBITDA margins for the Birla Tyres segment

    Q&A highlights

    3

    “When we articulated that PAT will double in 3 years, same thing we are saying again now 1 year fast forward, the PAT will double again in 3 years from FY '25 to FY '28.”

    Clarifies the growth trajectory and management's confidence in repeating their previous success of doubling profits ahead of schedule.

    asked by Divyansh Thakur

    2 min read5 chapters

    Detailed Narrative

    01

    Speciality Carbon Black Expansion Reaches Milestone

    Himadri has commenced trial production for its speciality carbon black expansion, bringing total capacity to 130,000 metric tons per annum. This facility is now the world's largest single-site speciality carbon black plant. Management expects to reach 85% capacity utilization in the next financial year, with full results expected to manifest in FY27. This expansion is critical for serving high-value applications in plastics, inks, and EV tyres.

    02

    Strategic Roadmap for Battery Materials

    The company's entry into battery materials is progressing with the first commercial phase of 40,000 MTPA LFP Cathode Active Material on track for Q3 FY27. The project involves a capex of ₹1,125 crores and is expected to achieve an asset turn of over 2x at full capacity. While a demo plant will start sampling in Q4 FY26, management anticipates full capacity utilization for the commercial plant only by FY29, reflecting the long qualification cycles in the EV supply chain.

    03

    Financial Discipline and Profitability Guidance

    Management has set a bold target to double its FY25 PAT by FY28, supported by new capacities and a shift toward high-margin speciality products. The company maintains a strict capital allocation policy, requiring a minimum 30% ROCE for all new investments. Notably, the entire growth plan for the next 3-4 years is expected to be funded through internal accruals, with management aiming to remain debt-free while avoiding equity dilution.

    04

    Birla Tyres Modernization and Market Entry

    Birla Tyres achieved over ₹60 crores in revenue during Q3 FY26. The company is currently revamping and modernizing its OTR (Off-the-Road) and OHT (Off-Highway Tyre) segments. While currently operating through a partnership model with Dalmia Refractory, Himadri plans to launch passenger car tyres focused on the SUV and EV segments in the future. Capacity ramp-up is expected to accelerate from the next financial year.

    05

    Global Logistics and Export Strategy

    The commissioning of the Mangalore port terminal marks a significant milestone in Himadri's export strategy, enabling the delivery of liquid coal tar pitch to the Middle East. This second export corridor, alongside Haldia, enhances logistics flexibility and opens access to the world's largest aluminum manufacturing bases outside China. The company aims to leverage this infrastructure to cater to rising international demand with best-in-class quality and competitive pricing.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.