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Himadri Speciality Chemical Ltd

| Q4 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤2nd May 26

Summary : Himadri Speciality Chemical delivered record FY26 financials, commissioned its first anode material plant, and is aggressively expanding into lithium-ion battery materials and specialty chemicals, projecting strong future growth.

Management Perspective positive : "I sincerely appreciate your continued trust and engagement, and it is a pleasure to connect with you once again.""It is this long-standing R&D capability built patiently... that has culminated into the most defining milestone for Himadri this year.""I'm pleased to report that FY26 has been a year of strong execution and delivery.""We are confident of achieving this on a sustainable basis. And we are looking forward also, you'll see growth in the numbers.""We firmly believe the best chapters of Himadri's story are still ahead of us."

Concall Report Analysis & Insights

Business Overview

  1. Himadri Speciality Chemical Ltd focuses on high-value specialty chemicals and advanced materials.
  2. The company has strong in-house R&D capabilities with 180+ scientists, including 28 PhDs.
  3. It commissioned its first anode material manufacturing facility (200 MTPA) in West Bengal.
  4. The entire anode technology platform was developed in-house, utilizing proprietary coal tar pitch.
  5. Himadri achieved record EBITDA and PAT in Q4 and full FY26, demonstrating robust financial health.

Future Growth Prospects

  1. LFP cathode active material project Phase 1 is on track, targeting 2,000 MT by Q3 FY27 and 40,000 MT by FY29.
  2. Long-term goal is 200,000 MT LFP cathode active material capacity for 100 GWh battery capacity.
  3. Collaboration with Sicona Battery Technologies for silicon-carbon anode technology (SiCx®) for global markets.
  4. Strategic investment in International Battery Company (IBC) for battery material validation and commercial deployment.
  5. Revival of Birla Tyres aims for INR 3,000 crores top line in 4 years, focusing on product strength.

Management Insights

  1. R&D is foundational to Himadri's strategy, driving growth in high-value specialty chemicals.
  2. The commissioning of the anode material facility marks a pivotal step into lithium-ion battery materials.
  3. FY26 saw strong financial performance with record EBITDA and PAT, reflecting operational discipline.
  4. Management committed to doubling PAT from INR 555 crores (FY25) to INR 1,100+ crores by FY28.
  5. Confident in achieving sustainable gross profit margins and future top-line and bottom-line growth.

Signs of Skepticism

  1. Management did not provide specific growth numbers for FY27, only a general outlook.
  2. Anode business growth trajectory and investment figures are still being worked out.
  3. Details on new clients and specific geographies for expansion were not fully disclosed.
  4. Management did not disclose specific per metric ton realization for products.
  5. NDA prevents disclosure of binding LOIs/MOUs for LFP supply.

Risk Factors

  1. Geopolitical developments in the Middle East introduce volatility in energy prices and logistics.
  2. Forex volatility led to hedging losses, impacting financial performance.
  3. Competition from China in certain markets, though management claims quality advantage.
  4. Limited global availability of anode capacity material could affect supply.

Good To Know

  1. INR 120 crores was spent on research and development during the current year.
  2. Total speciality carbon black capacity increased to 130,000 MTPA, overall carbon black to 250,000 MTPA.
  3. Coal-tar pitch distillation capacity was debottlenecked to 600,000 MTPA.
  4. The company held a net positive cash balance of INR 121 crores as of March 31, 2026.
  5. Himadri was awarded the Platinum rating by EcoVadis for sustainability for the second year.

Key Drivers

  1. LFP cathode material scaling up.
  2. Silicon-carbon anode commercialization.
  3. Birla Tyres business revival.
  4. Anthraquinone project commissioning.

Key Analyst Discussions

Competitive Environment

  1. China competition is not a concern for coal tar pitch due to Himadri's superior quality and cost.
  2. Himadri's diversified raw material platform and customer relationships provide business stability.
  3. LFP is a chemistry of choice across electric mobility and energy storage systems globally.
  4. Himadri is the first company globally to establish commercial-scale LFP manufacturing outside China.

Market Trends & Consumer Behavior

  1. Customer engagements for LFP materials are intensifying with leading Indian and global cell manufacturers.
  2. Sicona's SiCx® material demonstrates superior energy density and electrochemical characteristics.
  3. IBC operates across diverse end-use applications, including B2B fleets and energy storage.
  4. Birla Tyres brand acceptance is growing due to consistent quality, reliability, and performance.

Financial Highlights

  1. Q4 FY26 consolidated revenue was INR 1,288 crores, up 14% year-on-year.
  2. Q4 FY26 consolidated EBITDA was INR 280 crores, up 21% year-on-year; PAT was INR 208 crores, up 34%.
  3. FY26 consolidated revenue reached INR 4,661 crores; EBITDA INR 1,006 crores, up 19%.
  4. FY26 consolidated PAT stood at INR 755 crores, reflecting a 36% growth year-on-year.
  5. Birla Tyres contributed INR 187 crores to the top line in FY26, with a target of INR 3,000 crores in 4 years.

Product Composition

  1. Anode and cathode together constitute 65% of lithium-ion cell cost, with a 1:2 anode to cathode ratio.
  2. Silicon-carbon anode material enhances battery capacity, density, and reduces charging time.
  3. New SKUs AgriPlus and AgriWin tractor tyre series were launched for the agriculture portfolio.
  4. The Durofresh™ consumer foray continues to gain encouraging traction.
  5. New 100,000 tons coal tar pitch capacity by FY28, with 50,000 tons targeted for export.

Strategic Considerations

  1. Anode business growth trajectory and investment details will be announced later.
  2. LFP cathode active material project Phase 1 capacity of 40,000 MT will be fully operational by FY29.
  3. Strategic investment in IBC aims for real-world validation and early commercial deployment of battery materials.
  4. A new subsidiary in China was set up for importing raw materials/equipment and local tax benefits.
  5. Company policy is to not deploy capital ahead of requirement, focusing on ROCE.