Himadri Reloaded: Charting a Course for Sustainable Growth and Record Profitability

Himadri Speciality Chemical Ltd. has delivered a stellar performance in the second quarter and first half of fiscal year 2026, showcasing robust growth and strategic execution. The company reported its highest ever quarterly EBITDA and PAT in Q2 FY26, with EBITDA reaching ₹243 crore, a 21% year-on-year increase, and PAT soaring to ₹187 crore, marking a 39% growth. For the first half of FY26, consolidated EBITDA stood at ₹473 crore and PAT at ₹355.50 crore, reflecting strong performance across all business segments. While consolidated revenue for Q2 FY26 saw a slight decline to ₹1,071 crore from ₹1,137 crore in Q2 FY25, this was primarily attributed to a correction in raw material prices and the deferment of a large export order's revenue recognition to Q3 FY26. Despite this, the strategic emphasis on high-value speciality and advanced materials, coupled with operational efficiencies, drove significant margin expansion.

Strategic Diversification and Capacity Expansion

Himadri's strategic roadmap towards 2028 is anchored in high-value growth and diversification. The company is aggressively expanding its speciality carbon black capacity, with a brownfield expansion of 70,000 MTPA expected to be operational by Q3 FY26. This expansion will increase total speciality carbon black capacity to 130,000 MTPA, positioning Himadri as the world's largest single-site producer. Furthermore, the coal tar pitch distillation capacity is being de-bottlenecked to reach 600,000 MT, with a clear visibility for incremental demand from the global market, particularly the Middle East, supported by newly commissioned terminals at Mangalore and Haldia.

In a significant move towards forward integration, Himadri is setting up a facility for anthraquinone and carbazole production from existing coal tar distillates, expected to be commissioned by Q2 FY27. This initiative aims to reduce import dependency and enhance value addition in the dye, pigment, pharmaceutical, and agro-chem industries. The company has also launched its branded retail offering of naphthalene balls, 'Durofresh™', leveraging its decades of technical expertise to capture greater value in the B2C market, with equipment for larger capacity installation expected in the next 3-4 months.

Pioneering New Energy Materials

One of Himadri's most transformative ventures is its foray into lithium-ion battery materials. The company is investing to become the world's first commercial-scale manufacturer of LFP Cathode Active Material outside China, targeting a phase capacity of 200,000 MTPA, with the initial 40,000 MTPA plant expected to be operational by Q3 FY27. This strategic move aligns with India's vision for clean energy and Atmanirbhar Bharat.

Himadri has also made significant investments in anode technologies, including natural and synthetic graphite, and silicon-carbon. Strategic partnerships, such as the exclusive technology licensing with Sicona Battery Technologies in Australia, grant Himadri rights to commercialize advanced silicon carbon anode technology in India, promising over 20% higher energy density and 40% faster charging times. Investments in International Battery Company (IBC) and Invati Creations further strengthen its position across the LIB value chain, from anode and cathode materials to cell manufacturing.

Sustainability and Operational Excellence

Sustainability is a core tenet of Himadri's operations. The company achieved the prestigious ISCC-Plus certification for its Mahistikry plant, an 'A' rating in CDP's Suppliers Engagement Assessment, and a Platinum rating from EcoVadis, placing it among the top 1% of companies globally for sustainability performance. All manufacturing sites operate as zero-liquid discharge facilities, utilizing 100% in-house clean power for electrical energy needs. These sustainability practices not only align with global ESG standards but also translate into business advantages, including pricing premiums and enhanced market access.

The company's operational efficiency initiatives, including yield improvement, energy saving, and waste heat recovery systems, have consistently contributed to margin expansion. Management highlighted that 65-70% of margin improvement is attributed to the shift towards high-value-added products, with the remaining 30-35% from operational efficiencies. This disciplined approach to capital allocation and focus on sustainable value creation positions Himadri for continued robust performance.

Outlook and Future Growth

Himadri is well-poised for significant future growth. Management reiterated its guidance to double PAT from FY24 to FY27, noting that the company is already ahead of schedule. They anticipate double-digit growth resumption in FY27, driven by new capacity additions and the ramp-up of new business verticals. The Birla Tyres business, currently in a start-up phase, is expected to achieve 30-40% capacity utilization next year, focusing on off-highway, commercial vehicle, and passenger car radial segments, including EVs and SUVs. With a strong balance sheet and a commitment to funding future expansions through internal accruals, Himadri expects to be net debt positive by March. The company's proactive approach to market trends, technological shifts, and sustainable practices underscores its ambition to establish industry-defining benchmarks and shape the next era of growth.