Himadri Reloaded: Record FY26 and a Bigger Bet on Battery Materials

Himadri Speciality Chemical Ltd closed FY26 with what management described as a year of delivering on commitments. On a consolidated basis, revenue from operations rose marginally to Rs. 4,660.7 crores, but profitability moved to a new level. EBITDA climbed to Rs. 1,005.7 crores, profit before tax reached Rs. 1,000.9 crores, and profit after tax came in at Rs. 755.1 crores. The company also ended the year as a net cash company, with cash of Rs. 121 crores.

The Q4 print showed the same pattern. Consolidated revenue from operations was Rs. 1,287.8 crores, up 13.5% year on year. EBITDA was Rs. 279.9 crores, up 21.2%, and PAT was Rs. 207.5 crores, up 33.5%. The message was clear: even without headline revenue growth for the full year, the portfolio and margin mix have shifted in Himadri’s favour.

Profitability was supported by stable volumes and higher margins, with the company repeatedly highlighting its push toward value-added products and deeper integration across its carbon value chain. FY26 was also the year when two operational milestones moved from plan to execution: commercial operations of a 70,000 MTPA speciality carbon black line at Mahistikry and the commencement of Birla Tyres operations in Q1 FY26, now in gradual ramp-up.

The board recommended a final dividend of Re 0.80 per equity share of Re 1 each for FY26, subject to shareholder approval.

FY26 was a margin story, not a volume story

Himadri’s consolidated revenue from operations increased to Rs. 4,660.7 crores in FY26 from Rs. 4,612.6 crores in FY25, a 1.04% rise. Yet EBITDA rose 18.8% to Rs. 1,005.7 crores, and PAT rose 36.0% to Rs. 755.1 crores. That divergence matters because it signals structural improvement in earnings quality.

The longer-term trend also supports management’s claim of a more profitable growth model. From FY22 to FY26, consolidated revenue grew from Rs. 2,791 crores to Rs. 4,661 crores, a 14% CAGR. Over the same period, EBITDA grew from Rs. 163 crores to Rs. 1,006 crores, a 58% CAGR, and PAT increased from Rs. 39 crores to Rs. 755 crores, a 110% CAGR.

Operationally, standalone sales volume growth has been steady. Standalone volumes rose to 5,64,206 MT in FY26 from 5,52,206 MT in FY25, with FY22 to FY26 volume CAGR of 11%. Returns on capital remained strong. ROCE (excluding investments and CWIP) was 32% in FY26, after reaching 33% in FY25 and rising sharply from 6% in FY22.

Cash positioning has shifted too. Consolidated cash was Rs. 121 crores at March 2026 versus Rs. 392 crores at March 2025. The change reflects a year of heavy investing and expansion, rather than weakening operating cash generation. In consolidated cash flow, cash generated from operations was Rs. 612.9 crores and net cash from operating activities was Rs. 382.0 crores in FY26. Net cash used in investing activities was Rs. 963.8 crores, indicating the scale of growth capex and strategic investments.

Core chemicals still fund the future, but the portfolio is widening

Himadri’s narrative is built around a simple idea: the core coal tar derivatives and carbon black franchise creates cash and capabilities, and that foundation is now being used to enter higher-value adjacencies. The investor presentation frames this as shifting gears toward high-value growth and diversification to drive resilience.

In the core business, the company is expanding its footprint in liquid coal tar pitch exports. It commissioned high temperature liquid coal tar pitch terminals at Haldia and Mangalore port and plans to build a stronger export presence. It points to approvals across major aluminium players, global brand recognition, and an existing product reach across 61 countries.

In speciality carbon black, the commissioning of a 70,000 MTPA speciality carbon black line at Mahistikry is central to the growth plan. Total carbon black capacity is now 250,000 MTPA, including 130,000 MTPA of speciality carbon black. The company positions this as a competitive advantage for higher-value applications such as batteries, plastics, inks, paints, coatings, conductive blacks for wires and cables, and other niche segments.

Product development remains a key theme. Himadri highlights nine speciality black series with more than 70 grades, and notes the launch of new Li plus and LB series grades for battery applications. The R and D engine is presented as structured and iterative, from product conception to bench scale work, pilot production, commercialization, and customer feedback. Its facilities are NABL-accredited.

The portfolio is also moving toward consumer adjacency through Durofresh, a branded naphthalene balls offering. Himadri claims Durofresh delivers 99.5% purity, making it stain free and improving vapour strength. The company cites market estimates for the global naphthalene mothballs market at USD 1.5 billion in 2024, expected to reach USD 2.1 billion by 2033, and domestic Indian market forecast at USD 232 million by 2030. The logic here is straightforward: capture more value from the existing naphthalene value chain and build brand equity.

A separate but related forward integration is underway in speciality chemicals. Himadri plans to set up a facility to extract anthraquinone and carbazole from its existing coal tar distillates with expected capex of Rs. 120 crores, commissioned by Q2 FY27. It describes this as first of its kind in India at this scale and aimed at reducing import reliance.

Battery materials move from concept to execution

The presentation’s headline strategic shift is the move deeper into lithium-ion battery materials, where cathode and anode together represent close to 65% of total Li-ion cell cost. Himadri’s approach appears to blend internal development, backward integration, and strategic investments.

On anode materials, the company commenced operations at its first anode material production facility with capacity of 200 MTPA at Mahistikry in April 2026. It positions this plant as the result of more than 10 years of in-house R and D, and highlights a differentiator: using specially engineered, high-purity coal tar pitch produced in-house to improve quality control and consistency. The plant is designed to accommodate alternative raw material feeds, a detail that matters in a fast-evolving battery materials market.

On cathode materials, the company’s stated vision is to produce 200,000 MTPA of lithium iron phosphate cathode active material in phases over 5 to 6 years, catering to 100 GWh of Li-ion battery. The company frames its project as the first commercial plant for LFP cathode active material globally ex-China, targeting domestic and international markets.

Execution milestones are clearly defined. Phase I is progressing, with the first milestone capacity of 2,000 MTPA targeted for commencement by Q3 FY27. The balance of Phase I capacity is expected to be commissioned progressively over the subsequent 12 months, with FY29 envisaged as the year of full operations.

Importantly, management adds a capital allocation lens: the company says it will remain focused on disciplined capital allocation to drive sustainable returns and maintain a robust ROCE profile. That line is a subtle acknowledgement that the LFP opportunity is large, but so are the risks of overbuilding.

The market context in the deck is ambitious. Cathode demand is projected to reach 9.4 million tons annually by 2030 for global LiB cell production. For anode materials, global sales volume is expected to rise to 8 million MTPA in 2030 from 2.206 million MTPA in 2024, implying a 24% CAGR. India is positioned as a strategic alternative supply chain hub, supporting export opportunities for cathode active material and anode producers.

Himadri also signals intent to participate in recycling. It notes that global availability of EV batteries for recycling is expected to increase 25% year on year till 2040, with the mix shifting from production scrap before 2030 to end-of-life batteries after 2030. The company highlights its selection by the Indo German Science and Technology Centre for a battery recycling initiative.

Partnerships and acquisitions: building optionality across the EV value chain

Himadri’s investment strategy is presented as targeted and strategic rather than purely financial.

The most prominent stake is in Sicona Battery Technologies. Himadri has invested about Rs. 138.34 crores to date, entitling it to about 19% to 22% post-conversion equity, subject to conversion terms. Himadri has two nominee directors on Sicona’s board. The strategic value is an exclusive technology licensing partnership granting Himadri rights to access, localize, and commercialize Sicona’s SiCx silicon-carbon anode technology in India. Sicona claims SiCx offers over 20% increase in energy density compared to conventional graphite-only cells and reduces charging time by more than 40%.

The second partnership is International Battery Company, Inc (IBC), USA. Himadri acquired a 17.29% stake through an investment of about USD 5.43 million (about Rs. 46.89 crores) and has a nominee director on the board. IBC operates a 50 MWh lithium-ion cell facility in South Korea and is developing a gigafactory in Bengaluru in a JV with Mahanagar Gas Limited, with India gigafactory commencement targeted by Q4 FY27. The collaboration is practical: IBC has approved Himadri’s samples for graphite anodes and plans to incorporate them in prismatic cells for the two-wheeler market in India. Trials are also underway for cells using Himadri LFP as cathode and Sicona SiCx as anode.

Himadri also acquired a 40% stake in Invati Creations and appointed two nominee directors. Invati focuses on engineering lithium-ion electrode materials and nanotechnology solutions, with multiple patented and patentable technologies.

Outside battery materials, the acquisition of Birla Tyres adds a consumer-facing and mobility adjacency. Management describes it as a turnaround opportunity and a strategic foray into the B2C tyre space. Birla Tyres has commenced operations in Q1 FY26 and is ramping up gradually, with a focus on speciality tyres for off-highway, commercial vehicles, agriculture, industrial, and EV segments. The plan also includes commissioning a passenger car radial tyre unit aimed at EVs and SUVs.

The investor takeaway: Himadri is funding reinvention without losing discipline

FY26 is best read as a year where Himadri’s strategy became more tangible. The company delivered record consolidated EBITDA of Rs. 1,005.7 crores and record PAT of Rs. 755.1 crores. It also converted that operating strength into execution milestones, including the start-up of a 70,000 MTPA speciality carbon black line and the commissioning of a 200 MTPA anode material facility.

What investors will watch next is whether the next phase of growth maintains the same balance of ambition and discipline. The FY27 to FY28 roadmap is crowded: full-year operations from the speciality carbon black expansion, completion of anthraquinone and carbazole forward integration by Q2 FY27, Phase 1 commercial LFP cathode active material plant by Q3 FY27, and continued ramp-up at Birla Tyres.

The story is not just about growth. It is about building a higher-quality earnings base that can support long-cycle investments in advanced materials. If Himadri can keep ROCE strong while scaling LFP and anode capabilities, FY26 may be remembered as the year when a profitable carbon franchise began to fund a credible battery materials platform.