Himadri Speciality Chemical Q2 FY27: Growth accelerates as the portfolio shifts toward advanced materials

Himadri Speciality Chemical Ltd reported a strong Q2 FY27, with consolidated revenue from operations at Rs 1,691.43 crore, up 57.93% year on year. Profitability also improved versus last year, with consolidated EBITDA of Rs 303.22 crore, up 27.48%, and consolidated profit after tax at Rs 231.32 crore, up 31.33%. The quarter reinforced a clear theme running through the investor presentation. The company is trying to compress decades of evolution into a few years by moving from coal tar derivatives toward a global, application-led advanced materials platform.

The numbers show growth, but the presentation is just as focused on positioning. Management frames Himadri as operating at the intersection of materials science, energy transition, and high-performance applications. That strategy has visible building blocks: expansion in specialty carbon black, deeper forward integration into specialty chemicals, entry into battery materials, and a corporate action to integrate the tyre value chain more tightly.

Q2 FY27 financial snapshot and what stood out

On a standalone basis, Q2 FY27 revenue from operations was Rs 1,542.67 crore, up 44.12% year on year. Standalone EBITDA was Rs 308.19 crore, up 26.98%, and profit after tax was Rs 239.77 crore, up 28.32%. Consolidated results showed faster top-line growth, indicating incremental contribution from subsidiaries and associated activities.

The company also reported sales volume (standalone) rising to 146,806 metric tonnes in Q2 FY27 from 135,513 metric tonnes in Q2 FY26, while highlighting a move toward higher value addition products. A notable nuance is that consolidated EBITDA declined sequentially to Rs 303.22 crore in Q2 FY27 from Rs 313.11 crore in Q1 FY27, despite revenue rising. The presentation does not provide a segment-level bridge, so investors cannot independently validate which parts of the portfolio drove mix, margin, or cost changes.

The operating model: carbon scale plus downstream value addition

Himadri continues to anchor its core in a fully integrated carbon complex. The presentation states it operates eight zero liquid discharge plants across India and China. The coal tar pitch business is described as being supported by 600,000 metric tonnes per annum of coal tar distillation capacity, a 292 heated-tanker fleet, and 65% domestic market share. It also highlights Haldia and Mangalore port terminals that were commissioned to meet rising international demand.

In specialty carbon black, the company positions itself as moving from commodity scale to technology-led value. It notes carbon black capacity of around 250,000 metric tonnes per annum and specialty carbon black capacity of around 130,000 metric tonnes per annum, along with a portfolio of 70 plus specialty grades. The emphasis is on a lab-first, plant-later approach, using integration and feedstock control to drive consistency, customization, and margins.

A meaningful disclosure here is the company’s brand architecture within specialty carbon black. It lists specialty black series brands such as ENERGEX, ONYX, JETEX, KLAREX, ELECTRA, COLORX, BARONX, VIRTEX, and TERVION, each mapped to a customer use case from batteries and cables to pigments and concrete enhancement.

Forward integration is another pillar. The presentation outlines value-added products including naphthalene, SNF and PCE for concrete admixtures, and upcoming specialty chemicals. It also mentions a branded retail offering of naphthalene balls under the Durofresh brand, positioned as a consumer-facing extension of a high-purity naphthalene franchise.

The next platform: battery materials and new energy

The investor deck places new energy materials at the center of the medium-term roadmap. The company states it has established a 200 metric tonnes per annum anode material facility at Mahistikry, commissioned in April 2026, supported by 10 plus years of in-house research and development. Customer approvals are described as being at various stages.

The larger bet is lithium iron phosphate cathode active material. Himadri discloses a capex plan of Rs 1,125 crore for Phase 1 capacity of 40,000 metric tonnes per annum. It also states that a 2,000 metric tonnes per annum demo capacity is expected to commission in Q3 FY27. The deck further mentions a targeted capacity of 200,000 metric tonnes per annum, with ramp-up linked to customer approvals.

In adjacent advanced materials, the company is building a carbon nano tube plant, described as India’s first commercial carbon nano tube production. It discloses capex of Rs 70 crore, target timeline of Q4 FY27, and capacity of 200 metric tonnes per annum. It also plans a super speciality carbon black project, converting existing carbon black into 6,000 metric tonnes per annum of super speciality grades with capex of Rs 170 crore and commissioning targeted for Q4 FY28.

The strategic investment ecosystem is presented as another route to capability building. The deck discusses Sicona Battery Technologies and its silicon-carbon anode platform, including disclosure that Sicona secured up to AUD 45 million of Australian Renewable Energy Agency funding and completed 100% acquisition of Advano in the United States. Himadri also outlines its stake in International Battery Company at 19.44%, with a nominee director position, and notes that commercial operations for an India gigafactory are on track for Q1 FY28.

Corporate action and value chain integration: tyres

Himadri also disclosed a proposed demerger structure to integrate the tyre business. The board approval date is stated as 21 September 2026, with the appointed date as 1 October 2026. The rationale is framed as leveraging Himadri’s research and development and manufacturing to accelerate tyre business growth, while improving strategic and financial flexibility and enabling synergies across the value chain. The presentation is explicit that the demerger remains subject to statutory, regulatory, creditor, and shareholder approvals.

Operationally, the deck notes that Birla Tyres production commenced in Q1 FY26 and will gradually ramp up. It also states a distribution footprint of 49 distributors, comprising 40 domestic and nine global, and 1,300 plus dealers. It outlines a target of around 400 new stock keeping units across agriculture, commercial, truck and bus, and other segments, with passenger car radial entry for electric vehicles and sport utility vehicles targeted, and commissioning aimed by FY28.

Balance sheet and cash flow: a mixed picture

While profitability is strong, cash conversion in the first half of FY27 was weak due to working capital. Standalone operating cash flow for the six months ended September 2026 was negative Rs 96.13 crore, driven by a working capital outflow of Rs 626.60 crore. Consolidated operating cash flow was also negative at Rs 154.35 crore with a working capital outflow of Rs 686.25 crore.

The balance sheet shows higher current borrowings. On a standalone basis, current borrowings increased to Rs 1,082.93 crore at September 2026 from Rs 719.24 crore at March 2026. Consolidated current borrowings rose to Rs 1,152.26 crore from Rs 762.11 crore over the same period. These moves matter because the company is running a large capex program in parallel with customer qualification cycles in new energy materials, which can increase the need for liquidity resilience.

That said, the multi-year performance trend is clearly positive. On a consolidated basis, the company reported revenue from operations of Rs 4,661 crore in FY26 and EBITDA of Rs 1,006 crore. Profit after tax was Rs 755 crore in FY26. It also presented return on capital employed at 32% for FY26, up from 6% in FY22, excluding investments and capital work-in-progress.

What investors should track from here

The presentation outlines a roadmap with tangible, dated milestones. Anthraquinone and Carbazole capacity of 5,300 metric tonnes per annum is expected to complete by Q4 FY27. The LFP cathode milestone of 2,000 metric tonnes per annum is expected by Q3 FY27, with Phase 1 capacity at 40,000 metric tonnes per annum. Carbon nano tube commissioning is targeted for Q4 FY27, while super speciality carbon black is targeted for Q4 FY28.

The next phase for Himadri is less about describing ambition and more about converting these projects into stable revenue streams, with transparent disclosure on customer approvals, utilization ramps, and segment economics. Investors should also watch working capital discipline closely. The company is profitable, but the first half cash flow indicates that growth is consuming cash at the operating level, and the balance sheet is already carrying higher short-term borrowings.

If Himadri executes as per the stated timelines and converts its new energy and advanced materials portfolio into repeat orders, the business could look meaningfully different by FY28. But the near-term test is straightforward: deliver commissioning milestones, secure customer qualifications, and keep cash conversion stable while scaling.