Himadri Speciality Chemical Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

3 Kamlesh Agarwal, Anurag Choudhary, Somesh Satnalika

Analysts

11 Isha Agarwal, Bhavika, Bhavin Chheda, Sanjesh Jain, Sagar Jethwani, Harsh Motika, Deepak Poddar, Ranvir Singh, Rohit Sinha, Parth Sodha, Tanvi Warekar

Financials & KPIs

Geographic & Segment Commentary

• Coal Tar Pitch & Derivatives: Operates the world's largest single-location fully integrated carbon complex with 600,000 MTPA coal tar distillation capacity and domestic market share above 65%; liquid Coal Tar Pitch terminals at Haldia and Mangalore strengthen global export capability. Forward integration into anthraquinone and carbazole (5,300 MTPA total; India's first commercial plant) progresses with initial 2,600 MTPA commissioning in Q2FY27 and balance 2,700 MTPA in Q2FY28.
• Speciality Carbon Black: 250,000 MTPA total capacity including 130,000 MTPA of speciality carbon black across 70+ grades; "lab-first, plant-later" approach ensures capacity expansion is backed by validated applications. New 6,000 MTPA super speciality conversion targets premium niche segments (lithium-ion batteries, engineered plastics, conductive black) with multi-fold higher value addition.
• New Energy Materials: 200 MTPA anode facility at Mahistikry commissioned April 2026 (₹120 Cr spent), designed with feedstock flexibility using in-house engineered pitch for backward integration; Sample B supplied to all Indian customers and global OEMs with qualification cycle of 1.5-2 years. LFP cathode initial 2,000 MTPA due Q3FY27 as first milestone of 40,000 MTPA Phase 1; 100% of current global LFP capacity rests in China.
• Birla Tyres: Commercial operations since May 29, 2025; Q1 FY27 sales ~₹127 Crores with quarter-on-quarter volume ramp-up; distribution network spans 49 distributors and 1,000+ dealers; launched 3 new agriculture SKU lines (AGRIWIN, AGRIPLUS, AGRILEAP T40) with 400+ SKUs under development. TBB capacity progressively converting to OTR over 3 years; PCR facility targeted by FY28 for EV/SUV entry.
• Mining (Other Segment): Operations suspended during Q1 FY27 awaiting environmental clearance; segment EBIT fell to ~₹1 Crore from ₹25 Crores QoQ; management has no visibility on timeline (estimated 3-6 months).

Company-Specific & Strategic Commentary

• Carbon Nanotube (CNT) Entry: Developed indigenous CNT technology through in-house R&D; ₹70 Crores capex for 200 MTPA facility targeting Q4FY27 commissioning, positioning Himadri among a select group of global manufacturers and first in India; CNT offers ~100x steel strength with copper conductivity, with applications in lithium-ion batteries, semiconductors, electronics, sensors, polymers, coatings and aerospace.
• Super Speciality Carbon Black: Converting 6,000 MTPA of existing commodity capacity with ₹170 Crores capex; high-purity segment serving lithium-ion batteries, engineered plastics, fabrics, fibers and conductive black; leverages same integrated feedstock base for significantly higher realisations; ~3x asset ratio revenue potential.
• Battery Value Chain Integration: Strategic investee Sicona secured AUD45 million to accelerate silicon-carbon anode commercialization; increased stake in International Battery Company (IBC), whose prismatic cells commercially use Himadri LFP, anode and silicon-carbon materials; IBC is setting up a 7 GWh India facility (expected Q4FY27) using Himadri raw materials.
• Self-Reliant Battery Materials Platform: Long-term vision to scale LFP cathode to 200,000 MTPA (₹4,800 Cr capex announced), targeting 2-3% global market share; Himadri was the first company globally to supply coal tar-based precursor to top Chinese anode players, underpinning its anode technology credibility; working across synthetic, natural and silicon-carbon anode chemistries.
• Birla Tyres Strategic Transformation: Modernising manufacturing infrastructure with automation upgrades; phased TBB-to-OTR conversion over next 3 years supported by additional capex; PCR commissioning by FY28 paves way for EV and SUV tyre segments; ₹3,000 Crores top line target in 4-5 years.
• Sustainability & Global Credentials: All plants operate on zero-liquid discharge basis; EcoVadis Platinum rating reaffirmed, placing Himadri among top 1% of globally assessed companies; management notes sustainability credentials are increasingly commercial prerequisites in global value chains.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Mining Suspension Hit "Other" Segment EBIT

• Question: Other segment EBIT fell from ₹25 Crores to ~₹1 Crore QoQ despite flat revenue - what changed? (Sanjesh Jain, ICICI Securities)
• Answer: Mining operations were idle awaiting licensing; revenue line was offset by Birla Tyres ramp-up (Anurag Choudhary)

CNT & Super Speciality Carbon Black - New Growth Vectors

• Question: What is the market size, application profile and competitive positioning for CNT and super speciality carbon black? (Sanjesh Jain, ICICI Securities)
• Answer: CNT is graphene rolled into a seamless cylinder - 100x steel strength with copper conductivity; global market ~30,000 MT and growing; very few global producers, first in India, targeting global customers. Super speciality market is ~300,000 MT vs 1 million+ MT for speciality; value addition is multi-fold; converting commodity capacity (not speciality) as customers require a full product portfolio (Anurag Choudhary)

Revenue Potential of New Capex Projects

• Question: What is the revenue potential at optimum utilisation for the five new capex projects? (Deepak Poddar, Sapphire Capital)
• Answer: 40,000 MT LFP = ₹3,000 Crores; anthraquinone/carbazole = ₹250-300 Crores; super speciality carbon black = ~₹500 Crores (3x asset ratio); CNT = ₹50-70 Crores initially with scale-up later; 200 MT anode = ₹120-130 Crores (Anurag Choudhary)

Competing with Chinese LFP Producers

• Question: How do the economics work competing with Chinese players with massive capacity at par pricing? (Sagar Jethwani, PhillipCapital PMS)
• Answer: No dependence on China for raw materials; India production base and proprietary in-house technology provide cost advantage; pricing at par with China. IBC partnership validates quality - Himadri LFP is commercially used in IBC cells, putting technology outside China with supply chain positioned outside China (Anurag Choudhary)

LFP Cost Feasibility Challenged

• Question: Our workings show negative gross spread at China pricing - where is lithium carbonate sourced? (Tanvi Warekar, Anand Rathi Institutional Equities)
• Answer: Excel-based calculations cannot determine actual margins; sourcing details are confidential (Anurag Choudhary)

Anode Sampling & Qualification Progress

• Question: What is the customer response, sample status and approval timeline for anode material? (Sanjesh Jain, ICICI Securities; Bhavika, Niveshaay)
• Answer: Sample A complete; Sample B supplied to all Indian customers and many global OEMs; approval process normally takes 1.5-2 years but is already advanced; commercial 200 MT plant positions Himadri to secure approvals ahead of larger capacity commissioning. Strong customer traction in India and globally; Himadri is the first in India with a pilot plant (Anurag Choudhary)

Capex Phasing & Self-Funding

• Question: What is the year-wise consolidated capex for the next 2-3 years? (Bhavin Chheda, Enam Holdings)
• Answer: ~₹2,000 Crores total announced (₹1,125 Cr LFP + ₹368 Cr CNT/SSCB + ~₹500 Cr Birla Tyres); ~₹1,000 Crores in FY27 and ~₹1,000 Crores in FY28; fully funded by free cash flow with no incremental debt (Anurag Choudhary)

Birla Tyres Ramp-Up Trajectory

• Question: What are Birla Tyres' quarterly sales, EBITDA breakeven level and revenue target? (Bhavin Chheda, Enam Holdings)
• Answer: Q1 FY27 sales ~₹127 Crores; not yet EBITDA positive but will reach EBITDA breakeven and cash positive in FY27; ₹3,000 Crores top line target in 4-5 years; ramping volumes quarter-on-quarter; PCR facility by FY28 (Anurag Choudhary)

FX Losses & Other Income Drivers

• Question: What caused the forex swing and higher other income - is there a hedging policy change? (Isha Agarwal, VT Capital)
• Answer: No hedging policy change; currency volatility drove losses - Q1 is the last quarter of negative FX impact. Other income from FD arbitrage (bank/CP borrowings deployed in FDs), mutual fund investments and MTM gains on IBC, Sicona and Birla Tyres NCDs; will vary 30-40% QoQ (Anurag Choudhary)

FY28 PAT Guidance Reaffirmed

• Question: Have assumptions underlying the ₹1,100 Crores PAT by FY28 changed? (Parth Sodha, Trinetra Asset Managers)
• Answer: Nothing negative - things are moving in the right direction; guidance unchanged at ₹1,100 Crores (Anurag Choudhary)

Key Takeaway

Himadri Speciality Chemical delivered a strong Q1 FY27: consolidated revenue rose 28% YoY to ₹1,432 crores, EBITDA grew 33% to ₹313 crores (22% margin), and PAT grew 27% to ₹228 crores (16% margin), driven by higher-value product mix and Birla Tyres ramp-up. Management unveiled Carbon Nanotube (₹70 crore capex, 200 MTPA, Q4FY27 commissioning) and Super Speciality Carbon Black (₹170 crore capex, 6,000 MTPA) as new growth platforms, while battery materials advanced - a 200 MTPA anode plant commissioned April 2026 (₹120 crore spent) and 2,000 MTPA LFP cathode due Q3FY27, scaling toward 40,000 MTPA with ₹1,125 crore capex. The ₹1,100 crore FY28 PAT target and ~₹2,000 crore self-funded capex plan (₹1,000 crore annually over FY27-28) remain intact. Key watch items: mining licence suspension, FX volatility, Chinese LFP competition, and 1.5-2 year customer qualification cycles.