HSCL - Himadri Speciality Chemical Ltd. Share Price

Management's outlook for Himadri Speciality Chemical Ltd is optimistic, highlighting continued growth driven by several key initiatives and expansions. The company has commenced trial production at its new speciality carbon black expansion project, enhancing its total capacity to 130,000 metric tons per annum, positioning Himadri as having the world's largest single-site speciality carbon black plant. They expect this project will significantly contribute to future revenue growth, alongside improvements in operational efficiencies and sustainability measures.

Himadri has also reported strong financial performance, with a 41% year-on-year increase in profit after tax (PAT), which reached INR 564 crores in the first nine months of FY '26, already exceeding the complete FY '25 figure. The company anticipates maintaining this upward trajectory, with guidance indicating a doubling of PAT from FY '25's INR 558 crores to over INR 800 crores by FY '28.

Key forward-looking points include the establishment of a first-of-its-kind lithium iron phosphate (LFP) cathode active material facility, aiming for a capacity of 200,000 metric tons phased in by FY '29, with a first commercial phase of 40,000 metric tons set to be operational by Q3 FY '27. Himadri also highlights its ongoing investment in R&D for product innovation and market competitiveness.

In terms of strategic positioning, management noted that the demand for anode and cathode materials will not be constrained, given the expected exponential growth in global lithium-ion cell production. Additionally, the company emphasizes its commitment to eco-friendly practices, achieving a platinum medal from EcoVadis for its sustainability initiatives.

Overall, Himadri's management expresses confidence in its strategic plan, leveraging enhanced capacity, innovation, and sustainable practices to drive future growth and value creation for stakeholders.

1. Question from Divyansh Thakur: "So we have mentioned the roadmap to grow and accelerate towards 2028. How do we see the coming years? And how can we shape the development for the company going ahead?"

   Answer: "We achieved a PAT of INR 411 crores in FY '24, and we anticipate doubling it to over INR 800 crores by FY '27. With the new capacities and value-added products, we're confident in our trajectory, aiming for a similar PAT doubling from FY '25 to FY '28. The guidance remains unchanged as we already neared our FY '26 target."

2. Question from Dhruvin Kadakia: "What is the EBITDA per ton? There's a decline on a sequential basis despite our revenues growing."

   Answer: "The EBITDA per ton's quarterly fluctuation is normal, with minor changes that stabilize over time. The dip isn't significant and reflects ongoing adjustments rather than a consistent drop."

3. Question from Smaran: "Is our target of 100 gigawatts for cathode aimed at capturing a huge market share or addressing substantial market demand?"

   Answer: "We're entering a space where demand won't limit us. The overall lithium-ion cell capacity is projected at 8,000 gigawatts in FY '30, making our 100 gigawatt focus a strategic approach rather than a market share conquest."

4. Question from Pratik Shah: "What are the key execution risks during the ramp-up phase?"

   Answer: "We have a robust SOP to ensure quality and consistency during the ramp-up. This mitigates risks of contamination and maintains production integrity throughout the expansion."

5. Question from Viraj Sanghvi: "What can we expect in terms of the new capacity's utilization rates over the next 1-3 years?"

   Answer: "Anticipate about 85% capacity utilization for specialty carbon next year, ramping up to 95-100% thereafter, thereby enhancing our operational efficiency and profitability in subsequent years."

6. Question from Ishani Jain: "What's the sourcing strategy for raw materials for battery production?"

   Answer: "We'll source raw materials globally, focusing on regions like Latin America and Australia, to ensure we procure the best quality inputs for our battery components and maintain competitive cost structures."