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Himadri Special
Our verdict on Himadri Special isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company reported an increase in EBITDA per kg from Rs. 15 to Rs. 17 over the last year, which translates to Rs. 17,000 per tonne, exceeding the prior guidance of Rs. 16,500. (3 exceeded across 3 tracked commitments)
“So, our EBITDA per metric tonne margin is around Rs. 16,500 now... We are confident of this number being maintained, and gradually you will see upward movement in these numbers.”
Management successfully commenced trial production for the 70,000 MTPA brownfield expansion in December 2025, meeting the Q3FY26 timeline. (3 met across 3 tracked commitments)
“So for the next year, you can look at around 85% capacity utilization for speciality carbon.”
The company achieved a 19.30% reduction in energy intensity, which is within the 5% tolerance of the 20% target. (1 met across 1 tracked commitment)
“Energy Consumption... Target FY 2026 -20%... Result FY 2026 -19.30%”
Birla Tyres operations commenced in Q1FY26 as planned and are currently in the ramp-up phase. (2 met across 2 tracked commitments)
“Birla Tyres* Strategy: Turnaround + Gain Market Share Capex: Rs. 306 Cr Operational Commencement: Q1FY26”
The company has already achieved a 36.08% reduction in Scope 1 & 2 emission intensity, surpassing the FY26 target of 30%. (2 exceeded, 2 met, 1 missed across 5 tracked commitments)
“Gender Diversity: Increase female representation in management team(vs 2021). Target FY 2026: 6.5%”
See the full cited Management analysis of Himadri Special
How durable is the business?
Himadri strengthened its scale moat by more than doubling its Specialty Black capacity to 130,000 TPA, creating the world's largest single-site facility for this segment. (1 expanding)
“Himadri more than doubled Speciality Black capacity in FY 2025-26 to emerge as the largest manufacturer in India and the fourth largest in the world.”
Strengthening backward integration by setting up a facility to extract high-value chemicals (anthraquinone/carbazole) from existing distillates and exploring mining for battery materials. (2 expanding)
“Mr. Anurag Choudhary (CMD & CEO)... recognizing his leadership in driving Himadri's transformation into a diversified speciality chemicals and advanced materials company.”
The core business is evolving from a commodity focus to a high-value specialty chemical and battery material engine. While Q1FY26 revenue saw a decline due to raw material price corrections, EBITDA and PAT grew significantly, driven by a shift toward higher-margin specialty products. (4 expanding, 1 stable)
“Net Revenue From Operations 1,100.42 ... EBITDA 233.97 ... Significant growth led by focus on High Value Speciality Products and low raw material price”
Revenue contracted due to raw material price corrections, but profitability (EBITDA/PAT) reached record highs driven by high-value product mix and operational efficiencies. (1 shifted, 4 expanding)
“Consolidated revenue for the quarter stood at Rs. 1,118 crores as compared to Rs. 1,200 crores a year ago. The revenue was marginally impacted majorly because of correction in raw material prices... Our EBITDA stood at Rs. 235 crores as compared to Rs. 188 crores a year ago with a growth rate of 25%.”
Revenue saw a slight contraction due to a 13-15% correction in raw material prices and a deferment of export sales recognition to the next quarter. (1 contracting)
“revenue from operations for Q2 FY26 stood at Rs. 1,070 crores compared to Rs. 1,135 crores in Q2 FY25, primarily impacted by the correction in raw material prices... and deferment of sales recognition for export shipment to Q3.”
See the full cited Business Model analysis of Himadri Special
Where does growth come from?
The project is entering a critical execution phase with a massive Rs. 1,125 Cr capex commitment and a clear roadmap to reach 2,00,000 MTPA in 5-6 years. (3 new trend, 2 steady across 5 signals, 1 leading indicator)
“Successfully commenced operations at our first anode material production facility (200 MTPA) at Mahistikry, West Bengal in April 2026.”
The expansion project is on track with a steady timeline and confirmed capex of Rs. 220 Cr to reach 1,30,000 MTPA, making it the world's largest single-site facility for this material. (5 steady across 5 signals, 1 leading indicator)
“Commenced commercial operations of 70,000 MTPA Speciality Carbon Black Line at Mahistikry, West Bengal... Himadri’s total carbon black capacity now stands at 250,000 MTPA, including 130,000 MTPA of speciality carbon black”
The turnaround is accelerating with operations scheduled to commence in Q1 FY26 and a focus on high-value segments like Off-Highway (OHT) and EV tyres. (2 accelerating, 3 new trend across 5 signals)
“Birla Tyres* Strategy: Turnaround + Gain Market Share. Capex: Rs. 306 Cr. Operational Commencement: Q1FY26”
Forward integration into high-value chemicals (Anthraquinone & Carbazole) is confirmed with a Rs. 120 Cr investment to eliminate import reliance. (3 steady across 3 signals, 4 leading indicators)
“Phase I of the LFP cathode active material project is progressing as planned, with the first milestone capacity of 2,000 MTPA targeted for commencement by Q3FY27.”
Profitability is showing strong acceleration; while revenue dipped due to raw material price corrections, EBITDA grew by 25% and PAT by 48% in the most recent quarter. (5 accelerating across 5 signals)
“Strategic focus on value-added products continues to fuel profitability growth... EBITDA (Rs. in Cr) FY26: 1,006”
See the full cited Future Growth analysis of Himadri Special
What could break the thesis?
The risk is INTENSIFYING as the project enters the critical commencement phase. Operations are scheduled to begin in Q1FY26 with a gradual ramp-up. The company is committing ₹306 Cr to this turnaround, which involves a complete rebranding and modernization. (1 intensifying, 2 easing, 2 stable, 1 high-severity)
“Birla Tyres - turnaround opportunity... Additional Capex will be incurred over next 3 years for upgradation, modernization and full capacity commencement”
The risk is STABLE but remains high. The company is moving from R&D to the 'Demonstration and Commercialisation' phase. The first commercial LFP plant (40,000 MTPA) is now scheduled for Q3FY27, representing a significant execution milestone. (5 stable, 1 high-severity)
“To produce 200,000 MTPA of Lithium Iron Phosphate (LFP) Cathode Active Material... in a phased manner over the next 5-6 years”
INTENSIFYING. Capital Work-in-Progress (CWIP) has nearly doubled from ₹176.45 Cr in March 2025 to ₹338.32 Cr in September 2025 on a standalone basis, indicating heavy ongoing investment. Total assets have grown significantly, but the company is now relying more on short-term debt to fund these activities. (5 intensifying, 1 high-severity)
“Birla Tyres Rs. 306 Cr, Speciality Carbon Black Rs. 220 Cr, LFP Rs. 1,125 Cr, Speciality Chemicals Rs. 120 Cr”
EASING. Management reports that speciality products and operational efficiencies now drive 65-70% of margin improvement. EBITDA per kg has increased from ₹15 to ₹17, bucking global trends of margin stress in the sector. (3 easing, 2 stable)
“Himadri’s total carbon black capacity now stands at 250,000 MTPA, including 130,000 MTPA of speciality carbon black”
The risk is EASING regarding raw material costs but remains a factor for revenue. Q1FY26 revenue decreased by 8% specifically due to a 'correction in raw material prices,' though EBITDA increased by 25%, suggesting the company successfully managed the spread. (1 easing)
“Revenue impacted due to correction in raw material prices... EBITDA increased by 25% to Rs. 234 Cr yoy in Q1FY26”
See the full cited Risk analysis of Himadri Special
Read the full thesis on Himadri Special
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