Himadri Speciality Chemical Q2 FY27 Earnings Call: Reaffirms Rs. 1,100 Cr+ FY28 PAT Guidance, Rs. 1,500 Cr Capex Funded Via Internal Accruals (HSCL)

Broad-Based Growth with Margin Expansion, Consolidation Drag from Idle Mining

• Standalone Q2 FY 2026-2027 revenue of Rs.1,543 Cr — up from Rs.1,070 Cr in Q2 FY 2025-2026; EBITDA at Rs.308 Cr (+27% YoY from Rs.243 Cr) and PAT at Rs.240 Cr (+28% YoY from Rs.187 Cr).
• Consolidated Q2 FY 2026-2027 revenue of Rs.1,691 Cr — vs Rs.1,071 Cr in Q2 FY 2025-2026; EBITDA Rs.303 Cr (+27% YoY), PAT Rs.231 Cr (+31% YoY).
• H1 FY 2026-2027 consolidated revenue surpassed Rs.3,000 Cr — EBITDA exceeded Rs.600 Cr and PAT crossed Rs.450 Cr, attributed to optimized product mix, operational efficiencies and value-added product focus.
• EBITDA margin expanded +308 bps YoY — from 17.91% in Q2 FY 2025-2026 to 20.99% in Q2 FY 2026-2027, driven by a higher value-added product mix; analyst Rohit Sinha flagged gross margin contraction of almost 500 bps YoY.
• Consolidated PAT (Rs.231 Cr) below standalone (Rs.240 Cr) — due to expenses in entities with no revenue generation, i.e., mining operations shut pending environmental clearance.
• Revenue grew 58% YoY — driven by 11% YoY volume growth plus higher prices of finished products and raw materials; growth was broad-based across all segments.
• Per-MT EBITDA at ~Rs.21,000 in Q2 FY 2026-2027 — vs ~Rs.17,900 in Q2 FY 2025-2026 and ~Rs.20,700-20,800 in Q1 FY 2026-2027; sequential dip attributed to normal business adjustments with no one-offs.

LFP, Anode, CNT and Specialty Chemicals on a Staged Commissioning Path

• LFP 2,000 MT plant on track for trial production in Q3 FY 2026-2027 — after 2-3 months of optimization, commercial plant-scale samples go to global OEMs and Indian players from Q4 FY 2026-2027 (laboratory-scale samples already approved); management endorsed the analyst's framing of 12-18 months from sample approval to commercialization.
• 40,000 MTPA LFP scale-up deferred to FY28 end — management said the deferral is deliberate so qualifications and approvals are secured before commercial production starts: "no point committing capex ahead of the curve."
• 200 MT anode plant commenced operations in Q1 FY 2026-2027 — quality "bang on target and even better"; Himadri exceeds the illustrative 100 mAh/g benchmark, and for synthetic graphite (theoretical max 360 mAh/g) management stated it is "very near to that"; no commercial approvals claimed yet.
• Carbon nanotube production to start in Q4 FY 2026-2027 — a material with strength of 100x steel, conductivity of copper and very light weight; no commercialization revenue guidance, capacity figures or capex details disclosed.
• Anthraquinone/carbazole full 5,300 MT capacity to commission together by Q4 FY 2026-2027 — phases combined to avoid a three-month shutdown in FY 2027-2028; FY 2027-2028 guided to see nine months of full operation at full capacity.
• Silicon carbon anode delivers 4,000+ mAh/g vs 360 for normal anode — a 10x improvement with far higher prices than synthetic anode; capex announcement at "advanced stage" but pending engineering completion (period unspecified).
• Ecosystem investments in the quarter — further investment in Sikona Battery Technologies, which completed acquisition of 100% of Advano (US) and secured AUD 45 million in funding from the Australian Renewable Energy Agency; wholly owned subsidiary Ardent Impex FZCO incorporated in Dubai Airport Free Zone for Middle East, Africa and Europe.

Management Pushes Back on Percentage-Margin Lens; Freight a Temporary Drag

• Percentage margins are "the wrong lens," per CMD Anurag Choudhary — quarterly EBITDA can print anywhere from ~20% (if raw material prices rise) to ~28% (if they fall), with 25-26% quarters also possible; the right metric is absolute margin per MT of Rs.20,000-25,000.
• Q2 FY 2026-2027 sequential dip of Rs.1,500-1,800/MT attributed to temporary factors — raw-material price increases not yet passed on under the one-month-lag model (to flow through in Q3 FY 2026-2027) and export share rising from 26% to 33% of sales amid elevated freight rates; management termed these temporary with no short-to-medium-term impact.
• Carbon black EBITDA at Rs.22,000/MT in Q2 FY 2026-2027 — sequential reduction of ~Rs.1,800/MT attributed to higher freight, not product challenges; management guided a Rs.20,000-Rs.24,000/MT band (period unspecified) as the macro range.
• Realizations should not be treated as a fixed base — management said if raw material prices fall 30-40%, realizations would also come down, and conversely could rise 30-40% if input costs increase; EBITDA per MT was up 17% in FY 2026-2027 (last year) versus the prior year, tracking a YoY uptrend over the last three years.
• Value-added product launches from FY 2027-2028 onward — management guided these should drive an upward trend in realizations; coal tar vs coal tar pitch spreads remained standard in Q2 FY 2026-2027.
• Raw material inventory moderated to 9-10 days — to manage price volatility; management recommended evaluating margins YoY rather than sequentially.

Rs.1,500 Cr Program Funded Entirely from Internal Accruals

• Rs.1,500 Cr capex spread over 2 years (FY 2026-2027 to FY 2027-2028) — CMD Anurag Choudhary confirmed it will be funded entirely through internal accruals; no specific peak-debt or leverage-ratio guidance was provided in the exchange with analyst Kruti Bhimani, who flagged net debt of ~Rs.500 Cr against Rs.1,600 Cr of capex and investments.
• Over Rs.400 Cr already invested in capex and investments in FY 2026-2027 — from internal accruals; existing debt is essentially working capital and is expected to come down over Q3-Q4 FY 2026-2027.
• Q2 FY 2026-2027 capex spend (till date) at ~Rs.250 Cr — CMD expects total FY 2026-2027 capex spend of Rs.800-900 Cr; all slide 15 projects (LFP, specialty chemicals, carbon nanotube) to have commercial dates before FY28, with full impact of most capacities visible from FY29 (FY 2028-2029).
• Net working capital improved sequentially to 37% of sales — from 41% in Q1 FY 2026-2027, though above the 31.3% of Q2 FY 2025-2026; management expects normalization over Q3-Q4 FY 2026-2027; debtor days nearly flat at 65 vs 63 in Q1.
• H1 FY 2026-2027 RoC at 30% — management wants to maintain this as the baseline for all projects at optimum capital capacity utilization; company to turn cash flow positive from operations on an annual basis in FY 2026-2027.
• All subsidiaries are 100% wholly owned — per CMD; no significant capital deployed into subsidiaries so far and no committed future capital amount disclosed (period unspecified).

Merger Progress, Mining Restart and 88% Carbon Black Utilization

• Birla Tyres merger proposed via demerger — of the tyre business from Dalmia Bharat Refractory Limited into Himadri, subject to statutory, regulatory, creditor and shareholder approvals; Birla Tyres was acquired in October 2023 with commercial production resumed on 29 May 2025.
• Birla Tyres Q2 FY 2026-2027 top line of Rs.140 Cr with Rs.1 Cr EBITDA — booked as trading margin under Dalmia Refractory Bharat Limited; to be added to Himadri's figures once consolidated; management on track for breakeven during FY 2026-2027 and maintains earlier top line guidance (period unspecified).
• Consolidated "other revenue from operations" of Rs.288 Cr for H1 FY 2026-2027 — (~Rs.144 Cr per quarter) confirmed to pertain to Birla Tyres.
• Mining environmental clearance received in October 2026 — operations shut in Q1 and Q2 FY 2026-2027 (negative EBITDA); mining to be operational in Q3 FY 2026-2027, bringing revenue and profitability upside; management targeting ~Rs.500 Cr annual top line from mining (period unspecified); sand mining in Bengal serves the construction industry.
• Carbon black capacity utilization at 88% in Q2 FY 2026-2027 — guided at similar 88-95% levels for Q3 FY 2026-2027; 70,000 MT capacity commissioned with Q2 volume growth of 14,000 MT, and underlying growth higher as external oil sales were deliberately reduced.
• Energex specialty carbon black grades approved — for high-voltage cable and battery applications, followed by commercial orders; NDAs signed with Indian and international customers across battery materials, CNT and super specialty carbon black.

Rs.1,100 Cr+ FY28 PAT Reaffirmed; IBC Clarified as Technology Partner

• Rs.1,100 Cr+ PAT guidance for FY28 (FY 2027-2028) maintained — management remains confident, supported by sustained core business performance and commissioning of new capacities.
• LSP materials capacity ramp targeted from FY 2029-2030 onwards — management is targeting 50%+ capacity utilization in the first year of operations and 90%+ from the next year (FY 2029-2030 and FY 2030-2031 respectively).
• IBC will not consume any of Himadri's material — management refuted the analyst's framing that IBC would take 100% of capacity; IBC is a technology partner providing technology and EPC contracts for companies setting up cell manufacturing in India and globally, under which Himadri's product automatically qualifies; beyond IBC, engagement with many customers and OEMs globally and in India.
• Cathode and anode pricing to be in line with Chinese suppliers — who currently dominate the cathode and anode market, per management.
• Geopolitical resilience stressed — on the West Asia crisis, CMD said volume growth signifies demand upside and the business model is "resilient to geopolitical situation"; Q2 volumes grew 3,000 MT YoY, with 1,000-1,500 MT further growth "not at all an issue" (period unspecified); pricing impact not quantified.
• DuraFresh performing very well — the CMD did not endorse the analyst's Rs.100 Cr EBITDA figure (period unspecified) but confirmed best-in-market purity levels and very positive consumer response.
• Sodium-ion and solid-state technologies in early work — the company is working on cathode and anode raw materials for these; capex to be announced when they mature (period unspecified); management stated all these technologies will coexist.