ICICI Securities has increased its target price for Himadri Speciality Chemical to ₹720, up from ₹550, while maintaining a hold rating. The brokerage adjustment reflects the company's progress in battery chemicals and its move into high-value products like carbon nanotubes. Investors may track the commissioning of its new 2ktpa LFP facility, which is expected by the third quarter of fiscal year 2027.
ICICI Securities has updated its outlook on Himadri Speciality Chemical, raising its target price to ₹720 from the previous ₹550. This change follows the company’s ongoing efforts to expand its presence in specialized chemical segments and move toward higher-value products. While the brokerage maintains a hold recommendation, the revision signals an adjustment in how the market may value the company’s evolving business model.
Expanding Portfolio and Battery Chemicals
Himadri is actively moving beyond its traditional business by investing in newer areas such as carbon nanotubes and super-specialty carbon black. These products are intended to cater to specialized industrial needs. Simultaneously, the company is preparing for its entry into the battery chemicals space. It has already set up a pilot plant for anode materials and is working toward necessary product approvals. A key update for investors to follow is the commissioning of a 2ktpa lithium iron phosphate (LFP) facility, which is planned for the third quarter of fiscal year 2027. This facility is seen as a stepping stone toward its larger goal of building 40ktpa capacity for phase-1 of its battery material production by fiscal year 2028.
Core Business and Strategic Positioning
The company’s foundation remains its coal tar distillation business. By integrating backward, Himadri can process various feedstocks, which helps in managing raw material efficiency. This operational setup has been a long-standing component of its business model, allowing it to maintain a degree of flexibility in its production processes. Recent capital spending has also been directed toward projects involving anthraquinone and carbazole, aiming to diversify its revenue streams.
Valuation and Financial Context
In its analysis, ICICI Securities adjusted the valuation multiples used for the company. The core chemical business is now being valued at 20 times its enterprise value to EBITDA ratio, up from the previous 15 times, as the brokerage recognizes the potential for higher-value products to contribute to future earnings. Similarly, the battery chemical segment’s valuation has been revised to 5 times its enterprise value to invested capital, up from 3 times. These changes reflect the approaching commercialization stage of the company's new projects. While these valuation shifts suggest a more positive outlook on future earnings potential, investors should remain mindful that the ultimate performance will depend on the successful commissioning of these projects and the actual demand for the new product lines. The primary monitorable for shareholders will be the progress on the LFP facility and the pace of product approvals required for the full-scale launch of its battery material business.