Himadri Speciality Chemical plans to grow its profit to over ₹1,100 crore by FY28, up from ₹750 crore in FY26. The company is pivoting toward high-margin EV battery materials, backed by a ₹2,000-crore investment funded through internal cash. Investors are focusing on its ability to execute large projects while navigating the fast-changing battery technology sector.
Himadri Speciality Chemical has announced a strategic goal to boost its profit after tax to more than ₹1,100 crore by the financial year 2028. This target follows a strong performance in FY26, where the company reported a net profit of approximately ₹750 crore. To reach this new milestone, the company is moving away from its traditional commodity chemical business and shifting its focus toward high-margin advanced materials, particularly for the electric vehicle (EV) and energy storage sectors.
Strategic Expansion and Funding
To support this growth, the company has planned a ₹2,000-crore investment program. A key point for investors is that the company intends to fund this massive expansion through its own internal cash flows rather than taking on large amounts of debt. This approach aims to keep the company's financial health stable. Recent data supports this focus on liquidity, with the company successfully repaying ₹150 crore in commercial paper obligations earlier this month, signaling a commitment to reducing debt pressure.
Pivoting to EV Materials
The core of this transformation lies in the EV battery supply chain. Himadri is setting up a new facility for carbon nanotubes with a ₹70-crore investment, catering to demand in sectors like semiconductors and advanced batteries. Additionally, the company is retrofitting existing infrastructure with a ₹170-crore outlay to focus on high-end production.
Perhaps most notably, the company is betting big on lithium iron phosphate (LFP) cathode materials. It is moving toward an ambitious 40,000-tonne-per-annum facility, supported by an investment of ₹1,125 crore. Production for these materials is expected to begin in the third quarter of fiscal year 2027. This move follows a strong start to the current year, with the company’s consolidated net profit growing by approximately 27% year-on-year to ₹228 crore in the first quarter of FY27.
Operational Risks and Outlook
While the company’s plans are ambitious, investors should also consider the inherent risks in this sector. Large-scale projects in the battery material space carry execution risks, meaning delays or cost increases are possible. Furthermore, the battery technology landscape changes rapidly, and there is a risk that specific chemistries could become outdated faster than expected. The company also faces exposure to cyclical industries, such as aluminium, and will need to manage intense competition from global players.
Additionally, the company is working to improve its tyre division by focusing on higher-margin off-the-road tyres rather than standard truck tyres. Going forward, the primary monitorables for investors will be the timely commissioning of these new battery material plants and the company’s ability to maintain healthy profit margins as it scales up its new product lines.