China+1 Opens Rs 30,000 Crore Opportunity: Six Growth Drivers Powering Himadri's Business

China's dominance in lithium iron phosphate (LFP) battery materials has created an opening for companies seeking to build alternative supply chains. Himadri Specialty Chemical is positioning itself to benefit from that shift by building an integrated lithium-ion materials business that management says could generate revenue of about Rs 30,000 crore over the next five to six years.

The company is also expanding its speciality carbon products, advanced chemicals and tyre business as part of a broader investment plan. It has outlined capital expenditure of about Rs 2,000 crore in the near term and Rs 4,800 crore over the next five to six years.

The expansion reflects Himadri's strategy of moving into higher-value products while building capacity in businesses linked to electric vehicles, energy storage and speciality chemicals. Alongside its existing carbon materials operations, the company expects battery materials, speciality products and Birla Tyres to become key contributors to earnings over the medium term.

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Existing Business

Himadri Specialty Chemical operates an integrated carbon complex and manufactures carbon black, speciality carbon black, naphthalene and lithium-ion battery materials, including anodes and LFP cathodes.

The company entered tyre manufacturing after acquiring Birla Tyres, producing agricultural, commercial and mining tyres. Its products serve industries including electric vehicles, energy storage, aluminium, paints, plastics, agrochemicals, defence and construction.

Carbon materials and chemicals accounted for 99.6% of FY26 revenue, while India contributed 69% of total revenue.

In the first quarter of FY27, revenue rose 28% year on year to Rs 1,432 crore. EBITDA increased 33% to Rs 313 crore and the EBITDA margin stood at 22%. Net profit grew 27% to Rs 228 crore.

Management attributed the performance to a higher contribution from value-added products, cost optimisation and the consolidation of Birla Tyres. The company aims to increase net profit from Rs 555 crore in FY25 to Rs 1,100 crore by FY28 while maintaining return on capital employed above 30% despite planned capacity additions.

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Battery Push

The company's largest expansion project is its commercial-scale LFP cathode material business.

LFP batteries are increasingly used in electric vehicles and energy storage systems because they offer improved thermal stability, longer operating life and lower costs than nickel manganese cobalt batteries.

Management said the facility would be the first commercial LFP cathode plant outside China and is intended to address growing demand as global manufacturers diversify supply chains under the China+1 strategy.

The company plans to commission an initial 2,000 MTPA commercial-grade facility in the third quarter of FY27. Capacity is expected to increase to 40,000 MTPA by FY28 and to 200,000 MTPA over the following five to six years.

At full capacity, Himadri aims to secure a 2% to 3% share of the global LFP market.

Management said the company intends to match Chinese pricing through cost efficiencies and an India-based sourcing and manufacturing ecosystem.

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Customer Pipeline

Management said the company has secured global approval for its "Sample A" product. Trials and distribution of "Sample B" will begin after the first commercial facility becomes operational.

According to management, customer approvals up to "Sample D" are expected to be completed before the 40,000 MTPA plant starts production.

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Material Platform

Himadri is also expanding into synthetic anodes and silicon-carbon materials as part of a broader lithium-ion battery materials platform.

The company has partnered with and invested in US-based International Battery Company. Management said IBC is integrating Himadri's LFP materials into its commercial prismatic battery cells and is building a 7 GWh manufacturing plant in India, which is expected to begin operations in the fourth quarter of FY27.

Himadri commissioned a 200 MTPA commercial synthetic anode facility at Mahishtikari in April 2026. Management expects the unit to generate revenue of about Rs 120 crore to Rs 130 crore and plans further expansion after customer approvals are completed.

Through its investment in Sicona, the company is also developing silicon-carbon anode technology. Management said the technology offers more than 20% higher energy density and over 40% faster charging, with a pilot plant expected in the fourth quarter of FY27.

Management expects the lithium-ion materials portfolio to support 100 GWh of battery demand and generate about Rs 30,000 crore in revenue over the next five to six years.

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Carbon Expansion

Outside battery materials, Himadri is increasing its presence in speciality carbon products used in lithium batteries, engineered plastics, conductive materials and coatings.

The company plans to invest Rs 170 crore to convert 6,000 MTPA of commodity capacity into super speciality carbon black. Production is targeted to begin in FY28.

Management expects the investment to generate an asset turnover ratio of about three times, translating into revenue of around Rs 500 crore.

Himadri is also establishing a 200 MTPA carbon nanotube facility, scheduled for commissioning in the fourth quarter of FY27. Management estimates revenue potential of Rs 50 crore to Rs 70 crore from the project.

Chemical Plans

The company is expanding into speciality chemicals such as anthraquinone and carbazole, which are used in pharmaceuticals, agrochemicals, dyes and organic electronics.

It plans to build total capacity of 5,300 MTPA by FY28. The first phase of 2,600 MTPA is expected to be commissioned in the second quarter of FY27, followed by the remaining capacity in the second quarter of FY28.

Management expects the business to generate revenue of Rs 250 crore to Rs 300 crore while reducing India's dependence on imports.

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Tyre Revival

Himadri also expects Birla Tyres to become a larger contributor to revenue.

Management said backward integration into speciality carbon black is expected to reduce raw material costs and improve margins.

The company is shifting its product mix towards off-the-road tyres and developing more than 400 new stock-keeping units. It also plans to enter the electric vehicle and SUV tyre segments by commissioning a passenger car radial plant by FY28.

Management expects Birla Tyres to achieve EBITDA breakeven and become cash positive in FY27, with revenue reaching about Rs 3,000 crore over the next four to five years.

Valuation

At Rs 798 a share, Himadri trades at a trailing 12-month price-to-earnings multiple of about 50 times, compared with its five-year median of 37.7 times and PCBL Chemicals at about 58 times.

The valuation reflects expectations that the company will expand its presence in advanced materials. Execution of capacity additions, customer approvals and pricing pressure from Chinese manufacturers remain key risks to achieving the projected earnings growth.

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