Incorporated in 1987, Himadri Speciality Chemical has evolved from a coal tar distillation player into an integrated specialty carbon and advanced materials company, with a diversified portfolio spanning coal tar pitch, carbon black, naphthalene derivatives, battery chemicals, and tyres, supported by an integrated feedstock-to-downstream value chain. According to Motilal Oswal, Himadri is diversifying into battery materials with LFP cathode and anode capacities, targeting 40,000 MTPA LFP by FY28. With the global LFP cathode and anode market expected to reach ~$193 billion by CY35, its ~$3 billion battery chemicals revenue ambition translates into a potential market share of ~2%.
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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has initiated coverage on Himadri Speciality Chemical Ltd. with a Buy rating, setting a target price of Rs 780, imply a potential uspide of up to 47% from the reports market price of Rs 531.
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The brokerage values the company at 30 times FY29E earnings per share (in line with its 10-year average one-year forward P/E of 30.6x).
Incorporated in 1987, Himadri Speciality Chemical has evolved from a coal tar distillation player into an integrated specialty carbon and advanced materials company, with a diversified portfolio spanning coal tar pitch, carbon black, naphthalene derivatives, battery chemicals, and tyres, supported by an integrated feedstock-to-downstream value chain.
According to Motilal Oswal, Himadri is diversifying into battery materials with LFP cathode and anode capacities, targeting 40,000 MTPA LFP by FY28. With the global LFP cathode and anode market expected to reach ~$193 billion by CY35, its ~$3 billion battery chemicals revenue ambition translates into a potential market share of ~2%.
The chemical company is moving up the carbon materials value chain through specialty carbon black, CNTs, SSCB, LCTP, and downstream chemicals, while Birla Tyres provides forward integration into tyre manufacturing.
The company also maintains a dominant position in CTP, with capacity to cater to 80% of domestic demand.
The company is expected to deliver a 24%/23%/21% compound annual growth rate in revenue/EBITDA/PAT over FY26–29, and currently trades at 29x/24x/20x FY27E/FY28E/FY29E EPS, with FY29E RoE/RoCE of 18%/15%.
Key risks:
Manufacturing operations face risks from unplanned shutdowns, equipment failures, utility disruptions, and dependence on third-party suppliers and coal tar are the key risks to the brokerage call.
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