HSCL - Himadri Special

📊 NSE: HSCL 🏢 Chemicals 📅 Last Updated: 12/13/2025 22:55

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue for Q2 FY26 was INR 1,070 Cr, a 5.7% decrease from INR 1,135 Cr in Q2 FY25, primarily due to raw material price corrections and export deferment. FY2025 total sales volume grew 16.1% to 5,52,206 MT from 4,75,582 MT in FY2024, driven by speciality oil sales.

Geographic Revenue Split

HSCL is a dominant domestic player in India for Coal Tar Pitch (CTP) and Carbon Black (CB). While specific regional percentages are not disclosed, the company is a net importer of raw materials but utilizes exports as a natural hedge for foreign exchange risk.

Profitability Margins

PAT for Q2 FY26 grew 39% YoY to INR 187 Cr. H1 FY26 PAT reached INR 369 Cr, the highest ever level. Profitability is strengthening due to a strategic shift toward high value-added speciality products and operational efficiencies despite soft top-line growth.

EBITDA Margin

H1 FY26 EBITDA stood at INR 477 Cr. EBITDA growth is driven by higher EBITDA/MT from speciality carbon black and speciality oils, which are less sensitive to raw material price fluctuations compared to commodity products.

Capital Expenditure

Planned capex includes INR 1,100 Cr for Phase 1 of Lithium-ion battery raw materials (40,000 MTPA), INR 220 Cr to expand speciality CB capacity to 1,30,000 MTPA by Q3 FY26, and INR 120 Cr for high value-added speciality products by Q2 FY27.

Credit Rating & Borrowing

HSCL holds an [ICRA]A1+ rating for its INR 100 Cr Commercial Paper. The company maintains a comfortable capital structure with a gearing of 0.1 times and TOL/TNW of 0.2 times as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Coal Tar (for CTP), Carbon Black Feedstock (CBFS), and Carbon Black Oil (CBO). CBFS is a crude oil derivative and is primarily imported.

Import Sources

CBFS is mainly imported from global markets, exposing the company to international crude price volatility and foreign exchange risks.

Key Suppliers

Not specifically named in the documents, but the company maintains established long-term relationships with both domestic and international suppliers.

Capacity Expansion

Current Coal Tar distillation capacity is 5,00,000 MTPA. Carbon Black capacity is 1,20,000 MTPA, with Speciality CB at 60,000 MTPA (expanding to 1,30,000 MTPA by Q3 FY26). Lithium-ion battery material capacity of 40,000 MTPA is planned for 2027.

Raw Material Costs

Raw material prices corrected in Q2 FY26, leading to a 5.7% drop in standalone revenue as costs are typically passed through to customers via formula-based pricing.

Manufacturing Efficiency

HSCL operates the largest integrated coal tar distillation facility in India, providing a significant scale-based competitive advantage and cost leadership.

📈 Strategic Growth

Expected Growth Rate

16-20%

Growth Strategy

Growth will be achieved by establishing a 40,000 MTPA Lithium-ion battery material plant (INR 1,100 Cr investment), doubling speciality carbon black capacity to 1,30,000 MTPA, and ramping up the recently acquired Birla Tyres (BTL) operations in the OHT, OTR, and EV segments.

Products & Services

Coal Tar Pitch (CTP), Carbon Black (CB), Speciality Carbon Black, Sodium Naphthalene Formaldehyde (SNF), Advanced Carbon Materials, and Tyres (via Birla Tyres).

Brand Portfolio

Himadri Speciality Chemical, Birla Tyres.

New Products/Services

Lithium-ion battery raw materials (LFP and Anode materials) and specialized tyres for the EV and Passenger Car Radial (PCR) segments.

Market Expansion

Expansion into the 'sunrise' Lithium-ion battery sector and forward integration into the tyre manufacturing market through the acquisition of Birla Tyres.

Market Share & Ranking

HSCL is the largest coal tar distiller in India and holds a leading market position in domestic CTP and CB businesses.

Strategic Alliances

Acquired Birla Tyres Limited (BTL) in October 2023 in partnership with Dalmia Bharat Refractories Limited (DBRL).

🌍 External Factors

Industry Trends

The industry is shifting toward speciality chemicals and battery materials for EVs. HSCL is positioning itself as a key supplier for the global Lithium-ion battery supply chain to capture this growth.

Competitive Landscape

Faces stiff competition in the tyre manufacturing business and commodity carbon black, but maintains a dominant position in speciality carbon and CTP.

Competitive Moat

HSCL's moat is built on being the largest integrated player in India with deep backward integration. This cost leadership is sustainable due to the high capital intensity and technical expertise required for coal tar distillation.

Macro Economic Sensitivity

Highly sensitive to the business cycles of the aluminium and graphite electrode industries, which account for over 45% of sales volume.

Consumer Behavior

Increasing demand for EVs is driving the strategic shift toward battery materials and specialized EV tyres.

Geopolitical Risks

Trade barriers or shipping delays can impact the import of CBFS and the timing of export shipments, as evidenced by sales deferments in Q2 FY26.

⚖️ Regulatory & Governance

Industry Regulations

Subject to environmental, health, and safety (EHS) norms. Non-compliance could lead to protests or constraints on capacity expansion.

Environmental Compliance

The chemical industry faces tightening regulatory norms for production and disposal. HSCL has a track record of safe operations with no reported lapses in recent years.

Legal Contingencies

The company faces inherent litigation risks associated with chemical accidents (low frequency-high impact), though no specific pending case values are disclosed.

⚠️ Risk Analysis

Key Uncertainties

Project execution risk for the INR 1,100 Cr battery material project and the ability to turn Birla Tyres profitable are the primary uncertainties, with a potential 10-20% impact on consolidated profitability.