Himadri Speciality Chemical Limited (HSCL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Himadri Specialty Chemical Ltd. Q1 FY27 Conference Call, hosted by MBFG. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal and operate the web pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Chirag Bhatia from MUFG. Thank you, and over to you, sir.

Thank you, Nishia. Good evening, everyone, and welcome to Q1FI27 on the conference call of Himadri Specialty Chemicals Limited. Today, on the call, we have with us Mr. Angraaf Chaudhary, CMB and CEO, Mr. Somesh Ratnalika, EBP, Tire and Strategy, and Mr. Kamli Chagrawal, CFO. Before we proceed with the call, I would like to give you a disclaimer that this conference call may contain forward-looking statements about the company which are based on beliefs, opinions, and expectations as of today. Actual results may differ materially. The statements are not the guarantee of the future performance and involve the risks and uncertainties that are difficult to predict. A detailed safe marbles statement is being given on page two of the investor presentation of the company, which have been uploaded on Stock Exchange and on the company website. With this, I now hand over the call to Mr. Anurag Thrabi. Over to you, sir.

Thank you, sir. Good evening, everyone, and a very warm welcome to the Q1F27 earnings conference call of Himadri Specialty Chemical Limited. Thank you for joining us today. We look forward to taking you through our performance for the quarter ended 30th June 2026, the progress across our strategic priorities, and how we see the road ahead. Those who have followed our journey over the past few years will recognize that Himadri today has transformed into a different company from where it started. We began as a Korta derivative company, and today we operate as a global advanced materials and application-driven solution organization. We are positioned at the intersection of material science, energy transition, and high-performance applications. At the core of this transformation lies the simple belief. The companies that will lead the future are those that can continuously reload themselves, execute, reinvest, scale, and repeat this cycle with discipline. This philosophy guides everything that we do. Over three decades, we have laid foundation, and today, we are building a future facing both platforms for the energy transition economy, focusing on capturing a global opportunity backed with innovation-led growth. Now, let me briefly touch upon the financial picture for the quarter. On a consolidated basis, revenues stood at Rs. 1432. Of course, EBITDA was at... 313 crores with a margin of 22% and profit after tax was Rs.228 crores reflecting a path margin of 16%. This performance reflects both strong operational discipline and the continued shift in our product list toward higher value segments. Yesterday, we announced two important initiatives that further strengthen our innovation-led growth trajectory. First, we successfully developed indigenous carbon nanocube technology through our relentless in-house innovation and research and development, marking another milestone in our innovation journey. Backed by a planned capex of approximately 70 crores, our upcoming 200 metric tons per annum CNT manufacturing facility, targeted for commissioning in Q4 FY27, is expected to position Himadri among a select group of few global manufacturers serving this high growth market. CNT is a next generation material with application spanning across lithium-ion batteries, semiconductors, electronics, sensors, polymers, coatings, aerospace, etc. With demand accelerating across these industries, we believe CNT represents a significant long-term growth opportunity for the company. The second initiative is our entry into super speciality carbon black. This is a structurally different high purity segment designed for high performance in highly specialized markets like lithium-ion batteries, engineered plastics, fabrics, fibers, coating, conductive black, and other niche applications delivering premium realizations. We are converting 6,000 mt per annum of existing capacity with a capacity of Rs. 170 crores. This is a classic example of our compounding philosophy, leveraging the same integrated feedstock base and new infrastructure to produce significantly high-value-added products. This enhances margins, deepens application reach, and strengthens our positioning in global specialty markets. Let me now turn to what will define the next phase of Himadri's journey. New energy materials. Global lithium-ion battery demand is projected to rise from around 1.6 TWh in 2025 to nearly 6.8 TWh by 2035. We are positioning ourselves for this opportunity with a fully integrated complex. On this site, we have commissioned our 200 mt per annum anode material facility at Mississippi in April 2026. This capability is built entirely on overall decade of in-house research. The facility has been specifically designed with feedstock flexibility enabling the use of in-house developed special engineered pitch. This backward integration gives us scalability, cost efficiency, and resilience within a self-reliant value chain. We are building capabilities in lithium-ion phosphate, LFP cathode chemistry, which is fast-emerging as the preferred solution for mass-market EVs and energy storage. Our initial 2,000 mt per capacity is expected to be commissioned in Q3 FY27, representing the first milestone under phase 1 of 40,000 mt per annum expansion plan, which form part of our broader long-term vision to scale capacity to 200,000 mt per annum. What differentiates us is our integration from feedstock to materials. We are working towards building a self-reliant Thank you. What differentiates us is our integration from free stock to materials. We are working towards building a self-reliant, scalable platform aligned with global demand and national priorities. We continue to strengthen our strategic investments in better material ecosystems. Sikona in which Himadri, the strategic investor, secured Australian 45 million funding to accelerate its next generation silicon carbon anode technology commercialization. Additionally, we have increased our stake in international battery company, reaffirming our confidence across battery value chain, from materials to validation and deployment. Now coming to Villa Tyres. Villa Tyres turnaround continues to make steady progress. Since commencing commercial operation on 29th of May, 2025, the focus has been on rebuilding the business on a strong operational and technological foundation. Alongside recommissioning the plant, significant efforts are underway to modernize manufacturing infrastructure, upgrade equipment, and incorporate state-of-the-art automation across operations, thereby bringing Thank you. This transition, along with modernization initiative, will be supported by additional capital expenditure and expected to be executed over the next three years, creating a stronger platform for long-term growth and profitability. As of today, the distribution network spans 49 distributors and over 1,000 dealers. Villa Kaya has been strengthening its portfolio across agriculture, mining, and commercial segments, with the launch of STUs across three new agriculture products lines during the quarter, AgriBin, AgriPlus, and AgriLib T40. This momentum is supported by a strong product development pipeline. With over 400 new STUs under development across segments, Villa Tire's next strategic milestone is the commissioning of passenger car radial facility by FY28, paving the way for its planned entry into EV and SUV tire segments. In Specialty Carbon Black, we continue to build on our technology advantage. With 250,000 metric tonne capacity, including 130,000 tonne of Specialty Carbon Black capacity, we operate across a product portfolio of more than 70 specialty grades. Our integration from feedstock to finer formulation gives us control over quality, cost, and consistency. Our approach remains lab-first, planned later, and ensures that capacity expansion is always backed by validated applications. Our Kohata pitch business continues to anchor the company. We operate the world's largest single location fully integrated carbon complex with 600,000 mt of Kohata distillation capacity. Our domestic market share continues to be over 65% and the commissioning of liquid Kohata pitch terminal at Haldia and Mangalore has strengthened our ability to serve global markets. Our forward integration into anthocinone and carbazole with a total capacity of 5300 mt is progressing well with first commissioning targeted by FY28. Initially, phase capacity of 2600 is set to commission in Q2 FY27 and balance capacity of 2700 mt is to be added in Q2 FY28. This facility will be India's first commercial plant for its kind. Reducing import dependence and unlocking the export-led growth, a right move towards Atmanirbhar Bharat. Let me now briefly explain how we are structuring our existing business. Our model has been three clear layers. At the core lies our KOLTA derivatives, Carbon Black, Naphthalene, and Oil of various grades, providing scale and feedstock security. Secondly, our specialty offering consists of products. Specialty Carbon Black, Super Specialty Carbon Black, CNT, Miss Engineering Grades of Colta Pitch, SNF, TCE, Specialty Chemicals such as Anthraquinone and Carbazole which provide us customers' thickness and greater value realization. And the third is new energy materials, anode and LFP cathode active material, and silicon carbon technology placing us at the very heart of global energy transition value chain. What this structure allows us is to grow on earnings faster than revenue as we focus on value-accredited businesses. Across all business initiatives, our capital allocations remain disciplined. The CapEx program is thoughtfully structured to balance scale with efficiency. It is entirely self-funded and deliberately calibrated between brownfield expansions, which enhance asset productivity and greenfield investments, where we are building new capabilities from the ground up. This approach allows us to pursue growth while maintaining balance sheet strength and capital discipline. Sustainability remains deeply embedded in our business model and operational philosophy. All our plants operate on a zero-liquid discharge basis, reflecting our commitment to responsible manufacturing, resource efficiency, and economical stewardship. These efforts continue to gain recognition. The reaffirmation of our eco-verdice platinum rating continues to place Himadri among the top 1% of the companies globally. Assessed by Ecovandis. Increasingly, such credentials are not merely accolades, but important commercial prerequisites in global value chain. Our commitment to sustainable and responsible growth was further recognized during the quarter through several prestigious awards that belong to the entire Himadiri family. Our approach is very clear. We are diversifying to build resilience. We are shifting our product portfolio next to drive profitability and we are executing things while maintaining balanced discipline. We are building a strong foundation that allows us to scale transformational growth while preserving financial discipline and transparency. I am confident that this combination of scale, integration, innovation, discipline will continue to deliver substantial value for all our stakeholders. With that, let me hand over to our Chief Financial Officer, Mr. Kamlesh Agarwal, who will now take you through the financial performance for the quarter in greater detail. Thank you very much.

And thank you for joining us today. I trust that everyone has had a chance to review our financial results and the latest investor presentation which have been made available on both the stock exchanges and our company's website. Let me begin with the key financial highlights of the quarter. Our consolidated revenue for the quarter stood at Rs. 1432 crores as compared to Rs. 1118 crores a year ago, an increase of 28%. Our EBITDA stood at Rs.313 crore as compared to 235 crore a year ago with an increase of 33% and margin of 22%. Our profit after tax has significantly increased to Rs.228 crore from Rs.179 crore a year ago, a jump of 27% with margin of 16%. Our standalone revenue for the quarter stood at Rs. 1,274 crores as compared to 1,100 crores a year ago, an increase of 16%. Our EBITDA stood at Rs. 301 crores as compared to Rs. 234 crores a year ago with a growth rate of 29% and margin of 24%. Profit after tax has significantly increased to Rs 223 crores from Rs 183 crores a year ago, a jump of 22% with margin of 18%. We remain committed to delivering strong value through our strategic priorities and operational rigor. Thank you once again for your continued support and engagement. Thank you.

Yes, now you can open the floor for the question and answer session.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjeej Jain from ICICI Securities. Please go ahead.

Yeah, thanks. Thanks, Anuradhyay. Good afternoon, Kamleshri. Thank you. Good afternoon. Thank you. I've got a couple of questions. First, a numerical question. Let me finish that. On the other segment, the EBIT has fallen from 25 crore last quarter to around 1 crore this quarter. What has changed? Because revenue number hasn't changed much. Why there is such a sharp swing in the EBIT margin for the other segment?

So, other segment last time consists of mining profit which this quarter didn't took place. That was the reason of fall.

So, what explains less change in revenue in that? So, what is compensation?

So, this quarter we did not operate the mines. We are waiting for some licensing to happen. Coach that the mining operation will start. That was the reason.

Okay, but it is not showing up in revenue. That means something else has picked up.

No, revenue because the villa-taya revenue has gone up. Last quarter, if you see, the villa-taya revenue was significantly low. And with the ramping up of capacity in villa-taya, the revenue is going up. So, that's the reason you don't find change in revenue, but you find change in the profitability.

Clear, clear. Now, coming to the new capexes that we have announced, which is the carbon nanotube and the super speciality carbon pack. In nanotube, what is an approach? This will address India market, global market. What is the key application you did set energy and semiconductor? But whom are we competing here and how have we benchmarked the product now that we are commercializing it? We would have done all that, right? So how should we see this segment and what is the differential in the realization versus a speciality carbon black and carbon nanotube? That's one. Number two. We got the super speciality carbon black. What really is this? Because carbon nanotube, I can still understand. But when we say super speciality carbon black, what really are we trying to do here? So these are the two on this question.

Thank you, Sanjay. So first of all, coming to carbon nanotube. Carbon nanotube is a unique product where graphene is rolled into seamless cylinder that forms carbon nanotube. So it's nothing but graphene. Which we have developed through relentless R&D efforts of many, many years. If you look at the entire supply chain platform globally, there are only few companies in the world who are doing this, and we're the first in India. And if you look at the product, to make it very simple, it is 100 times the strength of steam with the conductivity of copper. That's the game changer. Strength of steel and conductivity of copper and very light material. So this opens the entire huge arena of application. Right from lithium-ion batteries, to semiconductors, to conductive film sensors, to industrial coatings, to lightweight, high strength material for aerospace and automotive, means every day the users are improving and increasing. So that places Himagri in a unique position because the in-house technology we have developed and now we are putting it into scale. So this is the first step with 200 metric tons. We will stabilize the product, set up the facility, get customers in place globally. So today, the market is very less in India. It's a global plane. So we'll be supplying to the global players. And this is a very high value added product and with significant value over the existing products. Now coming to super speciality carbon bag. So, you know, I've been talking about the value-added products, the journey, and it's a journey. It's, you know, every time you keep on working on it, you keep on developing, and you go one step up the ladder. So we started with very low end of a speciality carbon bag. Just marginal in terms of specialty carbon black. Then we are moving ahead. We are going up the ladder with the new specialty carbon black line coming up. We have moved up the ladder. Now the aspiration. So I have been always talking about high value niche market for specialty carbon black, which is not a very, very huge market, but it's a very, very prime and tailor-made specialty, super specialty market. Where the value-addition is multi-fold of the existing speciality. So in terms of value-addition, you cannot compare the two products. That's why you are seeing at only 6,000 metric. But the value-addition will be very, very high. So this is the product we are targeting now. And we have given F.28 as when we start the capacity. And this will be a very big game-changer for the company going into a very, very niche market, high-valued market with a very strong ROC.

My question is that we just started a speciality plant. Why did we do that? We could have straight went into manufacturing this in which ways we are converting the old plant, right? No, no, we are not converting the speciality plant. We are converting the commodity plant.

Okay, yeah, yeah. Rubber, rubber, rubber side of the... Right, right, right. And it's really why we went and... See, you cannot leave one market and focus on one market. See, the players buy speciality, they buy super speciality. So you have to have the entire portfolio in your basket. It's not that I'll sell you only the best product, high margin product, others you buy from others. That never works. So for that you have to have the entire portfolio with that. Speciality is the stepping stone to go towards super-speciality. That's why we have to strengthen our position, make us very strong in specialty, that gives the confidence to the customers that they have the ability. So if you are not doing specialty, tell your super-speciality, first question will, first you do specialty, then we talk about super-speciality. That's it.

No, no, but I just want to understand, like, conductive grade, it helps in improving the conductivity in the material. What property does this super speciality adding in, say, engineering, plastic, and EV, what really characteristic is this adding there?

See, because of competitive nature, I don't want to disclose all these technical details on a con call. So, we have clearly articulated which application is this, and I don't want to go into technical details of the subject.

No, no, no, that's fair, that's fair enough. Second, what is the market size of, say, carbon nanotube globally and a super speciality?

So if you look at the carbon nanotube, it's evolving market. Today it is around 30,000 metric ton, which is growing every year. And what is happening, this product is getting more and more applications and user industry. So it's a new product, new technology, which is working now. And over the years, you will find the users. Multiplying, the growth will be phenomenal. So this is a growing industry, new age industry, advanced material industry. Coming to super speciality, the market is around 300,000 metric ton.

No, no, not. Super speciality is 300,000. I thought speciality is even... Speciality is very high.

Speciality runs into millions. So, more than millions means. That's our normal market.

Got it. Now, coming to our battery material, so we are getting into anode, LFP right now, and then silicon probably soon. Now, I want to understand LFP market. What is the size of the market today in China? How many players are there in this segment? And how are we approaching this segment?

So, if you look at the LFP market, today 100% global capacity of LFP rests in China and is mainly dominated by top five to six players in China. They are the leaders with 75 to 80% of the capacity. Globally, there is no other company manufacturing LFP as of now on a commercial basis. So, entire capacity rests with China. And market, if you look at today, we are at 1.5, 1.6 TWH. And in that, you can say probably 50% is LFP. And if you look at 50% LFP, that brings you to 800 gigawatt hour. 800 gigawatt hour, that will consume around 1.6 million ton of LFP. As of now, with the growing market, it is supposed to grow to 6 plus megawatt hour by 2035, and majority, 70% of the growth is coming in LFP. So looking forward, the demand for this product is going to be big.

Got it, got it. And what we are adding or aspiring to add 200,000, that's like we are talking of having a 10% market share of today's market. Correct? That's how we are approaching it.

That's not the right way of looking at it, because 200,000 we are projecting in next five to six years. So by that time, the market will definitely change from what it is today. So actually we are targeting at two to three percent, which is hardly anything.

Got it, got it. No, no, if I want to look at the same economics in anode, because I think there are some other players in India also who have announced anode capacity. How are we different? Again, what is the demand in the world? What is the contribution of China?

So, if you look at the anode chemistry, so unlike LFP, every lithium-ion cell needs anode. In the cathode material, there are different chemistries. There is NMC, CLO, LFP, various chemistries. But for anode, everyone needs anode. So on a macro basis, 1600 gigawatt need 1.6 million ton of anode. So anodes are of different types, synthetic anode and natural graphite anode. So, if you look at 70% of the market is synthetic because of high capacity, stability, quality, sustainability, this product is there. What makes Himadri unique is that, see, it's not that everyone is talking about lithium ion, so Himadri has also started talking about lithium ion. This has been our vision since last more than 10-12 years. We have worked very hard on this to make it happen. An extensive amount has been invested in terms of research and development capabilities and innovation. We have spent, if you look at the last year's balance sheet only, 125 plus crore, we have spent 2.6% of our top line. Currently here also, we are spending in the same fashion. Over the years, we have spent this money on R&D, in different products, and we know the chemistry in and out. We have worked on it for years. We were the first company in the world to supply the precursor from pitch to the huzu of anode in China. Like, I don't want to deliver any top five players in China. Before China could make ultra-based. The precursors, we made it and we supplied to them. So, we are very seasoned in this industry and strongly positioned and only company who is talking of anode metal backward integrated. So, we have our own raw material. In addition to that, we have flexibility of using other raw materials. So, this brings Himadri in a unique platform. Other than that, we are working on natural geophyte. We will also set up capacity for that. We will set up capacity for silicon carbon. This, again, brings Himadri into a unique position where we will meet the aspiring and need of our customers, not only through synthetic, but through natural silicon carbon hybrid. So, I was talking about the strength and USP of Himadri. We are going to set up a plant for synthetic natural and silicon carbon that puts Himadri into a unique positioning where we can supply hybrid material to our customers depending on their requirement. Thank you, everyone.

Hello? Yes, I'm just... Yes, sir, can you hear me? Yeah, I can hear you, please. Sorry, I have no word. No, I think they mute me because they were trying to connect you. But no, no, no, you can hear me. Thank you. That's perfectly clear. I think. So now we have started 200 metric ton of pilot plant in last one quarter. What has been the response? How many samples we have spent? And what is the discussion with the client we are having? If you can give us some color, that will be really helpful.

Definitely. So what happens from the pilot plant, we were allowed to give sample A. There are four stages, sample A, B, C, D. So now we have supplied sample B to many customers globally and in India. To all the customers in India and many customers, OEMs and manufacturers globally. So once we have the response for sample B, then we go for sample C.

I am trying to understand how long this approval process goes. This process takes one and a half years to two years. Oh, so this entire process for us will take almost one and a half to two years. So for us to get into...

No, we have already advanced the process. So for us, it will take competitive... So by the time we have our planned in operation, we will have the approvals in place.

So when are we looking? What would be the potential timeline? I know you haven't disclosed that. Yeah, that's the reason I cannot disclose. Oh, that's fine. We will wait for it. But you are telling generally it's a very long-run process in terms of taking approval, correct?

That's the reason we have started sampling from a commercial grade 200 metric plan. So that brings us in the front foot for getting approvals.

Sorry to interrupt you, sir. You may rejoin the queue for a follow-up question. The next question is from the line of Deepak Podar from Sapphire Capital. Please go ahead.

I have an audible, sir. Yeah, you are audible, please.

Yeah, I just wanted to understand on the anode side, what's the KPEX amount?

So, we have already spent 120 quarts.

And how much more to spend here?

How much?

I mean, how much more? I mean, is this 120 crores the total amount?

There is no more capex we have announced now. Once we formulate our plan for a bigger capacity, we will come up with public disclosure for the investment.

Okay, okay, okay. I got it. And LFP phase 1, what's the timeline for commissioning? 2-3 FY27. So that's only 2,000 metric done, right? So I was talking about phase 1, 40,000. That will be operational FI-28. So that will come in FI-28.

Right, right, right.

And for this 40,000, we are spending around 1,125 crores, right? Right, right, right. Okay. And on this five capex that we are doing in CNT, SSCB, anode, LFP, cathode, and carboazole and traquinone. So do we have any kind of understanding? So what can be the revenue potential from each of this segment and optimum utilization? So that gives us some pictures, I mean, in terms of the overall revenue potential of your new age capex that we are doing here.

See, 40,000 tons as per the today's value will give you a, LFP will give you a 3,000 crore top line. For Anthraquinone Carbazole, depending on the value, it can give you anything between 250 to 300 crore of top line. Then the super speciality carbon black, depending on, again, which segment we are targeting, this will be also 3x of our investment, capital investment, 3 times asset ratio.

3 times asset ratio, that effectively means around 500 crores, right? 500 crores, right. Okay. And what about C&T?

C&T is just a small capacity, 200 metric crores, so it will not be substantial. So in the next phase, when we scale up, then the real revenue will come.

Small in the sense of what, I mean, 50-100 crores?

Yeah, in that kind of, not 100, less than 100.

Okay, 52-70 crores round about, and the last thing is anode, yeah.

So, anode, we have not announced any capital investment in terms of bigger capacity. So, this is a plant for approvals.

But this 200 metric ton, so what is the revenue potential of this 200 metric ton? So this gives us some understanding, I mean, yeah.

So revenue potential for 200 metric ton may be 120, 30 crores. 120, 30 crores.

Okay, okay. I got it. I got it. In terms of, are we also in future have any strategy or planning towards going towards the cell manufacturing or something on those lines, the battery cell manufacturing? So do we have that plan as well or anything on both? Not at all.

We are a raw metal component company focused on this for last many, many years. We want to continue in this direction for cell manufacturing. We have invested in IBC. Idea is not to go for cell manufacturing. Idea is to have a commercial play in terms of our product being displayed commercially by the cell manufacturing company IBC. So today, Madhvi product is no longer a laboratory product. It's a product which is commercially used in cells manufactured by IBC.

Understood. And this 1,100 crore's bottom line by FI 28 remains intact that I think we have earlier mentioned, right? Definitely. And anything on FI 27, any outlook, I think you have not shared.

We don't give quarter and year guidelines, never.

Fair enough. So that would be it from my side. I would like to wish you all the best. Thank you so much.

Thank you. The next question is from the line of Ranveer Singh from Nuwama Wealth. Please go ahead.

Thank you for taking my question. I think two of my questions are going to be on fire. Just to elaborate a little bit on cathode material plan. So, 40,000 metric 10 by FY28, and 2 lakh metric 10 is our ultimate target in the next five years. I think by 30, 31, we are planning this 2 lakh metric 10 would be rolled up.

Right, right, in five years from now, right.

And normally, what kind of capex is required to float this kind of capacity?

So we have already announced for 200,000, 4,800 tours of capex.

Okay. And when we talk 2 lakh bethicton, what would be the market share at that time, if you have any, you know, what kind of analysis would be helpful in terms of...

Thank you.

Sorry?

Two to three percent of the global LFP market.

So two to three percent. Okay. Okay. Fine. And here in the base business, in coal power business, what is the capacity utilization of the existing capacity? And plus what we have expanded 70,000 meter terms. So what will be the capacity utilization currently? In both segments?

80% capacity utilization. Looking forward during the year, we will be at 90% plus.

Taking it together or separately for a new capacity?

Together, together, together.

Okay. Okay, that's it from my side. Thanks.

Thank you. The next question is from the line of Sagar Jaitwani from Philips Capital, PMS. Please go ahead.

Yeah, congratulations on a good show. Is my voice audible?

Yes, yes, please. Thank you so much. Continue.

Yeah, yeah. So, in terms of the LFP cathode again, you know, how are we competing with the Chinese players? Can you give some confidence there and also insights on the price differentiation with the Chinese player? That is my first question. Yeah.

So, you know, in terms of technology, we have developed our in-house technology for LFP through years of research and development. And all these products, whether it's anode or cathode, is always moving ahead. So, we started with Gen 1, Gen 2, Gen 3. So, it keeps on moving. So, we have to work hand-in-hand with the customers and keep on developing new qualities depending on their requirement. That is something which is a strength of Himadri. In terms of pricing, we are trying to price our product as same as China. But the base is that we are trying to develop and set up the business.

Yeah, but how does the economics work there? Because we are making considerable margins as well. And, you know, at a similar time, we are also competing with Chinese players, which have a humongous capacity. And we are priced at almost like at par. So how does the economics work? Just trying to scratch my head over there.

So, see, economics works. Basically, we are not dependent on China for anything in this. We are not dependent on raw material. We are not dependent on anything. So, our raw material source is different. Our production base is India. So, we have cost advantage compared to China in many particular aspects. And given the technology that we are using, we have some cost advantage altogether. So, that will put us in an advantageous position compared to Chinese players.

Okay. And also, is there any client commitment regarding the supplies of LFP cathode once the capacity becomes live from Q3 effort 27 and also once we are completed 40,000 of capacity? So what gives you that visibility? Is there any client commitment? Can you share some thoughts?

Yeah, definitely. The clients were very encouraged by our samples, and that is one of the reasons. The best example of this is the IBC. We supplied our LFP sample to IBC, and they were so encouraged by seeing that the quality of the LFP we supplied that they came to us and we formed the strategic partnership. Because this will put IBC in a unique position where technology is developed outside China with supply chain positioned outside China. So, you know, this is one of the such examples. Other than this, we are having very strong relationship and the sample A has been approved. Now, sample B trial will start from, once we have 2000 medical capacity in place. Then sample C will go, sample D. So, that's the reason instead of setting up 40,000 in the beginning, we have set up 2,000 so that the capex is deferred and we don't have to wait for the orders for the plan to commission. So, by the time we have 40,000 medical plan, we have all the approvals because the commercial plan is operational and then 40,000 plan is up and running in full listing.

Yeah, a small follow-up on that, so... Okay, okay. So, no, actually, I had a different question on CNT also. So, what kind of, you know, potential revenue in your 30,000 crores of revenue guidance that you gave in next five to six years, are you baking in that or is it excluding that? And what is the margin profile? What rate market is growing? Some insights on those lines.

See, CNT, 30,000 we gave for lithium-ion component, so which includes 100 gigawatt of capacity for anode, cathode, and part of it, silicon carbon. For CNT, the market is evolving. We start with 200 tons. We see the market. We evaluate the market. Very high potential product with very high growth, and depending on how it goes, we will announce our next capex plan for that. These are high-valuated margin products.

Okay. Okay. Thank you. Thank you for your, thank you for the chance. Thank you.

Thank you. The next question is from the line of Part Sodha from Pranatra Asset Managers. Please go ahead.

Hello, am I audible?

Yes, yes, please.

So, first of all, thank you for the opportunity, and you have guided towards 1,100 crore spec by 2028.

So, after Q1, are there any assumptions underlying that roadmap that have changed, either positively or negatively? See, there is nothing negative. By God's grace, things are moving in the right direction, and things are positive only. I don't want to comment or change my projections. So, I'll remain at 1100 for next year, and let the quarter speak of itself, what happens. We are very positive and optimistic about the business.

Okay, okay. Thank you so much.

Thank you. The next question is from the line of Harsh Muthika from SKP Securities Limited. Please go ahead.

Hello. Good afternoon, sir. Congratulations on a great set of numbers for the quarter. Sir, given the West Asia situation that we had in April and May predominantly, how did that affect our realizations per ton and profitability in our core businesses?

So, the best thing is to see the resilience in supply chain which Himadriya has built over the years, which is clearly depicted by the numbers we came up with. Even going through such deep crisis globally, geopolitical situations, we have been able to post strong numbers. This itself shows the There is no dependence on West Asia for our functioning and working. In addition to that, what is something special about Himadri, even though being a chemical company, but we are not dependent at all on China for any of our products. That what happens with China, what happens with the pricing, their dumping, no dumping, so that is something we have built over the years.

Sir, also staying on the same point, we do notice that there has been a decline in sales volume for the quarter, but revenue as a total has gone up. How much of that can be attributed to a change in our sales mix towards higher value products and how much is on the account of passing over the raw material costs?

So see, the raw metal has gone up because of which the finished product crisis has gone up. That is definitely one of the parts. But it's a journey in which we are transforming our product into higher value-added product. So that is at the same time we are continuing. Every quarter you see we are improving in terms of bottom line, but with not similar improvement in terms of top line. The reason being we are more focused on our bottom line rather than top line. The intermediate products are used in-house and converted into finished product and value added product. So you see the value addition coming. This quarter you have seen top line growth. Again, next quarter coming you will see top line growth from both volume and value.

Sir, from the other expenses for the quarter, so if we remove the forex loss that we have booked, the other expenses stand at similar to 148 crores, while the same number excluding forex losses in Q4 was about 172 crores. Can you please shed some light on what has led to this decline in other expenses?

I'll go on for it.

Faith outbound is part of other expenses which has come down, which has helped us to reduce this cost. Plus, we are working on a cost optimization on all the expenses, which is helping us to reduce the cost.

Sir, just one last question on the new businesses that you've announced during the quarter. You've already given us a ballpark idea of what the revenues would look like. Can you also give us an idea of what the margins would be from this business, whether it be C&E or SACP?

I don't want to disclose the margins at this point of time. So, at right point of time, the numbers will speak.

Thank you, sir.

Thanks a lot.

Thank you. The next question is from the line of Rohit Tenha from Sunidhi Securities. Please go ahead.

Yeah, thank you for taking my question, sir. And congratulations for both set of numbers. Most of my questions are already answered. Just one or a couple of my side. One is on the IBS side, we have increased our stake recently to around 19% something. So, going forward, is there any target we have internal to take up our stake in this business?

No, no, no. It's a strategic investment. It's not a financial investment. So, we will remain at where we are. And this is, you know, IBC has developed prismatic cell lithium-ion cell technology out of China. They have their AI-based R&D center in California, and they have their manufacturing facility in Seoul in South Korea for 50 megawatt, which is a full commercial plant operating. So now with this integration with IBC, the Himadri product can be seen commercially used in cell. So, they have already come up with a new, you know, cell like Prouble 2000, Prouble 3000 where Himadi LFP and Anode will be used, Prouble 3000 where Himadi Silicone Carbon and Anode material will be used, hybrid material will be used. Plus, they are setting up facility through their technology in India for 7 gigawatts. The work is in progress and expected to commence operation by Q4F527, where IBC is giving the technology to set up the plant, in which Himadri raw material will be used.

Got it, got it, got it. But in future also, would we be looking to raise our stake if at all required?

No, no, no. We are not looking to raise our stake.

Okay, and secondly, sir, just on the mining side, as you have highlighted, this quarter, there was no such revenue from mining. So, how the licensing progress we have and from coming quarter, any kind of number we can get on the mining side?

No, we have applied for environmental clearance. It takes time. So, we don't have the visibility.

Okay, that will take time.

It will take time.

Got it, got it.

Got it, got it.

That is from my side, sir. Thank you.

Thank you. The next question is from the line of Isha Agarwal from VT Capital. Please go ahead.

Hi, good evening, sir. Now, my first question is regarding the big swing that we had seen in Forex change from a profit to a loss this quarter. So what's driving it? Is there any change in the hedging policy?

So there is no change in the hedging policy. Because of the huge volatility in the currency, this happened. And this is done with. If you see last quarter also there was a loss. This quarter again there is a loss. From next quarter there will not be any impact on account of effects. Negative impact. So this is the last quarter for this. Because of so much of volatility in the currency this happened. But looking forward it's not going to happen.

Okay. So, second question related to this. So, last year we had seen good foreign gains, which led to higher other income component. So, sir, this quarter we are again seeing a higher rise in the other income portion. So, what is driving that? What component led to such growth if FX was a loss this quarter?

So, this quarter, if you see two, three factors. One, we have deployed a lot of funds in terms of interest in FDs. We have borrowed from banks and CPs and deployed in FDs, which gives us a delta. So, that helps to have interest earning on our investments. Plus, we have made investment in mutual funds. So, that is part of it. Other than this, we have made investment in IBC, Sikona, and series of Will Attire. So, mark-to-market of that is also helping us to, you know, that was the result for other income.

Sir, this is the usual run rate that we should resume from now onward when it comes to other income?

This will vary 30 to 40 percent, quarter on quarter.

Okay. And, sir, last question, the new KPEGs that you have announced. So, are we planning to take any incremental debt or in FY27, the free cash flow will cover that?

Yeah, definitely, the free cash flow will cover that. There is no question of any incremental debt.

Okay. Thank you so much, sir. That's it from my side.

Thank you. Thank you so much.

Thank you. The next question is from the line of Bhavind Shada from NM Holdings. Please go ahead.

Yeah, congratulations on an excellent number and very exciting projects for the next five years. What would be the year-wise CAPEX if you can guide for next two or three years? So, if you have a consolidated?

Yes, total CAPEX we have announced is around 2,000 crores, 1,125 crores for LFP. 368 crores announced yesterday. So, that brings to around 1500 crores of capex plus 500 crores of capex this year in Villa Tires. So, total 2000 crores. Out of this, we expect around 1000 crores of capex happening this year and 1000 crores next year.

2000 crores. And Koldar, which you are at 6 lakh tons, so there no capex is happening.

There is no capacity there. Right.

Distillation, no capacity. So, 1,000 crores this year and 1,000 crores next year. Right, right. Right. And Birla tires, I think I heard on your CNBC interview, your quarterly sales were 127 crores?

Right, right.

Okay. And that's a beta positive?

Not yet. So, now Birla tires is reflected on... Um... Dalmia refractory, balance sheet. So once it becomes part of Himadri, then the numbers will come. So it is through a subsidiary that we are selling tires, that revenue is recognized in Himadri.

So the difference between Consolidate sales and Standalone sales is largely Builder Tires?

It is largely Builder Tires, yes.

And in case of the core business, Koltar and Carbon Black, these margins are sustainable?

Definitely. The way we have built up the business over the years is on sustainable value margins. So if you look at Koltar, which we supply material to our customers at the lowest price globally.

Did you hear my answer? Yeah, I think you said thousand-thousand crore capex next year, margins are sustainable, and last question on the tire ramp-up, if any guidance there?

So, we are ramping up quarter and quarter. If you see, compared to the last quarter, this quarter is higher in terms of volumes, in terms of sales. We continue this trajectory. And in the next four to five years, target is to reach 3,000 crores of top line in Build-A-Tires.

And what is the EBITDA break-even level for the turnover? Thank you, sir.

Thank you. The next question is from the line of Tanvi Varigar from Anand Prairie Institutional Equities. Please go ahead.

Hi, sir. Good evening. Just a follow-up on the LSD platform pricing, where you said that your pricing is competitive versus China. Just wanted to know that from our workings, we arrived at PNC, we won't be making any money. Like, we are arriving at a gross, negative gross spread on this if we compare the China pricing versus the input cost calculation. So, just wanted to know, like, where are we sourcing the lithium carbonate because that is, like, a major driver for the spread on LFC. Do we have any advantage over there?

See, I'll suggest that it is not possible for you to calculate my cost on Excel Seat and come to a conclusion. It took a long time for us to come to a conclusion and see how to make profit. And on Excel Seat, by seeing at few prices, you cannot determine what is the margin. But we are confident, we'll work on it, and I cannot disclose my sources. That is confidential. Thank you.

Okay. Okay. Yeah.

Thank you. The next question is from the line of Bhavika from Niveshay. Please go ahead.

Oh, hello. Am I audible?

Yes, yes, please.

Yeah, so basically most of my questions have been answered. I need to know as we continually emphasize that we are shifting our product mix and that will lead to a higher profitability. So can you like tell us like what's the product margin mix from the current capex which we are doing? If you can broadly explain or in terms of pricing difference if you can explain that it's not possible with the margin.

See, pricing difference as we move up the ladder, we go for the niche product. All the caps we have announced there yesterday has significant high margins and significantly differently priced altogether. So, there will be no comparison between what we are doing, what pricing we are doing, what margins we are having today, and what margins will be products today.

So, how do you expect our blended EBITDA margin to go over the next two to three years?

So you calculate on the basis of what we are performing. You calculate on the basis of our results what we are performing.

Okay. And also, okay, got it. Also, like, as we are talking about the Anod site or the pilot plant which we have, as per my understanding, we are doing with MesoCoke technology, which is different than other players in the market. And when we look at the other players, they have been doing the pilot plant since like years. So, how confident we are that we will be able to onboard customers for our Anorps, like, pilot plant, or how, like, are we seeing the traction from the customer that they are getting the confidence on our product?

See, first of all, no one is doing this product before Himadri. Himadri is a pioneer in this. So, there is no other plant in India who has pilot plant before Himadri. So, Himadhi has set up 200 plants now, but the pilot plant is there for the last many, many years, and we are doing it on different types of raw materials. So, our raw material is one of it, other raw materials, so we have all the varieties of finished products available with us, depending on the appetite requirement and specific uses of the user industry, we will produce the anode material and supply to them, depending on what price they give, depending on what quality they want, we will do it.

So, are we currently seeing any traction from the customer that...

There is a huge attraction from the customer, attraction from the customers, and because of the quality what we are producing, there is great interest from customers in India and globally.

Got it. So, what's the timeline we can expect then getting converted on the full-fledged commercialization at a large scale, if you can guide on that?

See, I have not made any public disclosure on that. So, on a call, I don't want to make any public disclosure. So, once we come up, we'll come up with the announcement, formal announcement for the capacity.

Okay. And so, just last one clarity on the super specialty carbon that you have mentioned. Can you explain, like, how this difference from the specialty carbon? Like, you have already explained a bit, but I want to know in terms of application, like, how it differs in terms of application and what, like, how big the market TAM is for the particular super specialty carbon?

I told the market is not very big. It's like 300,000 in the market. And very niche application, very high value added applications. I don't want to go into details or application as such. But if you look at margins, the margins are significantly higher than specialty carbon back. So there is no comparison between specialty margin and super specialty margins. These are significantly higher.

Okay.

And sir, in the like previous answer, you once mentioned that you are also focusing on the natural anode, like synthetic anode you were talking about. As we are already in synthetic anode like materials, then why we are going for the natural? Like I want to understand from where we are seeing the traction in the market, in the industry.

So, some customers need low-value anodes. Some need medium value, some need high value. So, depending on customer appetite, we should have all the products available with us. Some need blend anodes, natural synthetic silicon. So, as an anode producer, we will showcase a unique proposition to our customers having all types of anode material.

So, like, what's our plan in the natural side? If you can, like, do we have...

So, natural also, already we are producing natural anodes. Synthetic we are producing. Silicon carbon, our partner is producing. So, all will be integrated in Himadri over a period of time.

Okay, got it. Okay, that's all, sir. Thank you so much.

Thank you. Thank you so much.

Thank you. Due to time constraints, we take that as the last question of the day. And now, I hand the conference over to Mr. Anurag Chawdhury for closing comments.

Thank you. Thank you so much.

Let me close by thanking each of you for joining us today and for your continued interest and for thoughtful engagement we continue to receive around Himadri. I hope our discussion has given you a clear sense. Not just of where we stand today, but of the direction in which we are building the business. As I mentioned at the outset, we are pursuing our ambition with discipline, funding it from our own balance sheet, and building it on firm foundations of safety, sustainability, and trust. I remain confident that the decisions we are taking today will compound into meaningful and lasting value over the years ahead. We would like to thank all our stakeholders and partners for their continued trust and to the entire Himadri family. Thank you for your dedication and commitment that makes all this possible. Our investor relations team remains available for any further questions and would look forward to staying engaged in quarters ahead. Thank you once again, and I wish you all a very good evening. Thank you.

On behalf of Hemisphere Specialty Chemical Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.