Multibagger Himadri Speciality Chemical stock hits 5% upper circuit after company’s net profit jumps 43% YoY

Shares of Himadri Speciality Chemical surged by 5%, hitting the upper circuit limit at ₹439 apiece, following the release of its Q1FY25 results today during market hours. The company's report showed a healthy improvement in its net profit.

The company posted a consolidated net profit of ₹123 crore, a 43% growth as compared to a net profit of ₹86 crore. The revenue from operations jumped to ₹1,200 crore from ₹951, which is an increase of 26.8%.

The revenue from carbon materials and chemicals, which accounts for over 99% of the company's revenue, surged to ₹1,194.34 crore, a 26.3% YoY improvement, while the revenue from the power segment came in flat at ₹25.85 crore, as per the company's exchange filing.

The company has solidified its position as a key player across various product segments, including battery materials, coal tar pitch, carbon black, naphthalene, refined naphthalene, SNF, and speciality oils.

Its extensive clientele spans diverse sectors such as lithium-ion batteries (LiB), paints, plastics, tyres, aluminum, graphite electrodes, agrochemicals, defence, and construction chemicals.

With the increasing adoption of electric vehicles (EVs) in India and globally, the demand for LiB is expected to grow significantly. Recognising this trend, the company has diversified its offerings to align with industry needs and strengthen the local manufacturing and EV supply chain ecosystems in India.

In December, the company announced the establishment of a state-of-the-art manufacturing facility for LiB components. This facility will produce 200,000 MTPA of Lithium Iron Phosphate (LFP) Cathode Active Material, catering to 100 GWh of Li-ion batteries, with an investment of INR 4,800 crores over the next 5–6 years.

The company has recently acquired a 40% stake in Invati Creations for a consideration of ₹45 crore to engineer high-quality LiB materials for efficient energy storage with higher energy density and longer battery life.

The comprehensive lithium-ion (Li-ion) battery industry, encompassing activities ranging from mining to recycling, is forecast to witness an annual growth rate exceeding 30% from 2022 to 2030. By 2030, it is anticipated to achieve a market value surpassing USD 400 billion with a capacity of 4.7 TWh, with mobility applications alone accounting for 4.3 TWh.

Meanwhile, the company, along with Dalmia Bharat, acquired Birla tyres Limited for an acquisition cost of ₹306 crore. By leveraging its expertise in carbon black production, the company is on track to develop tyres for both commercial and passenger vehicles under the brand Birla Tyres within a year.

Additionally, the company is investing ₹220 crore in the brownfield expansion of a new specialty carbon black line, more than doubling its capacity to 1,30,000 MTPA. This expansion will make the company the world’s largest single-site producer of specialty carbon black, significantly contributing to its bottom line, as per the company's FY24 annual report. 

Looking at the stock's performance, it has rallied 204% in a year and 687% over the last 3-year period. 

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