Is It Time to Watch After a 23% Correction?
Every few quarters a chemical business reaches a point where the story changes faster than the numbers do. The old products still pay the bills, new plants are half built, and the market keeps guessing which side wins. When the share price falls in the middle of all this, investors usually split into two camps, one calling it a chance and the other calling it a warning. Let’s look at what the latest numbers say.
Himadri Speciality Chemical share price was trading at ₹617.15 on October 19, 2026, down 6.55% from the previous close of ₹660.40. The company has a market cap of ₹31,139.80 crore and a P/E of 36.24 on consolidated numbers. The stock touched its 52-week high of ₹819.50 on July 21, 2026, so it’s now more than 20% below that peak, though still well above the 52-week low of ₹420 from November 2025.
Sales Jumped, Profit Didn’t Keep Up
For the September 2026 quarter, consolidated revenue came in at ₹1,691.43 crore, up 57.93% from ₹1,071.03 crore a year ago and 18.13% higher than the June quarter. That’s a big jump, no doubt. EBITDA tells a quieter story though. At ₹303.22 crore it grew 27.48% year on year, but it actually slipped 3.16% from ₹313.11 crore in the previous quarter. Net profit was ₹231.32 crore, up 31.33% from last year and only 1.27% above June.
So sales grew almost twice as fast as profit over the year. You can see it in the margin, EBITDA margin is around 17.9% now, against about 22.2% a year back and about 21.9% in the June quarter. Net profit margin also came down to roughly 13.7% from 16.4%.
For the first half, revenue was ₹3,123.31 crore (up 42.66%), EBITDA was ₹616.33 crore (up 30.27%) and net profit was ₹459.75 crore (up 29.32%). Growth is still strong, honestly, but the first half EBITDA margin sits near 19.7% compared to 21.6% last year. The direction is the part to watch.
Where The Margin Is Leaking
Gross profit is the first place to look. It was ₹520.42 crore in the September quarter, almost flat with ₹519.77 crore in June, even though revenue rose 18%. Cost of materials consumed went up to ₹1,171.01 crore from ₹912.11 crore, about 28% higher in just one quarter. Gross margin ended near 30.8%, compared to roughly 36.3% in June and 38.2% a year ago.
Volume doesn’t explain the revenue jump fully either. The company’s reported sales volume was 1,46,806 MT, up about 8.3% from 1,35,513 MT last year and about 11.3% from June. Revenue rising 58% on volume rising 8% means price and product mix did most of the lifting. That could be costlier feedstock getting passed on, it could be lower margin sales being added, probably a bit of both.
Other lines moved too. Finance costs nearly doubled to ₹27.72 crore from ₹14.78 crore, employee cost rose to ₹60.68 crore from ₹51.38 crore, and depreciation went up to ₹21.69 crore from ₹17.39 crore. New plants and new debt, you can see them showing up in the costs already.
One small thing is easy to miss. Profit before tax rose from ₹300.51 crore in June to ₹307.34 crore, even with EBITDA falling. The reason is foreign exchange, a loss of ₹25.20 crore in June turned into a gain of ₹11.74 crore in September, a swing of about ₹37 crore. Other income fell to ₹41.79 crore from ₹56.31 crore. So the tiny quarter on quarter profit rise got help from currency, not from the core business getting better.
The Battery Materials Push
This is the part of the story that gets most attention. The company set up a 200 MTPA anode material plant at Mahistikry in West Bengal, started in April 2026, with customer approvals happening at various stages. It’s small right now, honestly more of a proving ground.
The bigger bet is LFP cathode active material. Phase 1 capacity is planned at 40,000 MTPA with a capex of ₹1,125 crore, and the first 2,000 MTPA is expected in Q3 FY27. The company says it will be the first commercial LFP cathode plant outside China, and it targets 200,000 MTPA over time. LFP is a battery chemistry known for safety and low cost, which is why it’s getting popular in mass market EVs, buses, two wheelers and grid storage.
Then there are the investments. Sicona, the silicon-carbon anode company, got up to AUD 45 million in funding from the Australian Renewable Energy Agency and completed 100% acquisition of Advano in the USA, which adds a pilot plant and cell testing capability. Sicona says it has 39 global OEMs and cell makers under NDA, with 14 active qualification programs.
The company holds a 19.44% stake in International Battery Company, which expects its India gigafactory to start commercial operations in Q1 FY28, and a 40% stake in Invati Creations. Non-current investments on the balance sheet went up to ₹1,226.23 crore from ₹935.14 crore in March. A fair point though, most of this is still in the approval and testing stage. Revenue from it will take time.
The Core Business Still Does The Heavy Lifting
It’s easy to forget that the cash today comes from older businesses. The company has about 250,000 MTPA of carbon black capacity, of which around 130,000 MTPA is speciality carbon black, with 70+ speciality grades sold under nine brand series. It holds roughly 65% domestic market share in coal tar pitch, with 600,000 MTPA coal tar distillation capacity, and around 67% share in naphthalene.
The shift towards higher value products continues. A ₹248 crore project for anthraquinone and carbazole, 5,300 MTPA in total, is due in Q4 FY27, and carbazole would be India’s first commercial plant. A ₹70 crore carbon nano tube plant of 200 MTPA is also targeted for Q4 FY27, and a ₹170 crore super speciality carbon black project of 6,000 MTPA for Q4 FY28. Add these with the LFP project and planned capex comes to about ₹1,613 crore. That’s a lot of money going out over the next two years while cash flow is weak.
The company also set up a wholly owned subsidiary in Dubai for global sales and trading, as it sells to customers in 61 countries.
Birla Tyres And The Demerger
The tyre business is the other piece. The company, along with DBRL, acquired Birla Tyres in October 2023. It now has 49 distributors and 1300+ dealers, over 160 SKUs across agriculture, off the road and truck bus bias tyres, and plans around 400 new SKUs. The brand is nearing double-digit market share in select geographies, according to the company.
Then comes the demerger. The board approved on September 21, 2026 a plan to move the tyre business of DBRL into the company, with October 1, 2026 as the appointed date. It still needs regulatory, creditor and shareholder approvals. For the company it means more control over funding and growth, but it also means more capital needs in a business that’s still ramping up. A passenger car tyre plant is also planned, with commissioning targeted by FY28.
A Look At The Longer Record
Zoom out and the five year record looks strong. Consolidated revenue went from ₹2,791 crore in FY22 to ₹4,661 crore in FY26, EBITDA from ₹163 crore to ₹1,006 crore, and net profit from ₹39 crore to ₹755 crore. ROCE was 32% in FY26. One number moves the other way, the company’s cash rich figure fell to ₹121 crore in FY26 from ₹392 crore in FY25, so the cash cushion was already getting thinner before the heavy spending phase began.
Himadri Speciality Chemical started as a coal tar derivative business and now calls itself a global advanced materials company. It runs 8 zero discharge plants across India and China, making carbon black, coal tar pitch, naphthalene, speciality chemicals and battery materials. It also holds stakes in Sicona, IBC and Invati, and acquired Birla Tyres along with DBRL in 2023.
The stock has corrected, but is it cheaper now?
Himadri Speciality shares have fallen around 23% from their 2026 high. A correction of this size can bring a stock back onto investors’ watchlists, particularly when the company is still reporting growth. But the fall alone does not establish that the valuation has become attractive.
Investors need to consider what the market was pricing in before the correction. A company expanding into battery materials may command a premium because of its expected future growth. However, that premium depends on the company converting its plans into commercial revenue and earnings.
Himadri’s latest results present both sides of the story. Revenue and net profit are growing, while margins have declined. The company is also committing capital to new facilities and technologies that may take time to deliver a meaningful contribution. This means the stock’s prospects depend not only on the size of its expansion plans but also on the returns those investments eventually generate.
The correction may therefore be a reason to revisit the stock, but it should not be the only reason to consider it. The more useful questions are whether the current valuation leaves room for execution delays, whether operating margins can recover and whether the battery-materials business can scale as planned.
Bottom Line
The fall in the share price comes with a mixed set of numbers. Sales are growing fast, profit is growing slower, margins are lower than last year, and cash flow and debt both moved the wrong way in the first half. On the other side, a few big plants are due in the next two quarters, plus the tyre demerger. Whether margins settle back near 20% and operating cash flow turns positive are probably the two things worth tracking in the coming results.
