Shares of Himadri Speciality Chemical, a renowned multibagger in the Indian markets, have faced selling pressure over the past year. However, market experts are now turning optimistic, citing the company's robust expansion plans and strategic entry into high-growth sectors like lithium-ion battery materials as potential catalysts for a significant rebound.
From Multibagger to Rebound Candidate: The Himadri Journey
The stock's historical performance has been nothing short of spectacular. Data from the Bombay Stock Exchange reveals that Himadri's share price skyrocketed by 832% over the last five years and 393% over the last three years. However, it has corrected by approximately 18% in the past year, creating what analysts believe is a compelling entry point for investors.
The company's ambitious growth strategy is at the heart of this renewed optimism. Himadri, which is India's largest producer of coal tar pitch and speciality carbon black, is strategically pivoting to become a major supplier to the global electric vehicle (EV) and energy storage supply chains.
Strategic Expansion and New Business Forays
Anurag Choudhary, Chairman and Managing Director of Himadri Speciality Chemicals, outlined the company's approach. He stated that the expansion is being funded organically, using cash flows from existing businesses to invest in new ventures. The core focus remains on speciality carbon black, which finds applications in plastics, coatings, cables, inks, and critically, lithium-ion batteries.
The company is executing significant capacity enhancements. It plans to increase its coal tar pitch capacity from 5 lakh metric tonnes per annum to 6 lakh metric tonnes. Furthermore, it is more than doubling its carbon black capacity from the current 60,000 tonnes to 1.30 lakh tonnes per annum, involving a capital expenditure of ₹220 crore.
Expert Views and Price Targets Turn Bullish
Market analysts have turned decidedly bullish on the stock's prospects following these developments. Rajesh Agarwal, Head of Equity Research at AUM Capital, highlighted the company's transformation. "Himadri has transformed itself from a chemical company to EV batteries and tyres with the recent acquisition of Birla Tyres," he said, noting that the foray into the fast-growing replacement tyre market and EVs bodes well for its future.
Independent market analyst Ambareesh Baliga expects substantial revenue growth from these new initiatives. "These are good triggers for the stock. Expected EPS for FY27 is ₹18, and my target price for Himadri Speciality Chemicals is ₹630," Baliga stated.
Providing a technical perspective, Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, noted that the stock is at a crucial juncture. It is positioned near its 200-day exponential moving average, aligning with a rising trendline. However, the Relative Strength Index (RSI) slipping below 50 indicates weakening momentum. Patel suggested that a daily close above ₹486 could trigger a rally towards ₹520, while a close below the support might drag the price to ₹435.
The company's strong fundamentals provide a solid backdrop. According to its annual report, Himadri achieved its highest-ever EBITDA of ₹844 crore and a profit after tax (PAT) of ₹558 crore in FY25. Investors are now keenly awaiting the company's results for the December quarter (Q3FY26), which are scheduled to be announced on Friday, January 16, as per an exchange filing on January 8.
