Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Himadri Speciality Chemical Ltd (NSE: HSCL) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Anurag Choudhary — Chairman, Managing Director and Chief Executive Officer
Kamlesh Agarwal — Chief Financial Officer
Analysts:
Chirag Bhatia — Analyst
Divyansh Thakur — Analyst
Dhruvin Karakia — Analyst
Unidentified Participant
Unidentified Participant
Ishani Jen — Analyst
Unidentified Participant
Animesh Jain — Analyst
Priti Agarwal — Analyst
Rohan Baranwal — Analyst
Disha — Analyst
Unidentified Participant
Devanshi Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Himadri Specialty Chemical Limited Q3 and NM FY26 conference call hosted by MUFG. As a reminder, all participant line 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 an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Mr. Chirag Bhatia from MUFG. Thank you and over to you sir.
Chirag Bhatia — Analyst
Good evening everyone and welcome to Q3 and 9 months FY26 earning conference call of Himadri Specialty Chemicals Limited today on the call we have with us Mr. Anurag Chowdhury, CMD and CEO, Mr. Somesh Satnamika, EBP Tires and Strategy and Mr. Kamlesh Agrawal, CFO. Before we proceed with the call I would like to give you a disclaimer that this conference call may contain a forward looking statement about the company which are based on the beliefs, opinion and expectations as of today actual result may may differ materially.
The statement are not the guarantees of the future performance and involve the risk and uncertainty that are difficult to predict. A detailed safe harbor statement is being given on page two of the investor presentation of the company which are being uploaded on the Stock Exchange and the company website. With this I now hand over the call to Mr. Anurag Chowdhury. Over to you sir.
Anurag Choudhary — Chairman, Managing Director and Chief Executive Officer
Thank you Chirag Good evening ladies and gentlemen. Thank you for joining us today to discuss the performance of Himadri Specialty Chemical Limited for the third quarter and nine months ended 31 December 2025. We sincerely appreciate your continued interest, trust and engagement with the company. I am pleased to share that we have started prior production of of specialty Carbon black expansion project, a landmark achievement for Himadri because Himadri has the world’s largest single side specialty carbon black plant with a total capacity of 130,000 metric ton per annum.
This milestone underscores our continued focus on high value added solutions and marks the beginning of next phase of growth in our specialty carbon black journey. In Kolta Pitch we achieved a key milestone with the commissioning of a Mangalore port terminal successfully delivering 3,600 metric ton of liquid Kolta pitch to the Middle East. This establishes a second export corridor along with Haldia significantly enhancing our logistics flexibility and opening up access to new global markets. We are well positioned to cater to rising international demand while offering best in class quality at global most competitive prices supported by operational excellence.
Continued improvements in yield and waste heat recovery systems, we continue to drive sustainable profitability. Our commitment to sustainability was once again reaffirmed as EcoVadis and awarded Himadi the platinum medal for second consecutive year placing us amongst the top 1% of over 150,000 companies globally assessed on ESG parameters. This recognition reflects our deeply embedded approach to sustainability anchored in strong governance, climate conscious operations, ethical business practices and responsible supply chain management.
At the heart of Himadi’s performance are our people. We are honored to be certified as a great place to work, a testament to the strong and inclusive culture we have consciously nurtured over the years. The year to date has been marked by steady execution and meaningful progress. We have remained firmly anchored on on operational discipline, deepening customer relationships and strengthening institutional capabilities to support long term growth. This consistency of approach continues to deliver results reflected in our robust financial performance with PAT growing 41% year on year with 9 months FY26 PAT exceeding PAT of FY25.
As we look ahead, we do so with the confidence what we set out to achieve in FY26 we have realized and the preparation for future projects are already progressing well, laying a strong foundation for sustained and profitable growth. We have also been actively investing in our rubber, plastic and coating laboratories to enhance product performance across critical parameters such as ease of dispersion, reduced filter press values and improve conductivity to lower loading. With the commencement of trial production at a specialty carbon black expansion project, we have significantly strengthened our ability to serve the growing demand of customized and application specific carbon black grades.
This places us in a strong position to address the global requirement for performance enhancing specialty carbon black used in premium and high value applications across plastics, inks, high performance coatings, batteries, paints, wires and cables, fibers, rubber EV tires and several other niche applications. In parallel, our recently launched branded naphthalene ball brand Durofresh has received an encouraging response in the retail market, adding further depth to our diversified portfolio. The first of its kind, commercial anthraquinol and carbazole facility in India remains firmly on schedule for Q2FY27.
This project enforces our commitment to innovation and imposed substitution while aligning closely with Government of India’s vision of Atman Nirbhar Bharat aimed to strengthening domestic manufacturing capabilities. Over the past two years, volume and product line were largely constrained by operating at peak capacity utilization and dynamic raw material prices. With the start of trial production at specialized black expansion project along with debottling of our coal tarp pitch distillation capacity, we now have the necessary headroom to reignite growth in coming quarters and further consolidate our leadership position.
Birla Tire continues to strengthen its footprint across India and key international market including Asia, the Middle east and Africa. Supported by a robust and expanding distribution network of 36 distributors and over 640 dealers. Its diversified portfolio now comprises more than 80 products across flagship range such as Kalapatthar, Loadmax, Ultragip, Farmhaul, Platina, San XLP, LG, Roadmailer, Zeta, B339, Ultratech and many others. Engineered to deliver superior grip mileage durability across varied customer applications, the team at Bellatare continues to scale in both capability and size with modernization initiative progressing well to enhance offering across of the highway tires, commercial vehicles, agriculture, industrial segments for passenger car, radial unit designed specifically for EV and SUV installation of plant and machinery is being planned.
This will position Bila Tire to participate meaningfully in fast mobility segment while complementing Himadi’s broader strategic ambitions. The most transformational chapter in Himadi’s journey is our entry into battery materials. Lithium ion batteries represent a structural shift in global energy consumption and anode and cathode materials together constitute 65% of the total battery cell cost, making materials innovation centered to long term value creation. On the cathode side we are focused on lithium iron phosphate, a chemistry gaining rapid global acceptance due to its safety, longevity and cost efficiency.
Our long term vision is to build 200,000 metric ton of LFP cathode active material capacity in phases catering to approximately 100 GWh of battery energy demand. The first commercial phase of 40,000 metric tonnes per annum remains on track for Q3 FY27, positioning Himadri at the heart of E mobility ecosystem as the first commercial LFP actored active material plant globally outside China serving both domestic and international markets across mobility and energy storage applications. On the anode side, our strong legacy and deep expertise in carbon chemistry provide a clear strategic advantage.
We are one of the only company to have backward integration in terms of raw material. Intense research and testing are underway as we progress steadily towards development of comprehensive spectrum of anode pollution including synthetic, natural hybrid and silicon carbon based technologies, thereby strengthening our capabilities in this high growth and strategically critical domain. As Himadi writes the new chapter in the HIMADRI reloaded phase we continue to expand across multiple high value categories while specialty carbon black coal tarp pitch and specialty oil naphthalene remains at our core.
We are actively expanding our product portfolio and making sustained investment in research and development to support future growth at Himantry R and D is not a department, it’s embedded in our DNA. It saves how we think, operate and deliver value. Over the years we have built a global R and D ecosystem bringing together exceptional talent including PhDs and subject matter experts from USA, Japan, South Korea, China, South America, Australia and Europe. This rich techno, cultural diversity, wealth, innovation, agility and a forward looking mindset enabling us to lead in new technologies and product developments for emerging and sunrise industries.
Our commitment to innovation is further strengthened through strategic investments in Cinconna, IBC and Invaty which have enhanced our technological depth, accelerated our innovation pipeline. With the strong synergies with between our innovation and research team, we are not only collaborating on new developments and emerging technologies, but have also been leveraging shared expertise to adopt best practices and strengthen our processes across our core verticals. Together, we are developing a sustainable growth engine that is paving the way for a portfolio of innovative products built on cutting edge technologies.
These collaborations have enabled us to establish a strong joint product development map that leverages our collective expertise across cell chemistry, battery science, material technology and operational excellence. Our shared focus is on developing solutions grounded in principles of sustainability and circularity for Sunrise sector such as high performance and high value added defense, application growth, drones, AI, data center mobility and many more. Today, R and D at HIMADI goes far beyond product development.
It is about advancing technologies, transforming processes and unlocking new possibilities to keep us ahead in a rapidly evolving global landscape. In parallel, we continue to actively leverage artificial intelligence and digital tools across work teams, procurement, logistics, inventory, material management, quality management, sales and marketing and manufacturing to sharpen execution, improve predictability and build a more agile data driven operating model for the future. This year marks a defining chapter in himad’s journey characterized by progress, resilience and purposeful execution.
The path we envisioned is unfolding with clarity and we continue to build on that momentum confidence as we look ahead. The horizon is bright, filled with opportunities that will take us to greater heights and unlock new possibilities. Together, we are shaping a future of sustained growth and innovation. Before concluding, I would like to express my sincere gratitude to our colleagues, partners and investors for their continued trust and support. With this, I hand over to our CFO, Mr. Kamlesh Agarwal who will take you through the financial performance in detail.
Thank Kamlesh. Please.
Kamlesh Agarwal — Chief Financial Officer
Thank you Anurag Ji and good evening everyone. I’m
Operator
Sorry to interrupt you sir, but your voice is breaking.
Kamlesh Agarwal — Chief Financial Officer
Now. It’s okay.
Operator
Yes, please go ahead sir. Now.
Kamlesh Agarwal — Chief Financial Officer
Yeah, yeah. Thank you Anurag Ji and good evening everyone. I trust you have had the opportunity to review Our financial results, the latest investor presentation and press release, all of which have been made available on the stock exchanges and on our company’s website. Let me now take you to through the financials for the quarter and nine months ended 31 December 2025 on a standalone basis. We are pleased to share that we have already surpassed our full year FY25 PAT within the first nine months of FY26.
This outcome clearly reflects the effectiveness.
Operator
I’m sorry to interrupt you, sir, but again your voice is breaking.
Kamlesh Agarwal — Chief Financial Officer
Hello. Now it’s clear.
Operator
Yes, sir.
Kamlesh Agarwal — Chief Financial Officer
This outcome clearly reflects the effectiveness of our strategic focus on value added products which continues to be the key driver of profitability and margin expansion from a quarterly perspective. In Q3FY26, standalone revenue stood at rupees 1133 crores. EBITDA was Rs. 249 crore, registering at 12% year on year growth. While profit after tax came in at Rs.195 crore, reflecting a strong growth of 37% year on year increase. These results underscore the consistency of our execution despite a dynamic operating environment.
Looking at the cumulative performance for nine months, FY26 on a standalone basis, revenue stood at approximately Rs. 3,304 crores. EBITDA increased to Rs. 726 crores, representing a 19% year on year growth compared to Rs. 611 crores in nine months. FY25 profit after tax stood at Rs. 564 crores, marking a 41% year on year growth over approximately Rs. 400 crores in the corresponding period last year. Now turning to our consolidated performance. In Q3IY26, revenue stood at Rs. 1,184 crores with EBITDA at rupees 253 crores compared to rupees 225 crores in Q3FY25 reflecting a 12% growth.
Sorry,
Operator
But I’m sorry to interrupt you. Sir. Again. Voice breaking.
Kamlesh Agarwal — Chief Financial Officer
Sir,
Operator
Again it’s breaking.
Kamlesh Agarwal — Chief Financial Officer
Hello. Hello. Am I audible now? Now my voice is clear.
Operator
Yes. Yes, it’s clear now.
Kamlesh Agarwal — Chief Financial Officer
Profit after tax came in at rupees 192 crores, registering a growth of 36% against rupees 141 crores in Q3 FY25 for nine months FY26 On a consolidated basis, the revenue stood at approximately rupees 3,373 crores. EBITDA was rupees 726 crores reflecting a growth of around 18%. While profit after tax stood at rupees 548 crores. A 37% increase over nine months. FY25. This performance highlights the strength and resilience across all the business segments. From an operational perspective, our sales volume for nine months FY26 stood at 428,002.
As compared to 415,629.
Operator
I’m sorry to interrupt you sir, but again your voice is breaking. No, no. We can’t hear you properly. Sir.
Anurag Choudhary — Chairman, Managing Director and Chief Executive Officer
Let me take it over.
Operator
Sure.
Anurag Choudhary — Chairman, Managing Director and Chief Executive Officer
Let me take it over. Am I. Am I audible?
Operator
Yes, it’s loud and clear from your end. From mine.
Anurag Choudhary — Chairman, Managing Director and Chief Executive Officer
From an official perspective, our sales volume for the nine month FY26 stood at 4 lakh 28,572 metric ton as compared to 4 lakh 15,679 metric ton in the previous year reflecting a growth of 3%. EBITDA per metric stood at 16,934 in nine months. FY26 compared to 14,707 in nine months FY25 representing a 15% improvement driven by product mix that remains increasingly focused on high value added offerings. I am also pleased to share that during the quarter the promoters have further strengthened their mistake in Himadri to conversion of 1 crore warrant into equity.
The warrants are acquired at a total price of 316 per warrant. Promoter’s shareholding now stands at 52.5%. This development underscores the promoter’s continued confidence and long term commitment to Himadi’s growth journey. Strengthening promoters stake not only enhances the company’s capital structure but also demonstrates the immense faith in our business as we embark on the next phase of expansion and value creation for all our stakeholders. Overall, these results reinforces our confidence that Himadi is well positioned to continue its upward journey and trajectory.
Supported by a strong financial foundation, disciplined execution and a clear strategic direction. So now Chirag, we can open the session for question answer section.
Operator
Thank you so much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are request to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. A first question come from the line of Divyansh Thakur from Fintrist Capital. Please Go ahead.
Questions and Answers:
Divyansh Thakur
Sir. Congratulations on the great set of numbers. So we have mentioned the roadmap to grow and accelerate towards 2028. So how do we vision that? How do we scale it up? We start our operations for the phase one cathode in quarter three. We have also Birla tires gradually ramping up. So how do we see the coming years and how do we can shape the development for the company going ahead?
Anurag Choudhary
Thank you Diwans. So if you look at the profitability achievements for FY24 we achieved a PAT of 411 crores. And in FY25 we gave a guidance that in next three years that is by FY27 will double the PAT. Effectively 800 crore plus. But if you look in FY26 we are already nearing to the target. So now FY25 we had a PAT of around 558 crores. With all these projects coming in, with new capacities coming in, value added products coming in. We are confident that the profit will again double from FY25 to FY28.
So in two years from now.
Divyansh Thakur
So what you are saying is that the PET level of FY25 when we’ll see the at level of FY27 it will double. Am I right?
Anurag Choudhary
28F by 28. Okay.
Divyansh Thakur
Okay. Okay. Okay. FY28.
Anurag Choudhary
So we are giving guidance what we gave one year back. We are giving the same guidance which we gave one year back. When we articulated that pat will double in three years. Same thing we are saying again now. One year. Fast forward the PAT will double again in three years from FY25 to FY28. Only one disclaimer is that last time when we told it will be done it was done in two years instead of three years.
Divyansh Thakur
That’s. That’s great sir. Sir, also I wanted to get a look, look out on how the cathode active material, the operations that are coming. I think this is the first one in the in India to come up. And also there I saw some headlines that you are in talks with some last players. So if you can give some more information on that.
Anurag Choudhary
Definitely. So in terms of Cathode, our pilot plant demo plant is under construction and expected to be commenced in the fourth quarter. And post that we will be sending sample B to our customers. There are series of samples will need to be approved by the customers. So next stage of sampling will start.
Divyansh Thakur
Sir, can you name some customers?
Anurag Choudhary
Hello.
Divyansh Thakur
Hello. Am I audible?
Anurag Choudhary
Yeah, you are audible. Please.
Divyansh Thakur
Sir, can you name some customers?
Anurag Choudhary
No, we cannot Name some customers, the global customers plus India customers. We have NDA so we cannot disclose the names on public forum. And regarding the capacities for lithium ion phosphate. So we expect FY29 to be the full year of operation for lithium ion phosphate.
Divyansh Thakur
Okay, that’s great, sir. That’s all from mine and all the best for the coming quarter.
Anurag Choudhary
Thank you.
Operator
Thank you. Our next question comes from the line of Dhruvin Karakia from SKP Securities. Please go ahead.
Dhruvin Karakia
Hello sir. Congratulations. Great set of numbers. So I just wanted to begin with three small questions on our quarterly result and then I’ll join the queue. My first question is sir, with regards to our EBITDA per ton. Sir, so in this particular quarter when I did my calculations for EBITDA per ton, I have noticed that we’ve seen a decline on a sequential basis, you know, despite our revenues etc, which has seen a growth. So I wanted to understand the reason behind it. Second, I wanted to understand the sporadic increase in the total income in the other income.
Sorry, other income has almost grown by 290% on a year on year basis. And last question would be with respect to what are the tire sales that we’ve made for this particular quarter. That’s all.
Anurag Choudhary
So regarding EBITDA pattern, if you look at it, it is more or less in line because depending on quarter to quarter the number changes but it’s very minimum. So that is the level where it is more or less stabilized now for other income. So we have made investment in IBC in which we have made got this investment at a comparatively much lower cost. So some valuation has been done as per the accounting standard because of which there has been some increase in the other income other than the investments that we have made.
So if you look at we have borrowed significant amount of money at the same time we have invested in banks so that interest is also there.
Dhruvin Karakia
Okay sir. And last was regarding tire sales for this particular quarter. Like where do we stand currently and how much do we expect to end the year in terms of our Bella Tires revenue wise.
Anurag Choudhary
So revenue wise we have the current quarter. We have already achieved 60 plus crore of revenue. And looking forward, looking forward we expect the momentum to strengthen further. And this from the next year you will see capacity ramp up taking place in Bella Tires.
Dhruvin Karakia
All right, thank you so much. I’ll join the queue. Thank you.
Operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star N1 on the Touchstone telephone. Our next question come from the line of Smarten from Money Stories Asset Management. Please go ahead
Unidentified Participant
Hello, Good evening team. So my question was regarding the cashold capacity targeting. So since we’re targeting about to cater about 100 gigawatt worth of cathode, is it that we expect a huge market share in India and globally or is it that we’re trying to capture the huge size of a small market?
Anurag Choudhary
Your. Your question is not clear. Can you repeat it please?
Unidentified Participant
Okay, so I was asking about the cathode capacity which we are targeting which is about 100 gigawatt worth of gigawatt per half which we’re targeting. Right. So is it that we’re expecting a huge market or is it that we are trying to capture a huge market share? So I wanted to understand which one is it?
Anurag Choudhary
So it’s not that we are going to capture huge market share. FY30 the global lithium ion cell capacity will be 8,000 plus and by that time we are only targeting 100 which is absolutely nothing in terms of global demand. So actually first time Himadri is going to be in a product where demand will not be a constraint. So growth will depend upon our ability to expand. So this will be a unique positioning for the company.
Unidentified Participant
Okay, got it. And how do you place ourselves in terms of cost competitiveness within India or else comparatively to China as well.
Anurag Choudhary
Will be very much cost competitive to any geography in the world.
Unidentified Participant
Okay, just one last question. Was that where do you, how are you planning on your sourcing of raw materials for the lithium ion?
Anurag Choudhary
How much.
Unidentified Participant
How are you planning on sourcing your raw material for the cathode?
Anurag Choudhary
So we’ll be sourcing from the global market including Latin America, Australia, China. So wherever we get the best which will get the raw material. So
Unidentified Participant
Okay, thank you. That’s all from my side. All the best.
Operator
Thank you. Our next question come from the line of Pratiksha from Investing Alpha. Please go ahead.
Unidentified Participant
Hello. Hello sir. Am I audible?
Operator
Yes sir, you are. Please go ahead with the question.
Unidentified Participant
Yeah, thank you for the opportunity. So my first question is on the post recent warrant conversion. How does management view equity dilution going forward? Will future growth be primarily, primarily debt funded or accrual driven?
Anurag Choudhary
So the entire growth which is going to come for next 3, 4 years are from internal accrual. So there is going to be no dilution as far as himad is concerned. So if you look at shareholding also in last three years we have increased our stake by 10%.
Unidentified Participant
Right.
Anurag Choudhary
So don’t see any dilution coming forward. And there will be no debt which will be taken. It will be internal.
Unidentified Participant
Great, great. Okay. And so my second question is what are the key execution risk during the ramp up face at Mahastikri? And how is management ensuring that quality consistent is maintained by scaling volumes?
Anurag Choudhary
We have a very strong SOP for the projects and for operations. So which ensures that under no circumstances there is any impact or contamination from the ongoing projects. Ensures there is no problem as far as the quality or consistencies concerned.
Unidentified Participant
Okay, got it. And so one last question. Historically, how long has it taken for Himadri to ramp up specialty capacity to you know, optimal utilization? And should we expect a you know, similar or shorter curve for the new facility as well?
Anurag Choudhary
Yes, definitely. To ramp up to the capacity it will take around three to six months.
Unidentified Participant
Okay. Okay. Got it sir. Thank you.
Operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star and one on the touchstone telephone. Our next question come from the line of Ishani Jen from MAS Capital. Please go ahead.
Ishani Jen
Hello sir, my question to you is like with energy being a significant input, so what proportion of power is sourced internally or like through long term agreements? And how does this insulin margins?
Anurag Choudhary
So we source 100% of power through our best heat gas capturing plant where we generally convert gas into power. So Himadri is using clean power for all its operations.
Ishani Jen
Okay. Okay sir, got it. Also like at what stage does management gain confidence to commit capex in energy materials? But it means post customer qualifications or post binding of take agreements.
Anurag Choudhary
We don’t wait for binding of take agreement. We have full confidence in our quality and our customer relationship. So with the qualification we start setting up the capacity. So qualification process in the same time we are setting up the capacity because unless you have the full plant, commercial plant, you will never get approvals.
Ishani Jen
Okay sir. Also my last question will be like in specialty carbon black, how much of the recent sizing has been formula linked versus like a negotiated contract?
Anurag Choudhary
So it depends on customers to customer. I cannot disclose the pricing policy, but yeah, but I can tell you specialty carbon black has a much better margin than commodity black and Himadi specializes in this segment.
Ishani Jen
Okay sir, got your point. Thank you.
Operator
Thank you. Our next question comes from the line of Viraj Sanghvi from Asit Koticha family office. Please go ahead.
Unidentified Participant
Am I audible? Yes. Yes sir, you are. Yes. So we have seen some fall in ebitda per tonne on quarter. On quarter basis. So is this to do with some change in product mix? Because we have also expanded the coal tar distillation capacity by 1 lakh metric tons. So is. Is that the reason there’s Some fall in EBITDA per kg.
Anurag Choudhary
If you see there is a hardly means it was 1700. 900 has come to 16,000 something. So there’s not been much difference. So you will find this kind of variation on a positive or negative sign on quarter, on quarter basis. But this doesn’t have any significant importance or significance.
Unidentified Participant
Okay, got it. And this polter distillation facility that that we have expanded by 1 lakh metric tons, what is the utilization for that in this quarter?
Anurag Choudhary
No, no, this, this we have just started. So over the next two to three quarters you will see the ramp up happening. So it will take Q1 effort, FY27. You will see the ramp up happening.
Unidentified Participant
Okay. And what about the specialty black capacity that we were to expand from 60,000 to?
Anurag Choudhary
Yes, you will see that you will see the ramp up happening from the next financial year. Q. Okay, there will be some ramp up happening but you will see the results, full results coming from in the next financial year.
Unidentified Participant
Got it. And from the Birla tire business, what sort of EBITDA margin are we making on the 16 crore revenues for the quarter?
Anurag Choudhary
So currently in our since we are selling so we have a partnership with Dalmia Refractive Bharat limited in Birla tires. So in Himadri and Himadri Clean Energy we are buying from Darmia Refactory and selling the billet tires. So we don’t have any positive or negative impact as such as of now. But looking forward, the things will change.
Unidentified Participant
Okay, good. That’s it from my side.
Operator
Thank you. Our next question come from the line of Animesh Jain from Dalal and brochure please go ahead.
Animesh Jain
Yeah. Hi sir. Thank you for the opportunity. I just wanted to understand that with the fluctuations that are expected in lithium prices going forward, how do we see that affect our margins? Will we be absorbing those or will we see that as a pass through for us? Yeah. Thank you.
Anurag Choudhary
See the kind of fluctuation which is there in lithium, it can never be absorbed. So all the customers will be having a pass through model. Means the pricing up and down will be transferred to the customer. Same business model we follow with our existing products. Also like for Colta pitch or carbon black. So same build follow for lithium also.
Animesh Jain
Okay, so so that would be a full pass through, right?
Anurag Choudhary
Yes, is a full pass.
Animesh Jain
Okay. And so my next question would be on our cathode facility, how would we see a ramble, how would we see utilizations going forward for the next one or two years?
Anurag Choudhary
So next one or two years there will not Be significant ramp utilization. I see utilization coming in. Some utilization will be there in FY28, but yes, big utilization will come in FY29.
Animesh Jain
Okay, answer. And 29, what kind of assets?
Anurag Choudhary
If you ask me, FY29, I see full capacity utilization.
Animesh Jain
Okay, so what kind of asset turn would be we looking at at full capacity utilization.
Anurag Choudhary
2+.
Animesh Jain
All right. All right. Okay. Thank you sir.
Operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star n1 on their touch on telephone. Our next question comes from the line of driven Karakia from SKP securities. Please go ahead.
Dhruvin Karakia
So my question was regarding our traditional the coal tar pitch business. So just wanted to understand from an industry perspective or from a business perspective, how do you expect them going forward? Like is it becoming structurally declining or do you still see it like a very significant growth driver for your cash flow generation?
Anurag Choudhary
That model has really matured over the last five years. And we expect the business to have sustainable profitability because we have done a lot of work in terms of operational efficiencies, waste heat recovery system, improvement of yield. And these are giving us long term sustainable profitability.
Dhruvin Karakia
Okay, so my last question would be regarding to our recent specialty carbon black expansion that we have done. Just wanted to understand like on a year on year basis, how what is the trend of this capacity utilization? Like on a year on year basis, how do we expect this capacity utilization to increase? If you could give like a 1, 2, 3 year breakup if possible.
Anurag Choudhary
So for the next year you can look at around 85% capacity utilization for special Eddy government.
Dhruvin Karakia
Okay. And post that we are like almost 190, 500% types.
Anurag Choudhary
Yes. Yes.
Dhruvin Karakia
All right, so that’ll be all. Thank you so much.
Anurag Choudhary
Thank
Dhruvin Karakia
You.
Operator
Thank you. Our next question come from the line of Preeti Agarwal from SKS Associates. Please go ahead.
Priti Agarwal
Yeah, thank you so much for the opportunity and also congratulations on the new Mangalore port. I wanted to know that is this new port going to focus on Middle east itself or can we, you know, expect more geography diversions such as Africa?
Anurag Choudhary
So this will be mainly focused on Middle east only because of the proximity to Middle East. And for other geographies we already have Haldia Port to cater to that.
Unidentified Participant
Understood.
Priti Agarwal
And the research and development investments remain elevated. So how should investors assess returns on this bent? Like are there defined KPIs or commercialization timelines that you know are being targeted?
Anurag Choudhary
R and D has been the core of the company for years now.
Rohan Baranwal
So we
Anurag Choudhary
Are one of the companies in India who spend lot of money on research and development and innovation. And this has only brought us to a place where we are in terms of not only product process and technology but it goes much beyond that. So for Himadri we are currently also we are working on many new products. And in next one year to two years we’ll see lot of new announcements for commercialization coming in for high value added products.
Unidentified Participant
So
Anurag Choudhary
In our case R and D is not only academic thing with no KPI with. You know we have defined our. In our R and D we have defined the performance metrics in a very articulated manner. Which means within a time frame, given time frame, you have to achieve a particular result and it cannot be ever ending project. And that is the biggest strength of the company. All our technologies in Himadri has been developed in house. That’s the beauty of the company. We have not bought any technology from any technology supplier for any of our products.
So looking forward also you will come across lot of new products coming in next two to three years.
Priti Agarwal
And also can you give an update on the new tire launch on Birla tire segment? Like are we diversifying from the passenger car radical and also what is your long term plan for this?
Anurag Choudhary
Birla tyre currently is not into passenger car tires. Birla tires basically was into TBB segment, bias segment and little bit in agriculture and has good some position in mining tires. So what we are doing, we are strengthening and expanding our OTR OHT segment. So idea is that over the next three to five years we will have significant presence from Bilaters in these two segments. And that is how we are revamping, modernizing, making automation, getting new machineries, getting the right people, all the resources in place in Bila tires.
In addition to that in future we will be launching passenger car tires which will be focused on SUV and ev.
Ishani Jen
Understood? Yeah, that’s it. From my side. Thank you so much.
Anurag Choudhary
Thank you.
Operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. Our next question come from the line of Rohan Baranwal from Arian Capital. Please go ahead.
Rohan Baranwal
Hello sir, as you’ve shared the details on the demand of Cathode.
Anurag Choudhary
Actually my line got disconnected. My line got disconnected. I was not able to listen to your question. Can you please repeat it?
Rohan Baranwal
Sure sir. That question was on the side of Cathode, sir. So the demand of globally and domestically. So what is the demand scenario on the Anode side Sir? Like on the global to share it. But his expectation domestically notes and else.
Anurag Choudhary
Your Question is on cathode or anode.
Rohan Baranwal
So like what is the demand expectation for anode domestically? Sir,
Anurag Choudhary
Anode not cathode.
Rohan Baranwal
Yes, anode.
Anurag Choudhary
So see Himadri is going is positioning itself in a new age industry. For the first time we are going to be in a business where demand will not be a constraint. See till now we have been in an industry where demand has always been the deciding factor for our expansion. And that’s a limiting factor when it comes to lithium ion cell industry. So the growth is exponential. And in the next three years there has to be significant growth in terms of cell manufacturing capacity. And first time in our entire career that we are going to address a market where demand will not be a constraint for either anode or cathode.
Anode consumption will be higher than cathode. Because lfp, I am talking particularly in terms of absolute volume. Cathode is two times of anode. But anode is used in all the chemistries. Unlike cathode, cathode has different chemistry. CLA for electronics, NMC is part of the chemistry. Then LFP is there. So each chemistry has their own market share. LFP market is increasing every day. But cathode remains constant throughout this chemistry whichever chemistry is being used. So anode being is constant.
So anode demand is very strong in India and globally.
Rohan Baranwal
Okay sir, and so my second question was on. So you, you’ve done your first shipment to Middle east. So we can see the demand from Middle east side to be strong. What is the expect, what is the scenario in the other parts of the world like as we the European region has faced energy cost crisis and because that the peer companies like was. So how do you, how you are able to benefit from that?
Anurag Choudhary
We, we are not at all focused on European market. We have clean focus on Middle east market. Because after China middle is the single. Middle east is the single largest manufacturing base for aluminum industry. And Himadri is well positioned to cater to meet their requirement. So our focus is clear. We don’t want to go to Europe as far as Kolta pitch is concerned.
Rohan Baranwal
Got it sir. Thank you.
Operator
Thank you. Our next question come from the line of Disha from Sapphire Capital. Please go ahead.
Disha
No.
Divyansh Thakur
Yes
Operator
Please. Yes you are.
Disha
Yeah. So for the, for this battery expansion that we are planning what sort of EBITDA margins do we see here and how does that differ from our regular business?
Anurag Choudhary
See for looking at Himadri, I’ll give you a very you know basic thumb rule. What we look at in our company at board level that we have you Know what is the return on capital employed? If you look at my existing business, the return on capital employed is 34%. So capital allocation is very, very critical and important metrics for us in Himadri. So we do not allocate capital to any business where ROC is less than 30%. That is the main object and basis that principle, all our investment is guided.
Disha
Okay. All right. And for the this phase one I think is coming by Q3FY27, right?
Anurag Choudhary
Yes, yes, yes. But don’t expect any ramp up or capacity utilization in next one and a half years.
Disha
Okay, so then I think from beginning FY29.
Anurag Choudhary
Yeah, yeah, that’s what I gave a clear guidance. FY29 will be the year for LFP.
Disha
And how much are we, what is the capex that we’re spending for phase one?
Anurag Choudhary
1125 crores.
Disha
1125 crores and asset turn up around. I think you said to more than two x. Right?
Anurag Choudhary
Two plus two plus. Okay.
Disha
Okay, that’s it. From my side. Thank you.
Unidentified Participant
Thank you.
Operator
Thank you. Our next question come from the line of Yashwant Gotipati from KR Choksi Securities. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Anurag Choudhary
Yes. Yes sir,
Operator
You are.
Unidentified Participant
Yeah. So. Good evening sir. My question is regarding anode materials. So if you can give us the numbers for the CapEx that we are going to,
Unidentified Participant
You
Unidentified Participant
Know, undergo for this anode material development. What is the capacity and what is the premium which you know, we’ll be charging over products such as performance driven anode materials. So if you can show some light over that whole anode project.
Anurag Choudhary
I was not able to listen to a question. My light got disconnected. Can you please repeat it?
Unidentified Participant
Okay, so my question was regarding the anode materials project. So if you can give us some numbers regarding the capex for that anode material development, the capacity which would come live as well as the premium of which we would be charging a rough estimate for anode material over the normal synthetic composite graphite.
Anurag Choudhary
First of all, we have not announced any CAPEX as of today on anode material. So we are in the process of finalization. Once we finalize, we’ll come up with the capacity number and the capex.
Unidentified Participant
Okay? Okay, understood. And roughly, I mean the premiumization, how much percentage would be, you know, a ballpark number for carbon silicon composites which we would be catering to performance driven applications over the cost driven applications.
Anurag Choudhary
So there is no point discussing the premium as I told you, because we have knowing the premium you will not be able to calculate anything unless you Know the capacity and so you can Google it and you will get the selling price of silicon carbon compared to synthetic carbon.
Unidentified Participant
Okay? Okay, understood. So yeah, that, that will be all from my side. Thank you.
Anurag Choudhary
Thank you.
Operator
Thank you. Our next question comes from the line of Devanshi Shah from HUF Capital. Please go ahead.
Devanshi Shah
Hi. Thank you for the opportunity. So I wanted to understand how does Himadi’s cost structure and technology roadmap compare with established Chinese players in LFP and Anode and where does the management see its competitive mode?
Anurag Choudhary
See in China, if you look at LFP chemistry, it has really evolved over the last five years. The work has been going over the last 15, 18 years but the ramp up of volume has taken really place in last four years. And the advantage of HIMADRI is that we have been in this industry for last 17 to 18 years. If you go back and look out at our annual reports, we have been talking about lithium ion batteries from the day when no one was even knowing about lithium ion batteries. Not much people were knowing.
So that time we had a vision that lithium ion battery is something which is going to be a game changer for future. There were many chemistries, the best thing is there were still many chemistries, but at that point of time, 18 years back to point out that yes, this chemistry is going to the game changer is a bit today everyone can say, but 18 years back to tell this thing was a big thing. So that is what we did. And I have been personally engaged and very closely monitoring the development of raw material component of this industry over the last many, many years.
So I have very strong relationship and very strong team which is working on it. And we are absolutely confident will be very strong in terms of our quality of the product, specifications to meet the requirement of the customers and very much competitive. Plus we have the India advantage compared to our peers in the other geography.
Devanshi Shah
Right sir, Got it. That was helpful. Also, could you share insights on demand trends across key export geographies such as Europe, us, Asia, particularly in the context of global industrial slowdown and inventory normalization.
Anurag Choudhary
By the time our product comes, all the inventory normalization in fact in LFP has already happened. If you see the correction of lithium ion prices has corrected 75% over the last two and a half years, two and a half, three years
Unidentified Participant
By
Anurag Choudhary
75% all inventory in write off correction, all those things has already happened. There’s nothing left to be corrected. So now there will be fair competition which is going to be there and global demand is global capacity of lithium ion battery. Cells is going to be on 7500 to 8000 GWh from current 2500. This gives a huge, you know, possibility for huge ramping up of capacities and huge demand for cathode and anode material. And company will be producing the best in quality meeting all the global standards will outline others that is coming out very clear because the single factor for meeting the requirement of this huge growth which is coming build the raw material component.
So everyone is cell capacity but raw material is limited. So that will be a single critical factor which will be the game changer. And HIMADRI has through, you know what makes Himadi different and in terms of lithium ion capacities also capabilities. Also if you look at our R and D setup, we have joined hand with CUNA having facility in Australia. Our team is working hand in hand with the CUNA team for new developments. We have taken a stake in international battery company headquartered in California having a state of art AI based research and development center in California and a manufacturing facility in South Korea for cell manufacturing.
And they are working on HIMADRI components for making cells. So they have already launched Trouble 1000 a prismatic safe cell using NMC and anode material. Now they are going to launch Trouble 2000 which is using HIMADRI anode material and Himadri lithium ion phosphate. So this gives Himadi a unique positioning compared to any of the peers globally where we have. We just. We don’t have only the, you know, laboratory capabilities. We have the full fledged cell manufacturing facility available in South Korea where you can practically see the cell being manufactured.
So it’s no longer a laboratory type thing. We are talking. In addition to that double 3,000 will be launched which will be using silicon carbon made by Himadri. So this gives HIMADRI a unique positioning and the first mover’s advantage in this industry. Being in this industry for so many years. It’s not that today everyone is talking about lithium ion batteries. So we have started lithium ion batteries.
Devanshi Shah
Got it sir. Understood. Thank you very much and all the best.
Anurag Choudhary
Thank you.
Operator
Thank you ladies and gentlemen. That was the last question for today. I would like to hand the conference over to Mr. Anurag Choudhary for closing comments. Thank you. And over to you sir.
Anurag Choudhary
Thank you Chirag. Thank you everyone for joining the Q3FY26 nine month conference call of Himadi Specialty Chemical Limited. We appreciate your time, continued interest and engagement and hope we have addressed your queries satisfactory at himadvi. Our focus remains firmly on creating sustainable long term value for all our stakeholders. We are deeply committed to our transformational journey driven by high quality products, disciplined execution and an unwavering emphasis on innovation, environmental responsibility and health and safety.
We are confident that the strategic direction outlined today will continue to support resilient growth and deliver enduring value. Before we conclude, I would like to once again thank our team members, partners, investors, for their trust and continued support. Could you require any further information, Please feel free to reach out to our investor relationship advisor, Mutual fg. In time, ir. Thank you. Have a good day.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Himadri Specialty Chemical Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.