Himadri Speciality Chemical Ltd (NSE: HSCL) Q4 2025 Earnings Call dated Apr. 29, 2025
Corporate Participants:
Anurag Choudhary — Chairman, Managing Director & Chief Executive Officer
Kamlesh Kumar Agarwal — Chief Financial Officer
Analysts:
Bhavya Shah — Analyst
Sanjesh Jain — Analyst
Aditya Khetan — Analyst
Unidentified Participant
Shreya Banthia — Analyst
Prit Nagersheth — Analyst
Rudransh Kalra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Himadri Specialty Chemical Limited hosted by MUFG End Time.
As a reminder all participant line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Bhavya Shah from MUFG end time. Thank you and over to you sir.
Bhavya Shah — Analyst
Thank you. Welcome to the Q4 and FY25 earnings conference call. Today on the call we have with us Mr. Anurag Chowdhury, CMD and CEO, Mr. Shobhmesh EVP Tire and Strategy and Mr. Kamlee Sagarwal, CFO.
This conference call may contain forward looking statements about the company which are based on beliefs, opinion and expectations. As of today, actual results may differ materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Our detailed safe harbor statement is given on page two of Investor Presentation of. The company which has been uploaded on the stock exchange and company website.With this I now hand over the call to Mr. Anurag Chowdhai. Over to you sir.
Anurag Choudhary — Chairman, Managing Director & Chief Executive Officer
Thank you Bhavya Good evening ladies and gentlemen. I would like to welcome you all to the Q4FY25 earning call of Himadish Specialty Chemical Limited. It’s a pleasure to connect with you and share insights into our business strategy and outlook. More importantly, it’s a moment of significance for us to reconnect and share the incredible journey we have been on.
A journey marked by transformation and a deep rooted purpose. It started over three decades ago with a single minded vision to create impact through innovation. What started as a small polta distillation unit in 1990 has today evolved into a global leader in specialty chemicals and new energy materials. At the heart of this evolution is our relentless focus on research and development, our belief in sustainable growth and an unwavering commitment to deliver quality and value across everything we do.
We have, through relentless efforts, research and development and innovation over the last 35 years developed a very strong, sustainable and growing business model. Today we supply high quality tailor made Kolta pitch to our customers at most economical cost. Globally this provides a strong value proposition and significant cost advantage for our customers.
Our commitment to delivering the highest standards of quality results in sustainable economic savings for our customers, thereby strengthening our collaboration and reinforcing our relationship. Through incremental improvements in operational efficiencies and yields, we have successfully reduced costs and generated substantial long term margins. By optimizing energy consumption and leveraging artificial intelligence capabilities across our operations, we have streamlined our processes over the years.
We have built an integrated business model that spans across carbon value chain right from coal, tapich speciality, carbon black and new material to high value added derivatives like Naphthalene, snf, PC. Our pioneering work in specialty pitches for defense applications such as long range missiles has demonstrated not only our R and D capability but also our ability to innovate for greater good.
Similarly, our developments in areas of lithium, iron phosphate, cathode, active material, anode material, circular economy products, treated blacks, conductive blacks and zero impurity speech are testament to our innovative mindset and drive. What differentiates Himadri. Today is the depth of our integration, the scale of our capabilities and the strategic move we have and are making, each one thoroughly placed to address emerging industry trends and needs. Our products are today available in almost 56 countries serving multiple critical industries including lithium ion batteries, EV, aluminium, graphite, tire inks, construction, plastics, paints and many more. During this financial year, Himarsee was conferred with Company of the Year among the listed companies at India Camp 2024 which was organized by Ministry of Chemicals and Petrochemicals in partnership with Ficci and eny. Moreover, we were also awarded with the Det Khudun Award for outstanding contribution to India’s Manufacturing Economy at India Manufacturing Excellence Award 2025. This journey of growth has not been just about scale, it’s about transformation. We have embraced the future through automation, AI LED analytics and process standardization and optimization. We have transitioned into a truly data driven enterprise and our commitment to sustainability has been recognized globally from being awarded with Ecoworthies Platinum Metal which places us in top 1% globally for sustainability practices to earning a commendable B rating in our very first CDP assessment for 2024 which is indicative of company that is taking coordinated action on addressing environmental issues from a social lens. Our efforts are recognized with Himadri bagging the prestigious golden picket award for HR excellence 2024 at IOD 19th international conference. In terms of execution, we continue to deliver on scale and strategy at Singur. Our work on brownfield expansion of specialty carbon Black line from 60,000 metric ton per annum to one 30,000 metric ton per annum is progressing as planned and is expected to be operational by Q3 FY26. This will take our overall carbon deck capacity from 1,80,000 metric ton per annum to 2.50,000 metric ton per annum which will make this is the single largest site for specialty carbon black facility in the world. This expense will cater to the rapidly growing demand in specialty fiber blacks, conductive blacks, inks, plastics coatings and battery segments, further strengthening our position as a global leader in this high value added segment. To enhance our value added specialty product portfolio, we are once again forward integrating to set up capacity to manufacture and particular. And carbazole from our existing oils, a testament to our prudent strategy and innovative mindset. These products are essential ingredients for dyes, pigments, pharmaceuticals and electronic industries and will add significant value across our value chain. These products are currently largely imported in India and our objective is clear to substitute imports with world class domestic manufacturing and offer competitive global solutions. The high value added specialized product line is scheduled to go on live in Q2FY27. On the logistics and export front, the commissioning of our dedicated liquid coal tapas terminal at Haldia has opened new doors for global markets. In fact, our first export shipment was successfully dispatched in October 2024, a defining moment that paves the way for large scale international equipment supply. We have also made significant progress post our acquisition of Bella Tires as a strategic partner along with resolution applicant Dalmia Bharat Refractories Ltd. This strategic entry into tire manufacturing industry may look just like another example of forward integration for Himatri owing to our rich legacy of working with carbon blacks. However, it is important to note that Himazdi will not be selling any carbon back to Billa Tires. Birla tyre will be able to source carbon black at much more economical rate from other suppliers and Himadi will continue to tap into significant value added market it has carved for its offerings in carbon black. Segment. Modernization and VMMPing efforts are well underway with operations set to begin in phases. Starting end of Q1FY26 we will focus on building a comprehensive product portfolio of specialty tyres to serve off highway tyre segment. Simultaneously we are working on installation of our passenger car radial tyre unit which will take some time. This unit will have a strong focus on producing PCR tires catered to meet the needs of EVs SUV segment vehicles. We intend to lead the global e mobility revolution by innovating next generation tires that can meet the evolving demands of a sustainable future. Catering to domestic as well as global demands. Our most transformational journey is now unfolding in field of lithium ion battery components, a space critical to energy transition. The global lithium ion battery market has experienced significant growth reaching an estimated 97.88 billion in calendar year 2024 and is projected to grow at. At a CAGR of 14.58% over the next five years. India’s lithium ion battery market too is experiencing rapid expansion and projections estimates growth from US$4.47 billion in 24 to US$16.09 billion in 2030, reflecting a CAGR of 23%. Moreover, the global EV market experienced significant growth, attaining a market size of $396.4 billion in 2024. This expansion has been fueled by multiple key factors including increasing environmental awareness, advancement in battery technology, government initiatives supporting EV adoption Battery demand in India is expected to rise to 260 gigawatt hour by 2030, driven by escalating adoption of EV and renewable energy storage Systems. India registered 8% penetration rate of EV in 2024, which was 6.5% in 2023. This traction is becoming more and more prominent with domestic producers TATA announcing launch of premium yet affordable EV in this year and two giants Tesla and BYD actively pursuing the EV car production plan in India. We are well on our way to EV30 at the rate 30 which aims to see about 80 million EVs on road by 2030. Indian government is also shaping the energy storage policy and regulatory framework to boost energy storage in the country. Apart from incentives to battery and carmakers, Government of India has been proactively taking progressive states such as exemption of customs duty on imports of machinery and equipment, GST reduction, waiver of road tax that are aimed at making the EV growth smooth and their proposition economically attractive to the masses. Across major use cases, lithium ion battery technology has established itself as a dominant technology owing to their marquee edge over other battery chemistries such as sodium ion in terms of critical parameters such as energy density, cycle life, charging time, reliability and portability. Recognizing that cathode materials account for over half the cost of lithium ion battery, we are positioning HIMAT at the heart of global clean energy movement. By 2030, global demand for lithium ion cathode material is expected to exceed 9 million tonnes annually. Lithium ion phosphate batteries have emerged as a dominant battery technology in China’s EV market according to over 60% of EV battery installation in 2024 alone. The share of LFP battery technology in the cumulative battery installation of China around 75%, up from 51.5% from the previous years. The exponential growth of electric vehicles and grid scale energy storage system has propelled lithium ion phosphate batteries to the forefront of global demand. With over 70% of the automakers around the world now exploring LFP chemistry for the next generation models and to meet this growing demand we are establishing first commercial plant of LFP cathode active material globally outside China. Our vision is to build a capacity of 200,000 metric ton per annum of LFP cathode active material plant sufficient to power 100 gigawatt per hour of lithium ion batteries with the first phase of 40,000 metric tons per annum expected to be operational by Q3FY27. For us this is more than a business opportunity, it’s a national building effort aligned with India’s Atman Nirbhar Bharat vision and its decarbonization goals. While cathode takes the center stage, our research and development team are also making remarkable strides in working on anode chemistry. From natural, synthetic and hybrid anode material to next generation silicon carbon for anodes, we are exploring every viable chemistry to improve battery performance, density and charging time. In line with this, our collaboration with Shekhona, driven by shared vision and synergies, has enabled us to accelerate the development cycle for silicon carbon anodes in a very short span of time. Our belief is simple battery breakthroughs won’t just come from one component, but from a holistic mastery of the ecosystem. And as we innovate we are also thinking ahead. The proliferation of lithium ion batteries in the coming decade brings with it a new challenge, safe disposal and material recovery. I am pleased to share that our team are already exploring solutions in this domain and showing himad list not just in creation but also in circularity. At the same time we are also working on developing technology to recycle different types of waste materials such as end of life tires, used engine oil, lubricating oil, cooking oil to produce value added products to build a circular economy. Beyond batteries, our ambition extends into leveraging nanotechnology, an area we believe will be a true game changer across multiple industries. Leveraging our collaboration with Invati Himadri team is working day and night to undertake development of disruptive solutions in domain of battery materials and technology. At the same time we are also working on exploring niche use of this technology for crafting solutions in domain of agriculture, human and animal health. At the core of everything we do believe. Is that the future will be shaped by those who can align industrial ambition with environmental responsibility. At Himadri, we are anchoring our growth in this philosophy. Whether it’s expanding into new markets, investing in technology or building new capabilities. Our actions are rooted in a desire to create long term value responsibly and purposefully. Every decision we have made, whether it is forward integrating into value added chemicals, entering the tire industry or building the new energy material platform, has been set by dual mandate to elevate India’s industrial capabilities and to lead global change in sustainable manufacturing. By combining our deep value chain and expertise with frontier innovation, Himaji is not just responding to the needs and demands of a changing world, we are helping to shape it. And we are doing so with the confidence that we are building an organization that will deliver sustained value to all our stakeholders, shareholders, customers, communities and the planet. My humble request is for you to kindly go through our investors presentation in details as it covers all the aspects of our business. With that, I would like to hand over the proceedings to our CFO Mr. Kamlesh Agarwal to walk you through the financial performance in details. Kamlesh.
Kamlesh Kumar Agarwal — Chief Financial Officer
Thank you Anuragi Good evening everyone 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. Over the last five years we have demonstrated a consistent and robust financial performance reflecting the strength of our strategic focus and execution.
Since FY 2021, our revenues have grown at an impressive CAGR of 29%. More significantly, our EBITDA has expanded at a CAGR of 60% and our profit after tax has grown at an exceptional 86% CAGR. These results are underpinned by enhanced focus on high value specialty products and by a steady rise in our sales volumes which have increased by 13% year on year during this period.
Now turning to the standalone financial highlights for the full year FY25 we closed the year with a strong performance across all key metrics. Our sales volumes grew by 16% to 5 52,206 metric tonnes, up from 4.75,582 metric tons in the previous year. This volume growth translated into a solid top line with total revenue reaching 4,596 crore, marking a 10% increase over FY24. Our focus on operational efficiency. And cost optimization helped drive ebitda higher by 33% which stood at 844 crores compared to 632 crores in the last year. Our EBITDA per ton reached rs15,276 per ton a 15% increase over FY24. At a bottom line, profit after tax rose by 36% to 558 crores as against 411cr in FY24. This results reinforce our ability to deliver consistent and profitable growth even amidst a dynamic market environment. In terms of financial health, we continue to maintain a resilient balance sheet. As of 31st March 2025, we hold a net positive cash balance of 371 crores which gives us ample flexibility to pursue growth opportunities while maintaining a prudent approach to capital. Alloc Our return on capital employed has also shown a steady upward trajectory reaching 34% in FY25 a testament to our sharp focus on value creation and capital efficiency. Share of rupee 1 each which represents 60% of the face value for the financial year 2024-25. This is subject to the approval of our shareholders. With these results, we believe we are well positioned to continue our upward trajectory building on a foundation of financial strength, operational excellence and strategic foresight. That’s all from our side. We will now open the lines for question answer.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handset 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 Sanjesh Jain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, Good afternoon sir. Thanks for taking my call. I got few questions. First on the volume growth for this quarter particularly last two quarters it has been declining. Any particular reason? There is a sudden pressure on the volume which has stopped growing.
Anurag Choudhary
No, nothing like that. See what is happening? We are focusing more on value added products. So when you focus on value added products the production volume comes down. The value. Is more. That is one of the reason. Other reason is that at the end of the financial year there was a shipment which was supposed to go which got deferred to next year. That was the main reason for little decline in the volume. Nothing else.
Sanjesh Jain
Got it, Got it. When we say that we are focusing more on value added product, the production is 50% almost is pitch. Right. Which is liquid which we generally sell for sell to the aluminium smelters. Apart from that we got the oils and other things. When we say we are focusing on value addition products, how should we see?
Anurag Choudhary
So value added products are naphthalene of high purity that we are making. That is one of the very critical product for us. And other than that, specialty carbon black. So when you convert from commodity to different grades of specialty, the volume comes down. So suppose a commodity product you are producing 100 tons. This facility will be only 70 tons. So that is one of the thing and depends on the which grade of specialty you are doing which. So that also the productivity changes. Okay, so since we are going in the value added items, that is the reason. But overall volume will again be normal in current year.
Sanjesh Jain
So in FY26, now that in last two three years have been super normal growth in terms of volume for us, do we expect the volume trajectory to hold on in FY26 as well?
Anurag Choudhary
Yeah, definitely. We expect the volume trajectory to hold on and grow further.
Sanjesh Jain
What’s the expectation for the growth in FY26 in terms of volume for us?
Anurag Choudhary
So total, if you look at our numbers, last year we did a PAT of 411 crores. This year we did a pat of on a standalone basis 558 crores. So by FY27 we expect a PAT of 800 plus course.
Sanjesh Jain
800 plus course of patented FY27.
Anurag Choudhary
Yes, yes.
Sanjesh Jain
Got it, Got it, got it. The follow up question is on the pitch. You did mention that we are looking for an export and we did a maiden shipment. How should we see the export opportunity in pitch?
Anurag Choudhary
The export opportunity is very bright. In pitch we are supplying material to different geographies. And in the current year we expect the volumes to ramp up.
Sanjesh Jain
And this will be in what geography?
Anurag Choudhary
It will be in all the geographies. Middle East, Southeast.
Sanjesh Jain
Okay. Southeast and Middle East. Largely now changing to the carbon black. One of your peer did mention announced the result. We have seen some amount of pressure on the spreads on the carbon black. Are we seeing any pressure on the carbon black for us or its specialty? So we are largely protected.
Anurag Choudhary
We are largely protected. Our very minimum volume goes to tyre industry so we are largely protected. From our side we don’t see any pressure.
Sanjesh Jain
So what is the large application?
Anurag Choudhary
So fiber black, conductive black, plastics, inks and coatings.
Sanjesh Jain
Got it, Got it. And on the tire business, can you help us understand where are we in the business commissioning? When should we see revenue coming up? Any thought process on our tire business?
Anurag Choudhary
Yes, yes. So we have been you know revamping the asset for last one year and the process is on. So we have already produced sample tires and have given for BIS approval and expecting the approval in next 25 to 30 days. Post that we will commence production in phases. First phase will be 1020 tonnes then we will gradually ramp up the production on a quarter on quarter basis.
Sanjesh Jain
Got it? Got it. So we should see some material revenue coming in from second half of this financial year. Will that be a fair assumption?
Anurag Choudhary
Yes, for second half this financial year you will see some revenue coming in But I think major revenue will start coming from the next year next year.
Sanjesh Jain
Got it, Got it. And any particular region we are focusing East India because we are closely placed there or it will be more like a Pan India launch.
Anurag Choudhary
No, it will be not a Pan India launch Because the volume we will be producing in first phase will be very small to launch in our Pan India basis we have selected five, six states in which we’ll be start launching the product. Post that once the production ramps up we will be introducing new states.
Sanjesh Jain
Any particular state you Want to highlight? 4, 5 State which is our priority as of now.
Anurag Choudhary
That the once we are going to launch I will indicate.
Sanjesh Jain
Got it? Got it. My last question is on the specialty value added product which we have announced a capex of 120crore what is the potential asset turn we are looking that.
Anurag Choudhary
Actually 220 crores.
Sanjesh Jain
Sorry.
Anurag Choudhary
We have for you are saying for the specialty carbon especially products.
Sanjesh Jain
No, no specialty product 120 crores of capex.
Anurag Choudhary
It is 1.8 or 2 is to.
Sanjesh Jain
So so almost 2x of the so 240 crore is the potential revenue this less oil right? The volume wise it will not change there will be more realization gain which will happen to us. That is the way.
Anurag Choudhary
So that today we are selling. In oil at suppose 40,000.
Sanjesh Jain
Correct.
Anurag Choudhary
This product will be very high value added product. So that will be. The extra margin will be deriving from this chemical.
Sanjesh Jain
Got it. Volume remaining the same. We will benefit from higher realization. Higher ebitda per kilogram.
Anurag Choudhary
Actually that is what we are doing.
Sanjesh Jain
Now that’s also visible. Now that we are on a probably one of the Highest EBITDA per kg we have hit what? 23 rupees EBITDA per kg. Do you think there is more scope to improve from here? Or we should stabilize over here. How should one see this?
Anurag Choudhary
We are on the full annual basis. We are on 15,276 rupees EBITDA per ton. On Q4 basis it is 17,008 rupees.
Sanjesh Jain
17 rupees. Correct. Correct. Sorry, my bad. 17.1.
Anurag Choudhary
And we are confident of maintaining this and strengthening it further.
Sanjesh Jain
Got it. Got it. There is no seasonality, right? It is. It is.
Anurag Choudhary
All business.
Sanjesh Jain
There is no seasonality in it. Correct. Great sir. So what is the capex number expected for FY26? Cash capex.
Anurag Choudhary
Cash capex will be around 600 to 700 crores.
Sanjesh Jain
FY26.
Anurag Choudhary
FY26 to internal accrual.
Sanjesh Jain
All internal accrual.
Anurag Choudhary
Yes.
Sanjesh Jain
Super sir, thanks. Thanks for taking all those questions so patiently and best of luck for the coming quarters.
Anurag Choudhary
Thank you so much.
Operator
Thank you. Before we take the next question a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Aditya Ketan from Smith Institutional Securities. Please go ahead.
Aditya Khetan
Yeah. Thank you for the opportunity, sir. My first question is. Sir, our total carbon black capacity stands at one point. So 180,000 tons. Out of this 60,000 tons is the specialty carbon black. So the remaining 1.2 lakh ton capacity. Now you mentioned to an earlier participant that we are not very concentrated on the tire sector. So this 1.2 lakh ton is basically the commoditized grade of carbon black. I. If I’m not wrong. So where are we selling this apart from the tire sector?
Anurag Choudhary
First thing on non tire sector there are different application which goes into in commodity also for plastics. For other applications there we are selling.
Aditya Khetan
Sir, for plastics. For all these.
Anurag Choudhary
Yeah.
Aditya Khetan
So for plastics and these applications. So specialty carbon black is used but the commodity goes to other.
Anurag Choudhary
They are different grades of carbon black which goes in. Same application in different grades are there. So some grades are commodity, some grades are specialty. So for like for MrG we are selling for profiles. We are selling for horses. We are selling for this conveyor belt. We are selling.
Aditya Khetan
Okay. Okay. Any particular number? If you can share how much end user concentration is to the tire sector. Like 10%, 20%, 30. Any sort of figure.
Anurag Choudhary
So tires in our case is less than 25%.
Aditya Khetan
Less than 25%. Okay sir, onto your new capex of the specialty carbon black which you are Planning to add 70,000 ton at a capex of 220 crore. Sir, I believe the replacement cost looks very lower in case when? When we look at our computer. So they are setting up a similar specialty carbon black line with the capex per ton of roughly around 90,000 rupees. We are setting it up at a cost of around 30,000 rupees per ton. Sir, why there is so stark difference in our complete CAPEX and our capex on a similar project like a specialty carbon blade. Any thoughts on this?
Anurag Choudhary
That is the strength of Himadri. In fact this question you should ask to the peer that is the strength of Himadri to converting a low CAPEX and a high ROC. That’s why our ROC is 34%.
Aditya Khetan
Okay. Any sort of a technological difference? Sir, can you highlight.
Anurag Choudhary
Difference is there? That’s why we are setting up such a big unit and will be the largest single site specialty carbon black plant in the world.
Aditya Khetan
Okay.
Anurag Choudhary
It’s basically integration.
Aditya Khetan
Okay. And any number if you can put like what sort of spreads do can we make on the specialty carbon black? And what are we making on our existing specialty carbon black line of 60,000 tons?
Anurag Choudhary
We don’t give product wide margin but to give you a broad number especially carbon black margin differs from 20,000 to 50,000 depending on what grade you are producing, what application you are selling to.
Aditya Khetan
Correct. And sir, where are we in this chain? Like so from 20 to 50. Any sort of a number if you can share.
Anurag Choudhary
So big number. We don’t say specifically for product wise but we are in this journey. We have started the journey five years back and I think there is a long way to go.
Aditya Khetan
Okay sir, any idea on what is the outlook for carbon black like for the next two to three years? Like considering because we are not much dependent on tire where we are witnessing material weakness. So other sectors, how are they expected to perform?
Anurag Choudhary
With our order book and our contractual agreements we are placed in a very good situation. For next two to three years. Clearly.
Aditya Khetan
Okay. So just one last question. You had mentioned in your. In your presentation that the Birla tires the requirement of carbon black will not be sourced from our facility. It would be from a third party player. Why is it so? Sir, any sort of like we are producing some higher grades. And we want to get some better realizations. As compared to like what Birla tire would be making a tire. Any thoughts? Like why are we not focused on the integration part here?
Anurag Choudhary
See for us every business has its own P and L. We don’t club P and L. So if Birla can get raw material at a better competitive rate. And Himadri is able to sell its carbon back at a premium rate and getting more value. There’s no point selling to build. So every business has its own vertical and look after their own balance. Pnl.
Aditya Khetan
Okay, sir, if I may ask further on this. So compared to like what you said we might get raw material at better prices. So what would be the difference in realization of R versus the competitor refining which we can source the raw material for? Bill attire.
Anurag Choudhary
So it’s not a fixed difference difference. It change on negotiation to negotiation. So till now we are able to get a very good price compared to what we are going to selling. We are selling in the market. And that is the reason we don’t want to sell to Bila tires.
Aditya Khetan
Okay. Got it, sir. Thank you. Sir, that’s it. From myself.
Anurag Choudhary
Thank you.
Operator
Thank you. The next question is from the line of Nestant Agrawal from Kohinoor Investments. Please go ahead.
Unidentified Participant
Hello. Can you hear me?
Anurag Choudhary
Yes. Yes, please.
Operator
I would request you to please use your handset.
Unidentified Participant
Yeah, I’m on the handset. I’ll switch off my speaker. This is Nishant Agarwal here. Sir, I would like to know one is the PLI scheme or have you applied for the PLI scheme?
Anurag Choudhary
So Nishant, for us there is no PLI scheme as on date. The PLI scheme is for advanced cell manufacturing. So the companies who are setting up a cell facility they have applied and have been allocated by the government. In that there is a condition that you have to localize your procurement. And that percentage will increase year on year. That is how the benefit will pass to component manufacturers like Himadri.
Unidentified Participant
Okay. So in the future are we going in for battery manufacturing as well?
Anurag Choudhary
No. No. No way. We want to focus on. Components, that is our business. That is where we have done all the efforts, R and D innovation and cell manufacturing is not our code and will not go for cell manufacturing.
Unidentified Participant
Okay, and next is the entire division. As we can see, all other companies, EBITDA margin or profit margins are in the range of 10 to 12%. So we’ll be competing with them. And our margins are supposed to be in those range or are we going to be a little better than those companies?
Anurag Choudhary
See, I think it’s too preliminary to predict the margins now. Let one or two quarter go, let’s see how we perform and then I’ll be able to give right numbers.
Unidentified Participant
Okay, so our total capacity for the tire division in case next year we are running full fledged. What would be the revenue sir, from that?
Anurag Choudhary
I. We. I don’t think we’ll be running full fledged next year. So total capacity as on date is 400tpd in different types of tires. And we expect to ramp this up in next three to four years time.
Unidentified Participant
Oh, three to four years time. Okay.
Anurag Choudhary
Yes, yes.
Unidentified Participant
Thank you so much. That’s from my side. Thank you.
Operator
Thank you. The next question is from the line of Shreya from Oaklan Capital Management llp. Please go ahead.
Shreya Banthia
Good evening sir. Am I audible?
Operator
Ma’am, I would request please use your handset.
Shreya Banthia
Yeah, I’m using a handset. Am I audible?
Anurag Choudhary
Yes, yes. Please go ahead.
Shreya Banthia
Yes. So I’m new to the company, so just wanted to understand. You said that our volume in your prior comment you said the volumes have come down because we have moving towards the value added product. However, if I do a simple math of the total revenue divided by the volume, my per unit price realization is coming down. So can you just help me how to look at this number?
Anurag Choudhary
So the raw material prices have also come down. So the selling price is a derivative of raw material prices. So that is the reason the prices have come down. Second, what is happening that when we go for value added products it is not significant in terms of volume but in terms of profitability it is very significant. So it adds more to your bottom line rather than the contribution to top line.
And the commodity material quantity reduces. That is the reason. And plus in this year our one shipment was deferred in the end of the march which resulted in some reduction in volume compared to quarter on quarter. But if you see on a whole year basis there’s been significant improvement of 13%.
Shreya Banthia
Yes, yes. The volume has increased on year on year. So that, that. That’s where my question was coming from. So any sense of how much does the raw material prices they have cooled off how much?
Anurag Choudhary
So if you look at FY24, the cost of goods sold were 63,822, 820. This year it is 57,080. So it has come down by 10%.
Shreya Banthia
Okay, thank you.
Operator
Thank you. The next question is from the line of breath from wealth and wiser.
Prit Nagersheth
Yes. So sir, my question is more regarding the macro aspect of Russia. I mean I believe that the reason the carbon black market has done very well is because the sanction on Russia came in and a lot of materials started getting exported to Europe which allowed even domestic market to do well. In the eventuality whether if that changes, how will that impact our company? Could you please shed some light on that?
Anurag Choudhary
Yeah, very good question. Actually, you know, that is the differentiating factor. So our business model and business that we have built is not based on opportunities unlike other companies. A lot of companies being impacted with what China is doing. And you’ll please to know that there is no impact of China on Himadri business model. We supply like just for example, we supply Kolta Pish to our customers in liquid form at a temperature of 260 degree centigrade.
And we are supplying to our customers at a price which is more or less China or less than China price. And even then we are earning good profit. That is integration, that is operational efficiency, that is real what Himachi has developed same for carbon black. So carbon black the focus why we have not kept on opportunistic market of commodity black is because the opportunity will come today and it will be just time bound. But our reason is to have a sustainable long term business.
And that is where specialty comes into play. So we are not supplying to any opportunistic customers. Where this delta is there, that is the biggest strength of the company.
Prit Nagersheth
You have other peers who are supplying to that opportunity. So.
Anurag Choudhary
Our volumes are hardly anything. We are 180,000 tons. I don’t have 1 million ton or 800,000 tons to sell. So I can very well see whom to sell and have selected customers who value for quality and long term relationship.
Prit Nagersheth
Understood. So you are basically pretty confident of sustaining the current numbers and improving. Them as per your plans and as we explained over the next two years for the 800 crore profitability that you are targeting within two years.
Anurag Choudhary
100%.
Prit Nagersheth
Wonderful. Wonderful. Thank you sir.
Operator
Thank you. Ladies and gentlemen, you may press Star and one to ask a question. The next question is from the line of Darshan Shah from BS Investment. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Anurag Choudhary
Yes, yes please.
Unidentified Participant
My questions are largely around the LFP business. First of all, have we signed any offtake agreement OR MU with OEMs or battery manufacturers for our LFP output?
Anurag Choudhary
No, not yet. But the samples have been approved. So what is the stage? Second, we have to sell the samples. Send the samples to them from demo plant. Once that is approved then the commercial plant. There will not be much time required for approving from commercial plant. So post that only the MOU will be signed. So good thing is that we have got very favorable reply from the OEMs. When we have sent the first few samples. The results have been very encouraging.
Unidentified Participant
Okay sir, that was nice to hear. So then on the similar grounds near post commercialization, how much revenue do you expect this segment to contribute in its first full year of operations?
Anurag Choudhary
So in first full of operation it will kind of. It will have a top line of around 2200-2400 crores at full capacity utilization. This is the basis of today’s market price.
Unidentified Participant
Okay, and what is the target capacity of LFP by the year in FY26?
Anurag Choudhary
No, no. FY26 there is no capacity. FY27Q3 we will have 40,000 metric ton up and running.
Unidentified Participant
Oh okay. Okay. Got it. And your presentation mentioned it is for both domestic exiles exports. But then your focus would be towards what? Initially towards more of domestic or more of export.
Anurag Choudhary
More of exports. Domestic, whatever material will be the requirement will be there will be meeting that we will be the only commercial manufacturer. And then we’ll be growing our capacity depending on the domestic and international market which will be huge.
Unidentified Participant
Okay, so your favorite.
Anurag Choudhary
You know Himadri is the only company will be first manufacturing plant in the world other than China for LFP chemistry.
Unidentified Participant
Got it sir. And finally sir, since you mentioned that it will be in FY27, it’ll be up and running. The presentation mentions 1130 crores of.
Unidentified Participant
Capex how much can we expect it to become to be booked for FY26 and how much beyond FY26 of the 1126.
Anurag Choudhary
I think 300 crores will be in FY26 and balance most of it will be in FY27.
Unidentified Participant
Got it, got it. So that was very helpful sir. Thank you and all the best.
Anurag Choudhary
Thank you so much.
Operator
Thank you. Thank you. The last question is from the line of Rudransh Kalra from MB Investment. Please go ahead.
Rudransh Kalra
Hi, good evening.
Anurag Choudhary
Hello, good evening.
Rudransh Kalra
Yeah my question is precisely around Birla tires. So what are the segments that initially you want to get in the tire segment? Is it off highway first or is it passenger vehicle or is that going to be happening simultaneously? And also you also want to get into the mainstream 1000 by 20 and 295 tires.
And the other question along those along the tire industry is what sort of business model are you going to be planning? What sort of like dealer network or distributor network are you planning? So as you just mentioned earlier you were saying that initially you have like you’re gonna have a limited capacity so you want to go in bigger cities or would you want to go in places where the business is more? So how will you strategize it? If you could tell me the product and the distribution or the dealer network that’d be really great.
Anurag Choudhary
Yeah, sure. So initially the target will be to sell agri tires and mining tires. Along with that bias tires for the commercial vehicle. And the next phase will be passenger car radial tires and EV tires third phase plus in addition to that we will be moving on to specialized tires over the years. So it is going to be a journey of next three to five years where the entire transformation will happen starting from bias for commercial to ev PCR and OHT tires.
Rudransh Kalra
Fair enough.
Anurag Choudhary
Regarding a dealer that once we launch our product we will come up with a full report on that and that is time I’ll be love to share that.
Rudransh Kalra
Just a follow up question. So if just in case you decide to you know get into the not the particular dealer and specialized dealer distributorship. So what is what you want to grow slow once you hit the once the production starts and once you have the capacity to dispose them in the market. So do you want to just get it. To just appoint one distributor and then dealer or is it going to be regional dealers and then how is it going to be like at least strategically you must have thought something about it.
Anurag Choudhary
We have our strategy fully aligned and made in and that is very much in place. So at right point of time I’ll disclose the strategy. Not now.
Rudransh Kalra
Okay, thank you.
Anurag Choudhary
Thank you.
Operator
Thank you. The next question is from the line of Anubhav from MC Research. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for taking my question. So I wanted to understand what is the export share for a carbon black business? Maybe in terms of volumes or sales and at the industry level, if you could also share what is the net export level.
Anurag Choudhary
In the overall top line? For FY25 our export sales was 27% in terms of total sales.
Unidentified Participant
Okay, okay. So but specific to carbon black could you share what could be the exposure to exports?
Anurag Choudhary
Exposure to other export for carbon back will be around 35 to 40%.
Unidentified Participant
35 to 40%. And for the industry level, would you have any data like approx. How much would be the Indian carbon black industry would have an export exposure?
Anurag Choudhary
Much less.
Unidentified Participant
Okay. Okay. And the last question was regarding a specialty product which we are eyeing for carbozone. If you could illustrate a couple of applications. I mean how for example for pharma electronics, I mean what are the end users?
Anurag Choudhary
So garbazole is used for making violet in the pigment industry. That’s the only way of making violet. So currently it is being imported and they are very niche producers of carbazole. So Himadi will one of the first companies to do that.
Unidentified Participant
Okay. Okay. And so for the farming.
Anurag Choudhary
The specific application.
Unidentified Participant
Okay, thank you.
Anurag Choudhary
Thank you so much.
Operator
Thank you. In the interest of time, that was the last question for today. I now hand the conference over to the management for closing comments.
Anurag Choudhary
Just one second. If you have more question, you can take. If there are more people who are having more questions, they are okay with it. You can take please.
Operator
Okay, the next question. From the line of Yash who is an individual investor. Please go ahead.
Unidentified Participant
Hello.
Anurag Choudhary
Yes, yes, please.
Unidentified Participant
Congratulations sir, first of all for amazing set of numbers and thank you for the opportunity. I just wanted to know. Majority of my questions has already been covered. I just wanted to confirm what is the vision that we have down the line three years, four years from here in terms of market share in terms of revenue and profitability.
And the second question is I saw one slide where we have mentioned the uses in electronic items and some pharma and some I think missiles applications also. Can you please elaborate on that part? Like what are we doing exactly on those segments?
Anurag Choudhary
See, we have given a clear guidelines guidance that FY27, our pact will be 800 plus. So that really lays down the roadmap for growth. And it will be coming from all around business, from our existing business and the new businesses that we are entering. And the capacities which are setting up right from specialty chemicals like anthraquinone, carbazole, from higher revenues in terms of exports for Polta Petch, from the capacity expansion of specialty carbon black.
And there’s much, much more to come. If you go to next year FY28, then that will be a year where your LFP will be in full production. Your other products which we are also in pipeline, they will also start. So every year you will see very strong numbers coming up. For we are make a. We make a very specialized pitch which goes into DRDO for using long warhead missiles. Beyond this I cannot disclose it’s a NDA.
Unidentified Participant
Okay, that’s amazing, sir. That’s amazing to hear that we have long term visibility and sustainability in terms of number and profitability and revenue share. Also how, how do you see this as an opportunity in terms of this DRDO tie up and defense given that the whole Europe thing is now revamping their own defense capacities as you guys focus more on the export parts. Do we see any more addressable market over there?
Anurag Choudhary
It’s a very niche market and definitely growing. At a good pace. Bhavya, any other question?
Operator
Yash, does that answer your question?
Unidentified Participant
Actually, actually I cannot hear you. The voice was not audible in between.
Anurag Choudhary
Application we are selling is very niche application and it is going year on year.
Unidentified Participant
Okay, so like how currently? Like how much percentage is that sizable amount as of now or will it be sizable amount in terms of percentage going ahead? Maybe FY28 and way forward from there?
Anurag Choudhary
It’s sizable amount but we don’t want to give a number to that.
Unidentified Participant
Okay, understood. No issue, sir. Thank you sir for the opportunity and all the best for the future. Thank you.
Anurag Choudhary
Thank you.
Operator
Ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments.
Anurag Choudhary
So thank you everyone. Thank you for your support and thank you for your trust in Himadri. Thank you Bhavya.
Operator
Thank you on behalf of mufg. End time. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.