In conversation with Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical Limited

We will continue to focus on achieving a competitive edge by streamlining our operations with sustainable practices and technically sound as well as commercially viable innovative products, affirms Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical Limited

In Q1FY24, the company’s revenues dipped by 9.1 per cent from Q1FY23, while the net profit zoomed by 125 per cent from last year’s same quarter. What were the contributing factors to the company’s strong performance?  
Himadri’s strong performance in Q1FY24 is driven by various strategic initiatives across all of our business portfolios powered by our sustainable innovation. Our core businesses have witnessed robust growth due to the introduction of value-added product offerings in Speciality Carbon Black, Construction Chemicals and Anode Materials for Lithium-ion Batteries.

Over the last six quarters, Himadri achieved consistent sales volumes exceeding 95,000 MT, with a rising share of margin-accretive speciality carbon black (SB) sales, bolstering our EBITDA.

Our relentless focus on optimizing debt coverage metrics and maintaining healthy cash reserves significantly contributed to a remarkable reduction of Rs 154 crore in long-term debt between March and June, prompting an ICRA rating revised to Positive from Stable.

As pioneers in India's Lithium-ion Battery(LiB) Raw Material, our forward integration for critical materials positions us favourably in the growing LiB segment. To reinforce revenue stability, we strategically expanded our product portfolio to cater to multiple industries, reducing reliance on any single market. Himadri holds a prominent market position in domestic coal tar pitch (CTP) and carbon black (CB) businesses, hugely credited to our large-scale operations and commitment to delivering tailor-made solutions that precisely meet our customer's unique needs, thereby setting us apart as a preferred supplier in the industry and propelling our performance growth.

What is your outlook on the Indian speciality chemicals sector? 
The Indian speciality chemicals sector is positioned for remarkable expansion, supported by compelling data from various industry reports. According to a report by IBEF (India Brand Equity Foundation), the Indian speciality chemicals market is growing at a CAGR of 10.7 per cent. This growth is attributed to the sector's strong presence across diverse segments. According to Ernest & Young, by 2026, the Indian speciality chemicals market will exceed USD 60 billion, driven by the rapid pace of urbanization and industrialisation.

While there are short-term headwinds driven by global demand and inventory rationalisation, the sector in India is adapting through a higher focus on innovation, R&D and competitiveness which will stand in good stead in the long run. China Plus One strategy and global supply situation uncertainties have been a strong driver of growth of the sector in the country. Further growth in the upcoming years will be driven by factors such as rising domestic demand, favourable government policies (which are encouraging local manufacturing and sourcing), strong supplier access, and well-established infrastructure.

In a nutshell, the Indian speciality chemicals sector stands at the crossroads of remarkable growth. Its diverse presence, emphasis on sustainability, and alignment with global trends underscore its potential as a lucrative investment avenue and a key contributor to India's economic growth story.

Recently, the company announced that it has invested 10.32 million in Australian startup, Sicona Battery Technologies. How does this acquisition fit into the company's long-term strategic goals? 
The investment in Sicona is an initiative in line with our long-term strategy to produce high-quality anode materials for the LiB industry and reinforces the company's commitment to exploring innovative technologies in the battery material segment. The investment by Himadri will accelerate product and technology development for Sicona and expedite the commercial deployment of this technology.

Sicona develops silicon-composite anode technology for lithium-ion batteries. Their technology delivers 50-100 per cent higher capacity than conventional graphite anodes and more than 50 per cent higher cell energy density. This results in batteries with faster charging and overall performance. Sicona's technology is low-cost and scalable - which are the need of the hour at the moment globally.

What is your outlook for FY24 and beyond? 
Our impact on society and the environment is as vital to us as our financial success. As responsible corporate citizens, we are committed to undertaking Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) initiatives that leave a positive impact. ESG is deeply embedded in our working matrix at Himadri, reflecting our unwavering commitment to responsible business practices that have a positive impact on society and the environment.

Our focus on sustainable development has been a constant priority, shaping our approach to ESG. Currently, we are in the process of obtaining a sustainability rating. In the environmental sphere, we are dedicated to reducing our carbon footprint and conserving natural resources. We have made significant investments in eco-friendly measures, integrating sustainable considerations like ‘Zero Liquid Discharge’ facilities into our operations. Additionally, we meet over 90 per cent of our energy needs with in-house clean and green power, contributing to the creation of a circular economy.

India's push for a green economy is driving significant growth in the electric vehicle (EV) industry. To reduce dependence on imports, the government is emphasizing the need for localized battery production, as currently, a substantial part of lithium-ion cell requirements are being imported. At Himadri, we are delighted to remain at the forefront of a massive transition towards a green economy, aligned with India’s vision of becoming a self-reliant nation (Atmanirbhar Bharat) and reducing carbon emission.

As we go forward, we remain committed to building a sustainable business backed by a robust product pipeline, a strong clientele, R&D and cutting-edge technologies. We will continue to focus on achieving a competitive edge by streamlining our operations with sustainable practices and technically sound as well as commercially viable innovative products.