In conversation with Anurag Choudhary, Chairman and Managing Director of Himadri Speciality Chemical Ltd

Your Q3FY23 revenue increased by 34 per cent YoY, with EBITDA rising by 197 per cent from Q3FY22 and net profit increasing by 283 per cent from the corresponding quarter last year. Can you explain the factors that contributed to your strong performance?

Our superior performance is a testament to the strength and viability of our business model, which we have meticulously crafted over the years. The robust growth in the volume of production and the accelerated expansion of our core business through the introduction of value-added products contributed to our strong performance.

How do you perceive the future of the lithium-ion battery industry in India?

The world is moving towards the New Sustainability Goals Target and Carbon Neutrality for each nation. India too is inching towards the same goal and aims to be a Carbon Neutral Nation by 2070. In this regard, Lithium-Ion Battery (LIB) will play a major role in the paradigm shift of the automobile and stationary storage industry. Today, India has become the 2nd most attractive market for manufacturing, second only to China and will also witness significant growth in this sunrise sector. LIB demand in India is expected to increase to 260 GWh by 2030 (at a CAGR of 74 per cent) which will be fuelled by the country's vision of Atmanirbhar Bharat and Viksit Bharat@100.

As of December 31, 2022, your company had a net debt of Rs 645 crore. What are your plans for reducing this debt?

We remain committed to improving our financial position and have already made significant progress, reducing our long-term debt and effectively managing our balance sheet.

Your company produces various products, such as coal tar pitch, carbon black, advanced carbon material, sulfonated naphthalene formaldehyde, and Polycarboxylate Ether (PCE). What factors drive the demand for these products, and what is your outlook for the demand in the upcoming quarters?

Himadri's product basket is diverse with each product having its unique factors that are driving its demand in the market.

The largest driver of the Coal Tar Pitch market is the rising demand for aluminium, which is mostly a result of rapid growth in the industrial and infrastructural developments globally. Coal tar pitch is a highly technical and specialized product that plays a crucial role in the production of anodes and electrodes, used in the aluminium and steel industries respectively. The quality of coal tar pitch is of utmost importance as it impacts the purity of metal, the life of anodes and power consumption.

The demand for coal tar pitch is inelastic. Therefore, it is crucial to have a reliable supplier who can provide high-quality coal tar pitch and execute timely delivery throughout the year. At Himadri, we understand the significance of quality, which is why we manufacture high-performance and tailor-made coal tar pitch for each customer.

Demand for Carbon Black in India has surged due to the growth of the domestic tyre industry and government initiatives such as 'Atmanirbhar Bharat Abhiyan' and product-linked incentive schemes for automobiles and auto components. Speciality Black demand is driven by consumer spending, construction, and automotive industries. Plastics compounding is the largest single market for Carbon Black outside the rubber industry, accounting for about 70 per cent of the volume demand for special blacks. The increase in demand is mainly due to rising demand from downstream industries.

Himadri's R&D prowess has been instrumental in producing one of the finest speciality carbon blacks in the market. Our unit has raised the total production capacity of carbon black from 120 KTPY to 180 KTPY. This increase in capacity has allowed us to expand our product portfolio to include a wider range of speciality grades of carbon black, designed for various rubber, polymer, ink, fibre, conductive and coating applications while assuring perfect compatibility and usability of our finished products.

SNF and PCE are volume drivers in the construction industry, primarily used in cement and concrete admixtures to enhance their properties. The growth of the construction chemicals market is closely tied to infrastructure and construction growth, with the Indian government allocating a significant budget for this purpose. SNF is also used in the textile industry for dyes and processing. India's domestic demand has been better this year and is expected to continue growing.

Overall, we have noted a surge in the demand for all our products and are optimistic about steady growth in the upcoming quarters.

What are your top three strategic priorities at the moment?