ICICI Securities Maintains 'Hold' Rating for Himadri Speciality Chemical, Sets Price Target at Rs 550

ICICI Securities Raises Target Price for Himadri Specialty Chemical

Himadri Specialty Chemical's (Himadri) fourth quarter financial results for fiscal year 2026 were a positive surprise, with the company's gross profit increasing by 28.3% year-over-year. However, the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) performance was impacted by a foreign exchange loss of INR 0.4 billion.

Despite the Middle-East crisis, Himadri does not foresee any material impact on its operations. The company is optimistic about its future performance, with the commissioning of a newly built specialty carbon black plant expected to contribute positively to its bottom line in fiscal year 2027. Additionally, the likely commissioning of a new chemicals plant in the third quarter of fiscal year 2027 is expected to further boost the company's performance.

Himadri's balance sheet has improved significantly, with the company now holding a net cash position of INR 1 billion. This development may enable the company to invest in battery material plants without straining its leverage ratios.

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Comparison of Himadri's EBITDA Estimates

ICICI Securities has revised its target price for Himadri Specialty Chemical to INR 550, a 16.8% increase from the previous target price of INR 470. The company has also revised its EV/EBITDA multiple to 15x, up from 12x. The research firm has retained its 'HOLD' recommendation for the stock.