Motilal Oswal Keeps Buy Rating On Himadri Speciality Chemical

Domestic brokerage firm Motilal Oswal has kept its Buy rating on Himadri Speciality Chemical with a target price of 780 rupees per share. This target suggests an upside potential of about 37 percent from the stock price at Friday's market close.

Growth Drivers

Analyses from the brokerage highlight several growth factors for the company, including China plus one sourcing shifts, the One Big Beautiful Bill Act, rising cell manufacturing capacity in India, and greater global use of lithium iron phosphate batteries. Himadri is growing its footprint in the battery materials space by developing lithium iron phosphate cathode active materials and anode products. The firm plans to scale its cathode capacity from 2,000 metric tonnes per annum in the third quarter of fiscal year 2027 to 40,000 metric tonnes per annum by fiscal year 2028, backed by a capital expenditure of roughly 1,125 crore rupees. It is also building anode materials through a pilot facility of 200 metric tonnes per annum with an investment near 120 crore rupees, alongside tech partnerships and equity stakes in firms like Sicona, IBC, and Invati Creations. Furthermore, the company expanded into tyre manufacturing by acquiring Birla Tyres to create new integration opportunities.

Market Opportunity

India's total cell manufacturing capacity is expected to grow by nearly 178 gigawatt hours over the next five years to reach close to 181 gigawatt hours. This expansion could create a battery materials market worth about 7 billion dollars. Himadri is aiming for around 3 billion dollars in battery chemicals revenue in six years, which would make up a two percent share of the global market by fiscal year 2035. Beyond batteries, the company runs a coal tar pitch capacity of 300,000 metric tonnes per annum that meets nearly 80 percent of domestic demand, while also scaling up specialty carbon black, carbon nanotubes, and super specialty carbon black.

Context

Brokerage firms frequently issue buy ratings and target prices based on a company's planned capital investments and future sector growth trends. These projections help market participants evaluate the long-term potential of specific equities within expanding industries like electric vehicles and clean energy.