The shares of the leading producer of specialty chemicals gained up to 9 percent after the company inked an agreement to develop natural graphite battery anode material.
With a market capitalization of Rs 5,971.82 crore, the shares of Rain Industries Ltd were trading at Rs 177.55 per share, increasing around 7.18 percent as compared to the previous closing of Rs 165.65 apiece.
Reason for Rise:-
Today the company shares have seen such a bullish movement after Rain Industries Ltd inked a joint development agreement with Northern Graphite to develop natural graphite battery anode material used in lithium-ion batteries for electric vehicles.
Furthermore, under this agreement, Northern and RAIN will collaborate to develop and market natural graphite BAM products aimed at extending cycle life, improving charging speed, and reducing electrode swelling in lithium-ion battery cells. This discovery bridges the stability gap between natural and synthetic graphite, allowing for greater usage of natural graphite in electric vehicle (“EV”) battery cells.
Moreover, the collaborative development enables RAIN to improve its LIONCOAT battery-grade carbon precursor materials and coating technology. It also promotes an integrated mine-to-battery graphite solution, which strengthens important mineral supply chains in Western countries and advances RAIN’s position in the energy storage industry.
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Financial performance:-
Looking forward to a company’s financial performance, revenue shrunk by 11 percent from Rs 4,627 crore in Q1FY24 to Rs 4,094 crore in Q1FY25, meanwhile during the same time frame, the company’s net profit slipped significantly by 121 percent from Rs 207 crore profit to Rs 45 crore loss.
Gross debt is $970 million, with a net debt of $747 million and a net debt to EBITDA ratio of 4.2x, expected to improve to 3.0x as performance enhances. The liquidity position is robust, featuring $432 million, including $206 million in cash and $226 million in undrawn credit facilities.
Segments Insight:-
The Carbon segment’s revenue declined to ₹27.95 billion from ₹33.53 billion year-over-year, despite increased sales volumes of Calcined Petroleum Coke (CPC). The average blended realization fell by ~24.1% due to lower market prices, although EBITDA margins improved to 12-14% in Q2.
Revenue in the Advanced Materials segment rose to ₹9.40 billion from ₹8.94 billion year-over-year, driven by heightened demand for HHCR resins in Europe due to supply chain disruptions from Asia. Stable margins have been observed over consecutive quarters, with expectations for continued strong performance.
The Cement segment’s revenue fell by 14.3% in Q2 compared to the previous year, mainly due to an 8.0% drop in realizations and a 6.8% decrease in volumes. Modest industry growth of 2-3% was noted, with forecasts predicting a 7-8% annual increase for fiscal year 2024-25.
Industry outlook:-
Global economic indicators show positive trends, with the US economy demonstrating resilience despite inflationary pressures. An anticipated recovery in aluminum prices is expected as global production increases. Management remains optimistic about overcoming challenges in the Carbon segment while seizing new opportunities, particularly in the Advanced Materials segment.
Company profile:-
Rain Industries Limited (RAIN) is one of the world’s top manufacturers of calcined petroleum coke, coal tar pitch, and other high-quality basic and specialty chemicals.
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Written by:- Abhishek Singh
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