What is the story about?
Shares of Rain Industries have jumped nearly 45% in the past month, though they still trade about 20% below their 52-week high.
Rain Industries co-produces calcined petroleum coke (CPC) and coal tar pitch, key inputs in aluminium production, making it an indirect play on a rising aluminium cycle.
The company's earnings are showing signs of recovery after a tough few years. EBITDA has steadily improved this year, rising from ₹380 crore in Q1CY25 to ₹627 crore in Q3CY25.
While past annual performance was volatile — EBITDA fell from ₹3,537 crore in 2022 to ₹933 crore in 2023 — it has recovered to ₹1,274 crore in 2024.
Valuations remain attractive, with the stock trading at around 0.7x book value and 5x EV/EBITDA.
Rain's cement business, though contributing less than 10% of revenue, has a replacement cost estimated at ₹3,500-4,000 crore.
Key areas to watch include debt refinancing and reduction.
Net debt stood at $801 million as of September 2025, and interest costs have been rising slightly each quarter, hitting ₹237 crore. Management says it is "staying prepared and watching the markets closely for an opportunity to optimise interest cost."
Other growth levers include CPC spreads during a strong aluminium cycle, and the ramp-up of the advanced materials business, which now accounts for 20% of the revenue mix.
Institutional participation is also increasing, with ICICI Prudential rising its holding across various schemes from nil in September 2023 to 4.09% in September 2025.
Rain Industries co-produces calcined petroleum coke (CPC) and coal tar pitch, key inputs in aluminium production, making it an indirect play on a rising aluminium cycle.
The company's earnings are showing signs of recovery after a tough few years. EBITDA has steadily improved this year, rising from ₹380 crore in Q1CY25 to ₹627 crore in Q3CY25.
While past annual performance was volatile — EBITDA fell from ₹3,537 crore in 2022 to ₹933 crore in 2023 — it has recovered to ₹1,274 crore in 2024.
Valuations remain attractive, with the stock trading at around 0.7x book value and 5x EV/EBITDA.
Rain's cement business, though contributing less than 10% of revenue, has a replacement cost estimated at ₹3,500-4,000 crore.
Key areas to watch include debt refinancing and reduction.
Net debt stood at $801 million as of September 2025, and interest costs have been rising slightly each quarter, hitting ₹237 crore. Management says it is "staying prepared and watching the markets closely for an opportunity to optimise interest cost."
Other growth levers include CPC spreads during a strong aluminium cycle, and the ramp-up of the advanced materials business, which now accounts for 20% of the revenue mix.
Institutional participation is also increasing, with ICICI Prudential rising its holding across various schemes from nil in September 2023 to 4.09% in September 2025.
