Why did Rain Industries rally 50% over the last month?

Synopsis: Rain Industries, engaged in the production of carbon, advanced materials, and cement products, has rallied upto 50% in the last one month. In this article, let’s explore the reasons for the rally.

The shares of the Small-Cap stock specialising in the production of carbon, advanced materials, and cement products, operating as a leading vertically integrated global producer in these fields, have been in focus as the stock has rallied upto 50 percent in the last one month. In this article, let’s explore the reason for the rally.

With a market capitalisation of Rs. 5,159.54 crores on Tuesday, the shares of Rain Industries Ltd rose upto 6  percent, reaching a high of Rs. 155.50 per share compared to its previous closing price of Rs. 146.80 per share.

What Happened

Rain Industries Ltd, engaged in the production of carbon, advanced materials, and cement products, operates as a leading vertically integrated global producer in these fields as been in the spotlight as it has rallied upto 50 in the last one month.

Reason for the Rally

• Rain Industries Earnings Recovery: It is a key player in producing calcined petroleum coke (CPC) and coal tar pitch, and has shown significant recovery in its earnings after a tough period. The company’s EBITDA has steadily improved, rising from Rs. 380 crore in Q1CY25 to Rs. 627 crore in Q3CY25. Despite past volatility, the company’s EBITDA has rebounded from Rs. 933 crore in 2023 to Rs. 1,274 crore in 2024, signalling a positive earnings recovery.
• Attractive Valuations: The company’s stock is trading at attractive valuations, with a price-to-book ratio of 0.7x and an EV/EBITDA ratio of 5x. This positions Rain Industries as a potentially undervalued stock in the market, making it an appealing option for investors seeking growth in a cyclical industry.
• Growth in Advanced Materials and Cement Business: Rain Industries is also diversifying its business. Its advanced materials segment now accounts for 20% of the revenue mix, with further growth potential tied to CPC spreads during strong aluminium cycles. Although the cement business contributes less than 10% of total revenue, its replacement cost is estimated at Rs. 3,500-4,000 crore, presenting a hidden value in the company’s portfolio.
• Debt and Refinancing Plans: The company faces rising interest costs, with net debt standing at $801 million as of September 2025. However, management is actively watching market conditions for an opportunity to optimize interest costs, signalling a proactive approach to debt management.
• Expansion plans: Considering the strong growth in cement demand across Andhra Pradesh and Telangana, the company has initiated a brownfield expansion at its Ramapuram facility in Suryapet District, Telangana. 
• The project will increase clinker capacity from 1.0 million tons to 2.5 million tons, cement capacity from 1.5 million tons to 3.8 million tons, and waste heat recovery power plant capacity from 5 MW to 12 MW.
• Future Outlook: Looking ahead to FY26 and FY27, the company expect the new market initiatives to support top-line growth in the segment. While it is not providing specific revenue guidance, they are confident these efforts will scale over time and advance its goal of sustainable, margin-accretive growth across the Advanced Materials portfolio. 

Financials & Others

The company’s revenue rose by 13.76 percent from Rs. 3,934 crore in September 2024 to Rs. 4,476 crore in September 2025. Meanwhile, the Net loss from  Rs. 155 crore turned to a profit of Rs. 130 crore during the same period.

The performance comparison for Q3 2025 versus Q2 2025 across three segments involves: The Carbon segment, sales volumes reaching 673k MT, marking a slight increase of 1% compared to Q2 2025. For Advanced Materials, sales volumes were 75k MT, reflecting a 7%. However, in the Cement segment, sales volumes dropped to 603k MT, showing a decline of 14% compared to Q2 2025.

Rain Industries Ltd (RAIN) is a global, vertically integrated producer of carbon, cement, and advanced materials, transforming industrial by-products into essential raw materials for industries like aluminium, automotive, and construction. 

It operates across three main segments (Carbon, Advanced Materials, Cement) with facilities in multiple countries, converting oil refining and steel waste into high-value products such as Calcined Petroleum Coke (CPC), Coal Tar Pitch (CTP), and specialty chemicals, while also producing cement in South India. 

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