Synopsis: A leading recycling stock with strong fundamentals and expansion potential has caught investor attention. Kotak has turned bullish on the company, citing resilient margins, improved profitability, and attractive valuations after recent corrections.
A recycling stock came into focus amid steady operational performance and margin stability. Analysts at Kotak Securities maintained a positive long-term outlook, highlighting expansion-led growth visibility and robust earnings potential.
Gravita India Ltd opened at Rs. 1,685.90 after a previous close of Rs. 1,668.05 and touched an intraday high of Rs. 1,822, marking a 9.2 percent rise. The company’s market capitalization currently stands at Rs. 13,256 crore.
Kotak on Gravita India
Kotak has upgraded the stock to a ‘Buy’ rating and raised the target price to Rs. 2,150 indicating a potential upside of 28.89 percent from the previous close.
The brokerage cited healthy operating performance despite temporary delays in capacity expansion. The brokerage noted that first-half volumes were impacted by project timelines, but Gravita beat estimates on stronger margins.
The company plans to add 80 ktpa and 45 ktpa of lead capacity at its Mundra and Phagi plants during the second half of FY26, supporting its growth trajectory. The brokerage projects around 25 percent revenue CAGR and 24 percent EPS CAGR over FY25-28 and has raised FY26-28 EPS estimates by 4-7 percent, factoring in improved margin assumptions. It added that the recent correction offers an attractive entry point for long-term investors.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): Revenue remained largely stable, declining marginally by 0.4 percent to Rs. 1,036 crore from Rs. 1,040 crore in the previous quarter. Operating profit inched up 1 percent to Rs. 102 crore from Rs. 101 crore, while the operating margin held steady at 10 percent. Profit before tax fell 4.3 percent to Rs. 111 crore from Rs. 116 crore, but net profit improved 3.2 percent to Rs. 96 crore compared to Rs. 93 crore. Earnings per share increased from Rs. 12.64 to Rs. 13.01 sequentially.
Year-on-Year (YoY): Gravita reported robust growth with revenue up 11.8 percent from Rs. 927 crore to Rs. 1,036 crore. Operating profit surged 61.9 percent to Rs. 102 crore from Rs. 63 crore, expanding the operating margin from 7 percent to 10 percent. Profit before tax rose 30.6 percent to Rs. 111 crore from Rs. 85 crore, while net profit grew 33.3 percent to Rs. 96 crore from Rs. 72 crore. EPS increased from Rs. 10.43 to Rs. 13.01.
About the Company
Gravita India Limited (GIL), incorporated in 1992 by Mr. Rajat Agrawal, is headquartered in Jaipur and operates across 10 recycling facilities in Rajasthan, Gujarat, Andhra Pradesh, Jammu & Kashmir, Sri Lanka, Ghana, Mozambique, Senegal, Togo, and Tanzania. The company recycles lead-acid batteries, lead scrap, aluminium scrap, plastic scrap, and rubber scrap. Its processes include smelting lead battery scrap and producing secondary lead metal, pure lead, specific lead alloys, lead oxides, and various value-added products such as lead sheets, powders, and shots. Gravita continues to play a vital role in promoting sustainable recycling and circular economy practices through innovation and efficient resource utilization.
-Manan Gangwar
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