Take a look at this recycling stock, which is one of the largest lead producers in India, that has delivered more than 4,000 percent returns in just five years and multi-folded investors’ money.
Stock Performance:
During Friday’s trading session, the shares of Gravita India Limited hit a 20 percent upper circuit at Rs. 1,910 on BSE. The stock has delivered multibagger returns of around 4,900 percent over a five-year period, spanning from Rs. 37.1 in April 2020 to Friday’s closing price level of Rs. 1,854.65.
This indicates that if an investor had invested Rs. 10,000 in the stock five years ago, it would have gained to nearly Rs. 5 lakhs.
The stock delivered positive returns of over 84 percent in one year, as well as around 12 percent of returns in the last one month.
Brokerage Target:
The domestic brokerage firm Axis Direct has recommended a “buy” rating on Gravita India and assigned a target price of Rs. 3,000 per share, representing a potential upside of nearly 62 percent from Friday’s closing price level of Rs. 1,854.65.
Financials:
Gravita India reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 31.4 percent, rising from Rs. 758 crores in Q3 FY24 to Rs. 996 crores in Q3 FY25, while its net profit increased around 28 percent YoY from Rs. 61 crores to Rs. 78 crores, over the same period.
Additionally, the revenue of Gravita increased by a CAGR of over 30 percent to Rs. 3,161 crores in FY24, as against Rs. 1,410 crores in FY21, while the net profit grew by a CAGR of 62 percent, from Rs. 57 crores to Rs. 242 crores, over the same period.
Key Financial Ratios:
In terms of key financial metrics, Gravita India has a Return on Equity (RoE) of 33.7 percent and a return on capital employed (RoCE) of 27.9 percent. Additionally, the stock has a P/E ratio of 45.8, compared to the industry’s P/E ratio of 27.2, and its debt-to-equity ratio stands at 0.6.
Future Outlook:
The management of Gravita India remains optimistic about its growth prospects, aiming for a volume CAGR of over 25 percent and profitability growth of more than 35 percent under its Vision 2028 plan.
The company is also focusing on increasing the share of non-lead business to over 30 percent, while utilizing more than 30 percent renewable energy and reducing overall energy consumption by 10 percent.
The management expects EBITDA per ton for lead to stabilize in the range of Rs. 18 to Rs. 19, with aluminium margins anticipated to be between Rs. 14 to Rs. 15 once hedging mechanisms are fully implemented.
About the company:
Gravita India Limited is engaged in lead processing, aluminium processing, trade (lead products and aluminium scrap) and dealing in turn-key lead recycling projects.
The company carries out smelting of lead battery scrap/lead concentrate to produce secondary lead metal, which is further transformed into pure lead, specific lead alloy, lead oxides (lead sub-oxide, red lead, and litharge) and lead products like lead sheets, lead powder, lead shot, etc. Further, the company has also entered into the PET product manufacturing.
Written by Shivani Singh
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