Synopsis: Gravita India is a strong, recycle MOATed business that presents a strong future opportunity for wealth creation. It laid a significant future outlook for its business.
Gravita India is a leading global recycling company specializing in lead, aluminum, plastic, and rubber segments. It turns waste lead, aluminum, plastic, and rubber into usable industrial products, supported by 12 plants and operations across multiple countries.
With a market capitalization of Rs 12,860 crore, the shares of Gravita India Ltd closed at Rs of Rs 1740.90 per share, up 1.4 percent from its previous day’s closing price of Rs 1716.75 per share. Over the past five years, the stock has delivered a multibagger return of 3,441 percent, outperforming NIFTY 50’s return of 104 percent.
Q2 Highlights
Gravita India reported a core revenue of Rs 1,036 crore in Q2 FY26, a growth of 12 percent as compared to Rs 927 crore in Q2 FY25. However, on a quarter-on-quarter basis, it declined slightly by 0.4 percent from Rs 1,040 crore.
On the operating profit front, it reported an EBITDA of Rs 102 crore in Q2 FY26, a growth of 62 percent as compared to Rs 63 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it grew slightly by 1 percent from Rs 101 crore. On a YoY basis, its margins also expanded by 300 bps in Q2 FY26.
Regarding its profitability, it reported a net profit of Rs 96 crore in Q2 FY26, a growth of 33 percent as compared to Rs 72 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it recorded a growth of only 3 percent from Rs 93 crore.
During the second quarter of the financial year 2026, Gravita India experienced a mixed performance of EBITDA per MT across the segments. The Lead segment was the main contributor to the increase as it went up from Rs 21,642 to Rs 23,196, which is a clear indication of higher spreads and good demand. Volume for this segment grew by 5 percent YoY.
Whereas Aluminium lost a lot of its value and went down from Rs 18,386 to Rs 14,786, suggesting that the company is suffering from margin pressure. The Plastic segment has been almost the same; it has gone down a bit from Rs 10,497 to Rs 10,122. Volume for the Aluminium and Plastic segment declined by 20 percent and 4 percent respectively.
Future Outlook
Gravita India’s Vision 2029 is a clear statement of intent for the company to expand aggressively, with a focus on new recycling verticals such as lithium, steel, rubber, and paper, and gradually move away from traditional lead operations.
The company is looking at a volume CAGR of more than 25 percent, a profitability growth of more than 35 percent, and a strong ROIC of over 25 percent, thus indicating its intention to grow rapidly but at the same time keep the returns at a high level.
The value-added products, which are expected to account for more than 50 percent of the revenue, and the non-lead businesses are expected to contribute over 30 percent of total revenue, will be the two major sources of the company’s growth. In addition, the company is committed to reducing its energy consumption by more than 10 percent and using renewable power for more than 30 percent of its needs in order to promote sustainability.
All in all, the company’s priorities are a wise use of capital, the creation of shareholder value, and growth that increases the return, thus making Gravita a recycling leader who is diversified and ready for the future by 2029.
Gravita India has outlined a total capex of around Rs 1,225 crore by FY28, reflecting its push to scale existing operations while expanding into new recycling verticals such as lithium-ion, paper, and steel. However, its capex plans have slightly reduced from the earlier range of Rs 1,500 crore, as it shifted its stance from greenfield to brownfield expansion, which will save a lot of money for the company, signifying smart management of its capital.
As part of this capital expenditure, spending will rise from Rs 98 crore in FY24 to Rs 107 crore in FY25, Rs 206 crore in FY26, Rs 386 crore in FY27, and Rs 632 crore in FY28 alone. Of this total outlay, Rs 864 crore will be spent toward strengthening its existing verticals, while the remaining will be used for newer verticals.
This capex push will significantly expand manufacturing capacity from the existing 3 lakh MT in FY24 to over 7 lakh MT by FY28 across lead, aluminium, plastic, and the newly added rubber recycling segment. The rising investment highlights Gravita’s strategy to diversify its portfolio, scale high-growth verticals, and build a multi-material recycling ecosystem over FY28.
Company’s MOAT
Gravita India has a strong moat as it is very hard for new players to enter this business segment, as it has a high barrier to entry. The company has import licences, OEM approvals, technical expertise, and global procurement networks that take years to build. Its large network of scrap yards, touchpoints, and long-term customer relationships gives it priority access to raw materials at competitive prices, an advantage that smaller players cannot replicate easily.
On top of that, Gravita operates across 34+ countries with facilities spread across Asia, Africa, Europe, and the Americas. This global footprint helps it reduce logistics costs, stay close to raw material sources, and serve customers faster. With 12 recycling plants, high capacity utilisation, strong value-added products, a diversified customer base worldwide, and a solid order book of over 60,000 metric tonnes, Gravita enjoys scale, efficiency, and trust that together create a powerful and sustainable competitive edge.
Valuation
At present, Gravita India is trading at a P/E ratio of 35.50x, which is significantly greater than the industry average of 21.57x. The company’s valuation is also higher when compared to its own historical range – the P/E ratio averaged over 5 years is 21.8x and over 10 years is 21.7x. This means that the market is pricing the stock at a premium, probably signalling higher growth anticipations and the company’s spreading multi-vertical recycling model.
It’s also worth noting that Gravita India has a very small amount of debt and a robust asset base, as indicated by its solid balance sheet. In addition, the firm has been continuously producing positive cash flows from its main operations over the last seven years. Such consistent cash flow and low debt position make the company financially secure and enable it to pursue its growth plans over the long run.
Thus, Gravita India seems to be moving towards a fresh growth phase very soon with its expansion plans, improvement in profitability, and diversification into new recycling segments. Still, the firm path will be determined by the efficiency of the company’s execution of the planned capex, the scale of new verticals, and margin management across segments over the next several years.
Written by Satyajeet Mukherjee
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