The shares of the largest lead producer in India is focus after Motilal Oswal expects the stock to surge by another 37 percent. In this article, we will try to dive deeper into the rationale behind this uptick.
With a market capitalization of Rs 12,423 crores, the shares of Gravita India Ltd are currently trading at Rs 1,683 per share, down by 37.67 percent from its 52-week high of Rs 2,700 per share. Over the last five years, the stock has delivered a multibagger return of 3,973.70 percent. In terms of the Relative Strength Index (RSI), the stock is trading at an RSI of 29.55 which is in the oversold zone, signalling that the stock could potentially bounce back from current levels
Leading brokerage firm Motilal Oswal has assigned a buy rating on the stock with a target price of Rs 2,300, signaling an upside potential of 37 percent from its previous day closing price of Rs 1678.80.
The brokerage firm cited that Gravita India anticipates delivery of robust earnings growth driven by its strategic capacity expansion that includes a transition toward higher margin value-added lead products, along with new segments in rubber and lithium-ion recycling.
Enhanced scrap availability domestically – partly from the strict EPR norms – allowed Gravita to increase its local sourcing by 60% in FY25, with a reduction in working capital days from 85 in FY25 to 76 in FY27, and improvement in cash flows.
Gravita is targeting to grow its non-lead segments (rubber, lithium-ion) to 30% of revenue by FY29, deploying a 70% CAGR for rubber alone over the next 3-4 years. Value-added lead products should also enable the company to sustainably support margins and profitability moving forward.
Financial Highlights
Gravita India Ltd reported a consolidated revenue of Rs 3,869 crores in FY25, up by 22.4 percent from Rs 3,161 crores in FY24. It posted a net profit of Rs 313 crores in FY25, up by 29.34 percent from Rs 242 crores in FY24.
Gravita India Limited is a recycling and manufacturing firm that deals in lead, aluminium, and plastic recycling and manufacturing. The firm produces products such as pure lead, lead alloys, aluminium alloys, and plastic recycled granules. It also deals in turnkey recycling solutions and consultancy services, and trading in scrap material in the form of batteries, aluminium, plastic, and rubber.
Written by Satyajeet Mukherjee
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