Brokerage House Emkay sees more upside multibagger stock Gravita India which has jumped nearly 200 per cent this year (Year-to-date or YTD). It has started coverage with buy recommendation on the shares of Gravita India. Gravita is one of India’s largest lead-recyclers with 18% share in the organized sector.
“Gravita enjoys a prominent position (accounting for around 60% of the scrap collected) in its African operations, where it is further expanding capacity. With the expansion of aluminum and plastic recycling at its existing facilities, Africa’s profitability (ROIC) should further improve from current 20%+ levels,” the note said.
Wider scrap availability will also help in optimizing logistics and working capital. In addition, increase in toll-recycling volumes in partnership with Indian battery OEMs should boost ROIC, given the low working capital requirement in this segment, it added.
Emkay’s bullish trend on metal stocks. Comes with a target price of 380 per share, which means there is a potential for over 50% growth on the stock from current levels. However, it sees volatility in volume/margins led by commodity prices – hedging strategies and increased share of value-added products will help mitigate this risk, with project delays and unfavorable regulations as major downside risks.
Gravita aims to diversify into segments such as rubber, copper and brass, steel, paper and lithium-e waste. “We estimate the potential for 1 billion+ PAT (Profit After Tax or Net Profit) from new ventures in FY26, requiring incremental investment of 5.5 billion,” the brokerage note highlighted.
Gravita India Limited is one of the largest Lead Producer in India. It is a manufacturer and exporter of Lead Metals, Specialized Lead Alloys, Lead Oxide, Lead Sheet, Lead Powder.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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