At a Glance
Gravita India, the recycling czar, reported Q1 FY26 revenue of ₹1,040 Cr (+14.5% YoY) with PAT steady at ₹93 Cr. Margins held at 10%, showing the company can squeeze profit out of scrap. Promoter holding dipped to 55.9%, FIIs climbed to 15%, and the stock trades at ₹1,815 with a pricey P/E of 39.7. The company is rolling out global expansions while facing rising working capital days.
Introduction
Think of Gravita as the Midas of metal scrap—everything it touches turns to lead, aluminium, and cash. With 49% CAGR profit growth over 5 years, this Rajasthan-based recycler has gone from local battery junkyards to a global sustainability poster child. Yet, with promoter stake slipping and valuation looking like a premium bottle deposit, investors wonder if the golden run continues.
Business Model (WTF Do They Even Do?)
Gravita operates across four verticals:
- Lead Recycling – flagship, ~70% revenue.
- Aluminium Recycling – growing segment.
- Plastic Recycling – small but expanding.
- Turnkey Projects – EPC-style for recycling plants.
They recycle batteries, cables, scrap aluminium, plastics, and rubber, exporting products to 50+ countries. Imagine a scrapyard that prints money.
Financials Overview
- Revenue (Q1 FY26): ₹1,040 Cr (+14.5% YoY)
- Net Profit: ₹93 Cr (+38.2% YoY)
- EBITDA: ₹101 Cr (OPM 10%)
- ROE: 21.5%
- ROCE: 21.6%
Verdict: Profits shining, but growth is slowing vs historical standards.
Valuation
- P/E: 39.7× (expensive for a commodity player)
- EV/EBITDA: ~22× (premium territory)
- Fair Value Range: ₹1,400–₹1,900
Market already pricing in global expansion success—risky if hiccups occur.
What’s Cooking – News, Triggers, Drama
- Capex: ₹1,500 Cr by FY28 for new recycling plants.
- Acquisitions: Waste Tyre plant in Romania, stake in Navam Lanka (Sri Lanka).
- Penalties: GST & groundwater fines totaling ₹3.7 Cr—cost of doing business.
- Promoter Holding: down to 55.9% (-3.4% QoQ), while FIIs increased stakes to 15%.
- QIP: ₹640 Cr raised via equity placement in FY25.
Corporate Spice: Foreign investors circling while promoters cash out a bit—interesting dynamics.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 1,205 | 1,602 | 2,515 |
| Liabilities | 630 | 765 | 460 |
| Net Worth | 620 | 1,034 | 2,070 |
| Borrowings | 348 | 548 | 286 |
Commentary: Debt halved, reserves ballooned—financially lean and clean.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 200 | 42 | 282 |
| Investing | -105 | -158 | -864 |
| Financing | -87 | 121 | 640 |
Punchline: Heavy investing outflows thanks to global expansions—QIP rescued cash levels.
Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 29% | 28% | 21% |
| ROCE % | 32% | 28% | 22% |
| P/E | 29× | 34× | 39.7× |
| PAT Margin % | 7% | 8% | 8% |
| D/E | 0.3 | 0.5 | 0.1 |
Verdict: Margins stable, leverage low, but P/E screaming premium.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,801 | 3,161 | 3,869 |
| EBITDA | 207 | 287 | 324 |
| PAT | 204 | 242 | 313 |
Commentary: Topline and profits growing, but OPM stuck at 8–10%.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Lloyds Metals | 6,721 | 1,450 | 53× |
| NMDC | 23,906 | 6,532 | 9.5× |
| GMDC | 2,765 | 666 | 19.6× |
| MOIL | 1,585 | 382 | 19.8× |
| Gravita India | 4,001 | 338 | 39.7× |
Humour: Priced like a tech stock, but still digging through scrap.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 55.9% (falling trend)
- FIIs: 15.1% (rising trend)
- DIIs: 4.4%
- Public: 23.3%
Foreign investors clearly love the “green” recycling story.
EduInvesting Verdict™
Gravita India is a rare metal recycler with global ambitions, strong balance sheet, and solid growth. However, the sky-high valuation and falling promoter stake add drama to the narrative.
Final Word: Gold from garbage, but don’t overpay for the glitter.
Written by EduInvesting Team | 28 July 2025
SEO Tags: Gravita India, Lead Recycling, Aluminium Recycling, Sustainability Stocks, Circular Economy
