Gravita India receives buy recommendation from Axis Direct; Check the target

Synopsis:- Axis Direct maintained a ‘Buy’ call with a ₹2,200 target, implying ~43% upside. Volume recovery is expected as 125,000 tonnes of new capacity come online by Q4FY26. Plastic volumes jumped 55% QoQ, margins improved to 12%, and management targets 25% volume CAGR with ROIC above 25% over the medium term.

India’s industrial minerals sector, vital for cement, glass, ceramics, and chemicals, drives infrastructure growth. In FY25, it achieved record outputs with limestone production up 1.2% to around 400 MMT annually, reflecting booming construction demand. The broader mining index hit 156.8 in March 2025, up 0.4% YoY, fueled by non-metallic gains amid a Rs 45,397 crore production value in early FY26. This positions the sector for sustained expansion, supporting India’s economic surge.

With a market capitalisation of Rs 11,469.46 crore, the shares of Gravita India Ltd closed at Rs 1,553.95  per share, increased around 5.92 percent as compared to the previous closing price of Rs 1,467.10 apiece.

Brokerage Recommendation

Axis Direct has issued a ‘Buy’ recommendation on this recycling stock, assigning a target price of Rs 2,200 per share. The brokerage expects a potential upside of around 42% from Wednesday’s closing price, citing improving business fundamentals and a favourable long-term outlook supporting further stock appreciation.

As per the brokerage, overall volumes saw only a marginal sequential improvement in Q3FY26 due to temporary constraints. Plastic volumes rebounded sharply by 55% QoQ to 3,162 tonnes. However, lead volumes lagged expectations due to capacity expansion delays, while aluminium volumes declined YoY and QoQ amid high metal prices affecting scrap availability.

Furthermore, Management remains optimistic that volume pressures are transitory. Lead volumes are expected to recover with upcoming capacity additions, while aluminium scrap availability should improve as price volatility normalises. With regulatory hurdles largely addressed, the company expects operating momentum to strengthen gradually over the next few quarters, supporting a healthier volume trajectory.

Additionally, Capacity expansion is nearing completion, with ~125,000 tonnes of incremental lead capacity set to be commissioned by Q4FY26 across Mundra and Jaipur. This positions the company to scale capacity to ~7+ lakh MTPA by FY28. Key projects, including lithium-ion battery and rubber recycling, are progressing well, enabling volume acceleration from Q1FY27 onward.

Management reiterated a strong medium-term growth outlook, targeting ~25% CAGR in volumes and ~35% CAGR in profits while sustaining ROIC above 25%. Volume growth is expected to accelerate with upcoming capacity additions. Over the next 3–4 years, the company plans to scale core and new segments, while entering areas like paper and steel only with clear demand visibility.

Financials

The company reported steady financial growth in Q3FY26, with revenue rising 2.1% YoY to  Rs 1,017 crore. Profitability improved at a faster pace, as net profit increased 24% to  Rs 97 crore, reflecting better margins, cost discipline, and improved operational efficiency despite modest top-line growth.

Over the past one year, Gravita India Ltd has shown steady improvement in operating performance. Operating profit increased from ₹81 crore in December 2024 to ₹120 crore in December 2025. Correspondingly, operating profit margin (OPM) expanded from 8% to 12%, reflecting better cost control, improved realisations, and operating leverage across its recycling operations.

Gravita India Ltd is a leading Indian recycling company engaged in processing lead, aluminium, plastics, and rubber. With integrated operations across India and overseas, the company focuses on sustainable resource recovery, circular economy solutions, and value-added recycling, supported by expanding capacities and a strong export-oriented business model.

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