Monopoly recycling stock with over 5,00,000 MTPA CAPEX plan for FY27 to keep on your radar

India’s recycling industry is undergoing a transformative shift, with significant growth expected across multiple segments. This expansion is fueled by technological innovations, government initiatives, and the active involvement of the informal sector.

The shares of a leading recycling company involved in lead and aluminum processing, trading lead products and aluminum scrap, and executing turn-key lead recycling projects, are set to target a 5,00,000+ MTPA capex plan by FY27, one to look out for. 

Price Action 

The shares of Gravita India Ltd, with a total market capitalization of Rs 13,318.73 Crore on Monday, were trading at Rs 1804.50 per share which was 0.5 percent higher than the previous closing price of Rs 1795.90. 

The shares of Gravita India Ltd have generated a multi-bagger return of 106 percent in the past year, a stellar return of 415 percent in the past three years, and an impressive 4,460 percent return in the past five years. 

Capex Plans 

The company has given guidance for robust capex plans, it has estimated a capex of 3.53L MTPA for FY25, 4.39L MTPA for FY26, and 5.05L MTPA for FY27. It has planned a capex of Rs 600+ Crore by FY27 and its capex as of December 2024 is Rs 98 Crore. 

Strategic Vision

In its Vision 2028, the company highlighted expanding its business with new recycling verticals including Lithium, Steel, Rubber & Paper. The company aims to achieve over 25 percent volume CAGR, with 35+ percent profitability growth and 25+ percent ROIC. The company is envisioned to attain over 50 percent growth in value-added products, and 30+ percent growth in Non-lead business, while reducing energy consumption by 10+ percent. 

Geographic Presence

The company has a presence across the globe with existing facilities spread across various states in India and also has international facilities in Sri Lanka and Africa. It has upcoming facilities in countries like America, Europe, and Oman. It has a strong procurement network with over 1,700 touchpoints and more than 2.5L MT scrap collection spread across countries like America, Europe, Africa, Asia, and Australia. The company serves more than 200 domestic customers in 20 states in India and over 50 overseas customers in 30 countries. 

Also read: 20% Upper Circuit: Chemical stock skyrockets after Govt Waives Off over ₹1,300 Cr Debt

Strong Partnerships 

The company has strong partnering relationships with major players like Amara Raja Energy & Mobility Ltd, Samvardhana Motherson International Ltd, Polycab Ltd, TVS Group, KEI Industries Ltd, TATA Group, Hitachi Energy India Ltd, Panasonic Group, etc. 

Key Developments

The company’s African subsidiary has commenced commercial production of recycled aluminum alloys with a capacity of 4000 MTPA, aiming to expand to 8,000 MTPA in the future. The company has successfully raised Rs 1,000 Crores through QIP for growth initiatives, including capacity expansion and venturing into new verticals. 

Financials

The company reported an increase of 31.5 percent YoY in revenue from operations from Rs 758 Crore in Q3FY24 to Rs 996 Crore in Q3FY25. Their Net Profits also increased by 29 percent YoY from Rs 61 Crore to Rs 78 Crore over the same period. 

Key Ratios

The company boasts a lower D/E ratio of 0.6, and its P/E ratio stands at 45.13X, which is slightly higher than the industry average of 33X. It has an ROE of 29 percent with an ROCE of 24 percent. The company has a strong 3-year CAGR for Revenue at 31 percent, Net Profit at 62 percent, and Operating Profit at 45 percent.

About Gravita India Ltd 

Gravita India Ltd is a leading player in the recycling industry, specializing in the recycling of lead, aluminum, and plastic. The company focuses on sustainable practices to provide eco-friendly solutions while ensuring high-quality products. With a strong global presence, Gravita emphasizes innovation and technology in its operations. Their commitment to environmental responsibility and social impact drives their continued growth and success. 

Written By Adhvaitha Nayani

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