Shares of Gravita India Ltd saw a 4% surge in Thursday's trading session, reaching a high of Rs 1,400.75. This uptick followed the company's announcement of robust financial results for the September quarter of FY27, which also prompted leading brokerage firms to reaffirm their positive outlook.
Strong Q2 FY27 Performance Drives Optimism
Gravita India reported a significant 38% year-on-year increase in consolidated revenue, reaching Rs 1,427 crore for the second quarter of the fiscal year 2027. Adjusted Ebitda also grew by 28% year-on-year to Rs 143 crore, maintaining an adjusted Ebitda margin of 10%. Net profit for Q2 FY27 stood at Rs 102 crore, a 6% rise from Rs 96 crore in the corresponding quarter last year.
Axis Securities noted that the adjusted Ebitda was largely in line with their estimates, while revenue surpassed expectations by 5%. The adjusted Ebitda margin, though slightly down from 10.75% a year earlier, showed a sequential improvement of 25 basis points.
Analysts Maintain 'BUY' Ratings and High Targets
Following the strong quarterly performance, Axis Securities reiterated its 'BUY' recommendation for Gravita India, setting a target price of Rs 2,270 per share. Similarly, Emkay Global maintained its 'BUY' rating, with a target price of Rs 2,100, signaling continued confidence in the company's growth trajectory and market position.
Copper Business Boosts Revenue, Lead Volumes Face Headwinds
The company's copper business played a crucial role in Q2 FY27, contributing Rs 420 crore to the total revenue. This strong performance was aided by the integration of Rashtriya Metal Industries Ltd (RMIL), which recorded an Ebitda margin of 8.5% during the quarter. Copper Ebitda per metric tonne significantly increased to Rs 84,671 from Rs 55,151 in the previous quarter, according to Axis Securities.
However, Gravita's lead recycling volumes experienced a decline, falling 11.3% year-on-year to 39,203 metric tonnes. This reduction was primarily attributed to raw-material shortages and supply-chain disruptions stemming from West Asia and Red Sea transit delays, rather than a dip in end-user demand. Management anticipates an improvement in lead volumes from Q3 FY27 as sourcing diversification and domestic procurement efforts intensify.
Ambitious Capacity Expansion Plans Underway
Looking ahead, Gravita India has outlined substantial capital expenditure plans, earmarking Rs 1,680 crore through FY29. This investment includes Rs 815 crore for existing businesses and Rs 865 crore for new verticals like copper and lithium-ion battery recycling. The company aims to boost its installed recycling capacity from approximately 480,000 metric tonnes per annum to over 800,000 MTPA by FY29. Key projects include developing a 29,400-MTPA copper recycling facility in Mandvi, Gujarat, and adding 59,200 MTPA of copper recycling capacity at Mundra in phases by March 2029.