Buy Gravita India; target of Rs 1900: Motilal Oswal

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Gravita India's copper segment is expected to be a key growth driver, with EBITDA/MT targeted at INR65-70k over the next few quarters, improving to INR80-90k over the next 2-3 years.
  • The company is diversifying its procurement network to strengthen supply chain resilience, including the establishment of a wholly-owned US subsidiary to source scrap across the US and neighboring countries.
  • Lead volumes are expected to recover from 3QFY27, supported by ramp-up in international sourcing and improved domestic procurement, with a target of 18-20% volume CAGR over the next three years.
  • The company's aluminum business is growing, with revenue increasing 46% YoY, and the plastic segment is maintaining strong growth momentum.

Thesis Validation Checklist

  • Investors should watch for signs of improvement in lead volumes, copper EBITDA margins, and aluminum revenue growth over the next 12 months.
  • The company's ability to establish a strong procurement network in the US and other international markets will be crucial to its growth plans.
  • Any positive developments in the lithium-ion battery recycling market could provide an additional growth driver for the company.