GRAVITA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | GRAVITA | Market Cap | 12,031 Cr. | Current Price | 1,630 ₹ | High / Low | 2,170 ₹ |
| Stock P/E | 40.0 | Book Value | 231 ₹ | Dividend Yield | 0.39 % | ROCE | 21.4 % |
| ROE | 18.5 % | Face Value | 2.00 ₹ | DMA 50 | 1,557 ₹ | DMA 200 | 1,655 ₹ |
| Chg in FII Hold | -1.81 % | Chg in DII Hold | 0.44 % | PAT Qtr | 72.2 Cr. | PAT Prev Qtr | 87.2 Cr. |
| RSI | 59.1 | MACD | 40.5 | Volume | 2,23,127 | Avg Vol 1Wk | 2,31,196 |
| Low price | 1,267 ₹ | High price | 2,170 ₹ | PEG Ratio | 0.59 | Debt to equity | 0.11 |
| 52w Index | 40.2 % | Qtr Profit Var | 111 % | EPS | 40.8 ₹ | Industry PE | 19.7 |
📊 Financials: GRAVITA demonstrates strong fundamentals with ROE at 18.5% and ROCE at 21.4%, reflecting efficient capital utilization. EPS at ₹40.8 supports earnings strength. Debt-to-equity at 0.11 indicates a low-leverage balance sheet. Quarterly PAT declined to ₹72.2 Cr. from ₹87.2 Cr., showing short-term earnings pressure despite long-term stability.
💹 Valuation: Current P/E of 40.0 is significantly higher than the industry average of 19.7, suggesting overvaluation. PEG ratio of 0.59 indicates fair valuation relative to growth. Book value of ₹231 vs. CMP ₹1,630 highlights a steep P/B multiple, justified by efficiency and sectoral positioning.
🏗️ Business Model: GRAVITA operates in recycling and metals, with a focus on lead, aluminum, and plastics. Its competitive advantage lies in cost-efficient operations, global presence, and sustainability-driven demand.
📈 Entry Zone: Accumulation near ₹1,550–₹1,570 (close to DMA50 support) offers favorable risk-reward. RSI at 59.1 indicates neutral momentum, while MACD at 40.5 shows bullish strength. Exit strategy near ₹1,700–₹1,720 with stop-loss around ₹1,520.
🕰️ Long-Term Holding: Strong efficiency metrics, low debt, and sustainability-driven demand support long-term holding. Valuation premium and recent profit decline warrant cautious accumulation.
Positive
- Strong ROCE (21.4%) and ROE (18.5%)
- Low debt-to-equity ratio (0.11)
- EPS of ₹40.8 supports earnings strength
- Institutional support from DII (+0.44%)
Limitation
- P/E (40.0) above industry average (19.7)
- Quarterly PAT decline (₹87.2 Cr. → ₹72.2 Cr.)
- FII holdings decreased (-1.81%)
- High P/B ratio vs. book value
Company Negative News
- Decline in quarterly profits raises concerns
- Reduced foreign institutional interest (-1.81%)
Company Positive News
- Strong efficiency metrics with low debt
- DII holdings increased (+0.44%)
Industry
- Recycling and metals sector supported by sustainability demand
- Industry P/E at 19.7 reflects moderate valuations
Conclusion
GRAVITA is fundamentally strong with efficient operations and low debt, but trades at a valuation premium compared to peers. Entry near ₹1,550–₹1,570 is favorable, with profit booking advised near ₹1,700–₹1,720. Best suited for long-term investors seeking sustainability-driven exposure with moderate risk.