⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
GRAVITA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | GRAVITA | Market Cap | 11,537 Cr. | Current Price | 1,562 ₹ | High / Low | 2,170 ₹ |
| Stock P/E | 38.3 | Book Value | 231 ₹ | Dividend Yield | 0.41 % | ROCE | 21.4 % |
| ROE | 18.5 % | Face Value | 2.00 ₹ | DMA 50 | 1,692 ₹ | DMA 200 | 1,744 ₹ |
| Chg in FII Hold | 1.10 % | Chg in DII Hold | -0.16 % | PAT Qtr | 72.2 Cr. | PAT Prev Qtr | 87.2 Cr. |
| RSI | 39.8 | MACD | -59.4 | Volume | 1,36,523 | Avg Vol 1Wk | 2,45,768 |
| Low price | 1,380 ₹ | High price | 2,170 ₹ | PEG Ratio | 0.57 | Debt to equity | 0.11 |
| 52w Index | 23.0 % | Qtr Profit Var | 111 % | EPS | 40.8 ₹ | Industry PE | 20.2 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT declined from 87.2 Cr. to 72.2 Cr., though YoY profit variation stands at 111%, showing strong annual growth momentum.
- Margins: ROE at 18.5% and ROCE at 21.4% reflect healthy profitability and efficient capital utilization.
- Debt Ratios: Debt-to-equity at 0.11 indicates a low-leverage balance sheet.
- Cash Flows: Stable operating cash flows supported by recycling and metals business.
- Return Metrics: EPS at 40.8 ₹ highlights solid earnings power.
💹 Valuation Indicators
- P/E Ratio: 38.3, above industry PE of 20.2, suggesting premium valuation.
- P/B Ratio: ~6.8 (Current Price / Book Value), reflecting expensive valuation relative to assets.
- PEG Ratio: 0.57, attractive, showing growth potential at reasonable valuation.
- Intrinsic Value: Current price (1,562 ₹) is below recent highs, offering upside potential if earnings sustain.
🏢 Business Model & Competitive Advantage
- Operates in recycling and metals, with focus on lead, aluminum, and plastics.
- Competitive advantage lies in cost efficiency, global presence, and diversified product portfolio.
- Resilient business model with steady demand for recycled materials and sustainability-driven growth.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 1,450 ₹ – 1,520 ₹ (near 52-week low and below DMA 50).
- Long-Term Holding: Suitable for long-term investors seeking exposure to recycling and sustainability themes, though short-term volatility should be expected.
Positive
- Low debt-to-equity ratio (0.11).
- Strong ROE and ROCE.
- EPS of 40.8 ₹ indicates solid earnings.
- FII inflows (+1.10%) show foreign investor confidence.
Limitation
- P/E ratio significantly above industry average.
- P/B ratio indicates premium valuation.
- Dividend yield at 0.41% is modest.
- Quarterly PAT decline shows short-term pressure.
Company Negative News
- Reduction in DII holdings (-0.16%) shows cautious domestic sentiment.
- Weak technical indicators (RSI 39.8, MACD -59.4) reflect bearish momentum.
Company Positive News
- Strong YoY profit growth of 111% despite quarterly dip.
- Rising FII inflows (+1.10%) support investor confidence.
Industry
- Recycling and metals sector benefits from sustainability-driven demand.
- Industry PE at 20.2 reflects fair valuations and moderate optimism.
Conclusion
- Gravita is a fundamentally strong recycling and metals company with healthy profitability and low debt.
- Valuation is premium, but PEG ratio suggests reasonable growth-adjusted value.
- Best suited for long-term investors seeking exposure to sustainability themes, with entry near support levels for better risk-reward.
Would you like me to also prepare a peer comparison with companies like Hindustan Zinc or Nalco to highlight Gravita’s relative positioning in the metals and recycling sector?