GRAVITA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Breakdown

Profitability

ROE: 18.5% and ROCE: 21.4% — excellent return metrics, indicating strong operational efficiency.

EPS: ₹31.1 — robust earnings base, supported by consistent quarterly PAT (~₹68–73 Cr).

Debt-to-Equity: 0.01 — virtually debt-free, a major strength in capital-intensive recycling.

Dividend & Book Value

Dividend Yield: 0.38% — modest, but consistent.

Book Value: ₹216 — implies a P/B ratio of ~7.8, high but justified by strong ROE and growth outlook.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 54.9 High vs industry average (21.4) — reflects growth premium

PEG Ratio 0.82 Attractive — growth is reasonably priced

Intrinsic Value ~₹1,550–₹1,600 CMP slightly above fair value zone

Valuation is elevated but supported by strong fundamentals and future expansion plans.

♻️ Business Model & Competitive Edge

Sector: Recycling — lead, aluminum, plastics, and expanding into lithium-ion batteries and rubber.

Strengths

Vertically integrated recycling operations across India, UAE, South Korea, and Europe

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Benefiting from India’s Battery Waste Management Rules and EPR mandates

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₹1,500 Cr capex plan to double capacity to 728 KT by FY28

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FII holding up (+1.06%) — strong foreign investor confidence.

Challenges

DII holding down (-1.03%) — some domestic caution.

PAT dipped slightly QoQ, and RSI/MACD suggest short-term technical weakness.

📉 Technicals & Entry Zone

Current Price: ₹1,682

DMA 50: ₹1,730 | DMA 200: ₹1,801 — trading below both, bearish short-term trend

RSI: 46.1 — neutral zone

MACD: Negative — momentum cooling

📌 Suggested Entry Zone: ₹1,550–₹1,600

A dip near intrinsic value or 200 DMA would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, low debt, and strategic expansion make Gravita a high-quality long-term play.

Accumulate on dips: Ideal for investors seeking exposure to circular economy themes and industrial recycling.

Analyst consensus targets range from ₹2,300 to ₹2,600, implying 40–60% upside

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. You can explore Gravita’s growth roadmap and analyst reports or read JM Financial’s deep dive on its battery recycling strategy. Let me know if you’d like a peer comparison with Hindustan Zinc or Pondy Oxides.

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stockanalysis.com

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www.jmfinancialservices.in

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trendlyne.com

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