GRAVITA - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📈 Investment Analysis: Gravita India Ltd. (GRAVITA)

Investment Rating: 4.2

🌱 Long-Term Investment Potential

Gravita India, operating in the recycling space—especially lead and aluminium—is a high-ROCE, low-leverage growth story. The company demonstrates strong profitability, capital efficiency, and sectoral relevance in the ESG and circular economy theme. It’s a robust candidate for long-term portfolios focused on value with sustainability.

✅ Strength Signals

ROCE & ROE over 21% — Exceptional capital efficiency.

Debt-to-Equity: 0.14 — Strong balance sheet, minimal financial risk.

PEG Ratio: 1.34 — Growth priced reasonably, though edging toward premium.

EPS: ₹46.5 & PE of 40.7 — Expensive vs Industry PE (18.8), but justified given ROCE & earnings growth.

Quarterly PAT Consistency (~₹93 Cr.) — Stable earnings.

FII Interest Rising (+1.06%) — Foreign investors accumulating.

Positive MACD & RSI (~59) — Solid technical momentum.

⚠️ Weak Spots

Dividend Yield: 0.34% — Minimal for income seekers.

Decline in DII Holding (-1.03%) — Could reflect valuation concerns.

Volume below weekly average — Soft short-term participation.

Price far from 52W high (₹2,700) — Sentiment recovery pending.

🎯 Ideal Entry Price Zone

₹1,770–₹1,825

Between DMA50 and DMA200 — good support zone.

Ideal for staggered entry as RSI moves toward 50.

Entry preferable if PEG moves closer to 1 and EPS trend remains steady.

⏳ Strategy for Existing Holders

📆 Suggested Holding Period

24–36 Months

Long-term sustainability focus, export-led growth, and global recycling push could unlock re-rating.

🚪 Exit Strategy

Exit if

Price crosses ₹2,650–₹2,700 without ROCE >22% or PEG staying <1.5.

ROE slips below 18% over 2 quarters.

RSI crosses 75 with weak volumes (profit-booking trigger).

Major drop in FII interest or debt spikes above 0.3 without business expansion.

💡 Final Thought

Gravita is like a lean green cash machine, quietly building value in an overlooked segment. While valuations are a bit rich, its fundamentals stand tall. If management maintains discipline and global tailwinds continue, it could turn into a mid-cap multi-year compounder.

Want me to run a peer comparison with India’s other recyclers or ESG plays like Hindustan Zinc or Ecoreco? I’ve got some insights that might surprise you.

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