Gravita India’s Unprecedented 1550% Surge: What Lies Ahead

In the realm of investing, finding a stock that delivers exceptional returns in a short span is the dream of every investor. Gravita India has transformed this dream into reality, offering an astounding 1550% surge in its shares over the past three years, hinting at a promising future.

From ₹193 per share two years ago, the stock has skyrocketed by 286% to its current price of ₹746.50. Even more impressively, it has leaped by a staggering 1558% from its low of ₹45 in August 2020.

Notably, Gravita India has consistently delivered over 50% annual returns for three consecutive years. In 2020, it saw a 60% return, followed by an astonishing 280% the following year. This trend continued with a 53% return in 2022, and in the current year, the shares have surged by 66.26%. Over the past decade, the stock has ended six calendar years in the green.

Founded in 1992 in Jaipur, Gravita India specializes in lead, aluminium, plastics, and rubber recycling, serving domestic and global markets. With a presence in 38 countries, the company caters to more than 375 customers worldwide and over 230 customers across 22 states in India.

Analysts have initiated coverage with a ‘buy’ rating and a target price of ₹1,008 per share, indicating a potential upside of 35%.

The company’s expansion plans are notable; it aims to increase its installed capacity from 2.33 lakh MT per annum to 4.34 lakh MT per annum by FY26E, primarily funded through internal accruals.

Recycling is poised to dominate the metals industry due to cost-effectiveness and ecological benefits. Gravita India’s foray into steel recycling and paper recycling is expected to enhance margins, and its exploration of lithium recycling feasibility could create another revenue stream.

A government policy mandating the retrieval of products by Original Equipment Manufacturers (OEMs) for recycling is set to fuel growth for recyclers like Gravita India.

Stringent environmental norms will level the playing field for organized recyclers. Analysts project around 30% of the market share will transition from the unorganized to organized sector.

In the realm of energy storage, lead and recycled lead remain vital, especially in electric vehicles where they support lighting, ignition, and power systems.

Analysts predict Gravita India’s net profit to double from ₹204 crore in FY23 to ₹435 crore by FY26E. The company’s journey represents a compelling narrative of success as it navigates sustainability, innovation, and growth.

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