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Brokerage house Emkay sees further upside on multibagger stock Gravita India that has rallied around 200% this year (year-to-date or YTD). It has initiated coverage on Gravita India shares with a Buy recommendation. Gravita is one of India’s largest Lead-recyclers with an 18% share in the organized segment. 

“Gravita enjoys a dominant position (around 60% share of scrap collected) in its African operations, where it is further expanding capacity. Africa profitability (RoIC) should improve further from current 20%+ levels, with the expansion in Aluminum and Plastics recycling in its existing facilities," the note stated.

Wider scrap availability should help optimize logistics and working capital as well. Further, the increase in toll-recycling volumes in partnership with Indian battery OEMs should boost RoIC, given the low working-capital needs in this segment, it added.

Emkay's bullish stance on the metal stock comes with a target price of 380 per share, implying over 50% upside potential on the scrip from its current levels. Though, it sees volatility in volumes/margins led by commodity prices - hedging strategies plus an increase in the share of value-added products would help mitigate this risk, project delays and adverse regulations as key downside risks.

Gravita aims to further diversify into segments such as Rubber, Copper & Brass, Steel, Paper and Lithium-e waste. “We estimate potential for 1 billion+ PAT (profit after tax or net profit) from new ventures in FY26, requiring incremental investment of 5.5 billion," the brokerage note highlighted. 

Gravita India Ltd is one of the largest lead producer in India. It is a manufacturer & exporter of lead metal, specific lead alloys, lead oxides, lead sheet, lead powder.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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