News

Published: September 28, 2023
Updated: September 28, 2023

Gravita India's Remarkable Growth Spurs 15% Surge in Stock

In a significant development, Gravita India Ltd, a constituent of the S&P BSE Smallcap index and with a noteworthy 2.15% shareholding by Ashish Kacholia, witnessed an impressive upswing of 15% in its stock value. This article delves into the company's recent performance and its promising future prospects.

Stock Rally:

Gravita India's stock soared, closing at Rs. 928.20, up substantially from its previous closing of Rs. 805.75 on Tuesday. This surge was ignited by the release of the company's investor presentation on September 26, 2023, highlighting robust business growth.

Market Capitalization and Beyond:

The company concluded the trading session with a market capitalization of Rs. 6,408 crore, positioning itself just 4% shy of its 52-week high. Impressively, Gravita's stock was trading 17% and a remarkable 63% above its 20-day and 200-day moving averages, respectively.

Stellar Financial Performance:

Gravita India's investor presentation revealed stellar financial achievements. In FY23, the company experienced a remarkable 33% YoY revenue growth, surging from Rs. 1,894 crore to Rs. 2,524 crore. Net profits exhibited an even more striking ascent, skyrocketing by 153% YoY, from Rs. 40 crore to Rs. 101 crore. Q1 FY24 displayed continued strength, with revenue growing by 30% YoY, reaching Rs. 610 crore, and net profits impressively climbing 144% YoY to Rs. 39 crore.

Reduced Debt and Increased Growth:

Gravita reported a substantial reduction in debt by more than 40 crores while achieving an outstanding 18% volume growth YoY. Furthermore, the company strategically expanded its share of value-added products in its revenue mix, increasing from 41% to 49% in FY23. The company's Return on Capital Employed (ROCE) also remained robust, sustaining a level of 29% initially achieved in FY22.

Ambitious Vision:

Gravita India has set ambitious goals for 2027, including venturing into new recycling verticals such as Rubber, Lithium, Steel, and Paper, with the aim of achieving a 50%+ value- added share and maintaining a remarkable 25%+ revenue CAGR.

Capacity Expansion and Capital Allocation:

The company outlined substantial capacity expansion plans, with aggregate capacity set to grow from 233,919 MT in FY24 to 434,319 MT in FY26. Gravita has also provided insights into its capex allocation, with significant investments earmarked for new verticals and prudent reductions in existing verticals' capex.

Expanded Footprint and Growing Clientele:

Gravita India's footprint has expanded significantly, with the company now boasting 31 owned scrap yards compared to 29 in FY22. Scrap collection volumes also witnessed a notable increase, from 180,000 MT in FY22 to 205,000 MT in FY23. The company's reach has extended to 1,500+ touchpoints, up from 1,400 in FY22. Notably, both domestic and overseas customer bases have expanded, underlining the company's growing appeal.

Gravita India's remarkable journey of growth and expansion is underscored by its stellar financial performance, ambitious vision, and prudent capital allocation. This surge in stock value reflects not only the company's current strength but also its promising future prospects. As Gravita continues to innovate and expand its presence in recycling and related industries, investors and industry enthusiasts have ample reason to be optimistic about the company's trajectory.