Buy Gravita India; target of Rs 2200: Motilal Oswal

BUY

Motilal Oswal's research report on Gravita India

Gravita India (GRAVITA) reported 12% YoY revenue growth in 2QFY26, driven by a 4% YoY rise in total volumes, mainly led by 5% YoY volume growth in Lead. Aluminum business volumes surged 27% YoY, while plastic volumes declined 32% YoY. EBITDA grew only ~10% YoY, owing to muted volume growth and a 4% YoY increase in overall EBITDA/kg. However, GRAVITA remains on track to achieve its ‘Vision 2029’ targets, aided by capacity expansion (700KTPA by FY28) initiatives for domestic and overseas markets. Future growth will be driven by its continued focus on increasing the share of value-added products (50%+ by FY29) and higher contribution (30%+) from non-lead business segments.

Outlook

We expect a CAGR of 25%/28%/29% in revenue/adj. EBITDA/adj. PAT over FY25 28. We broadly retain our FY26E/FY27E/FY28E EPS and reiterate our BUY rating on the stock with a TP of INR2,200 (premised on 30x FY27E EPS).

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