Buy Gravita India; target of Rs 2300: Motilal Oswal

Motilal Oswal's research report on Gravita India

Gravita India (GRAVITA) recorded a healthy 15% YoY revenue growth, underpinned by a 12% YoY rise in overall volumes, mainly due to a 10% YoY volume growth in Lead. The aluminum business volumes also surged 96% YoY (on a low base). EBITDA grew ~22% YoY, led by volume growth and a 9% YoY increase in overall EBITDA/Kg. GRAVITA remains on track to achieve its ‘Vision 2029’ targets, aided by capacity expansion (to ~450KTPA/700KTPA in FY26/FY28) initiatives across both domestic and overseas markets. Future growth will be driven by a continued focus on raising the share of value-added products (50%+ by FY29) and higher contribution (30%+) from non-lead business segments. We broadly maintain our FY26E/FY27E EPS and reiterate our BUY rating on the stock with a TP of INR2,300 (premised on 31x FY27E EPS).

Outlook

We expect a revenue/Adj. EBITDA/Adj. PAT CAGR of 26%/28%/32% over FY25-27. We broadly retain our FY26E/FY27E EPS and reiterate our BUY rating on the stock with a TP of INR2,300 (premised on 31x FY27E EPS).