Buy Gravita India; target of Rs 1650: Emkay Global Financial

Emkay Global Financial is bullish on Gravita India has recommended buy rating on the stock with a target price of Rs 1650 in its research report dated September 10, 2024.

Broker Research

September 11, 2024 / 14:15 IST

BUY

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on Gravita India

The GST Council has introduced the reverse charge mechanism (RCM) on supply of metal scrap by a unregistered person to a registered person. About 65% of the lead recycling market is unorganized, which gets meaningful cost advantage (18%) over organized players through GST evasion. With the introduction of RCM, the responsibility of deducting and depositing of GST would now transfer to the buyer of scrap. We expect this development to be significantly beneficial for GRAV. This would result in a completely transparent system over time and the undue advantage enjoyed by the unorganized segment so far would start receding. GRAV could now tap this large market segment for procurement of scrap. With this note, coverage of GRAV is transferred to Amit Lahoti.

Outlook

We expect this development to be significantly beneficial for GRAV. At this stage, GRAV does not procure scrap from the retail segment as the company would lose out on input tax credit – For example, when GRAV buys scrap worth Rs100 from the retail segment, it pays Rs100 + 18% GST to the seller.

For all recommendations report, click here