 "Gravita India")
Shares of Gravita India hit a 52-week high of Rs 567.65 as they rallied 11 per cent on the BSE in Wednesday’s intra-day trade amid heavy volumes. In past two trading days, the stock of recycling company has surged 12 per cent after the company reported a steady earnings for the March quarter (Q4FY23). The market price of the company surpassed its previous high of Rs 539.45, touched on February 13, 2023.
At 12:13 PM; Gravita quoted 9 per cent higher at Rs 558.05, as compared to 0.42 per cent decline in the S&P BSE Sensex. A combined 2.2 million equity shares representing 3.1 per cent of total equity of Gravita India had changed hands on the NSE and BSE.
In Q4FY23, Gravita’s EBITDA (earnings before interest, taxes, depreciation, and amortization) margin rose 56 bps year-on-year (YoY) to 11 per cent, on lower opex. Reported lead EBITDA/mt was stable YoY. Revenue from Operations grew 12 per cent YoY at Rs 749 crore. Profit after tax was rose 8.5 per cent to Rs 63.81 crore.
On project updates, Gravita said Phase 2 of the Mundra plant was commissioned in April 2023, with increased lead recycling capacity of 60ktpa (vs. 40.5ktpa earlier). This includes shifting of the 19.5ktpa Gandhidham capacity to Mundra. Plastic recycling of 7.5ktpa has also been commissioned at Mundra, besides red lead (VAP) capacity of 4.8ktpa. Commissioning of 4ktpa each of Al recycling capacity at Senegal & Togo led to Al volume growth of 31 per cent YoY in Q4FY23.
The Ghana plant added 1.2ktpa of plastic recycling capacity, as well as rubber recycling capacity. Due to plastic scrap availability issues in Nicaragua, Gravita is in the process of winding up operations there, replacing these with a new plant at Dominican Republic. Gravita has signed an MOU with a JV partner in Oman, to set up a 6ktpa lead recycling plant (Ph-1), analysts at Emkay Global Financial Services said in its result update.
The brokerage firm value Gravita at Mar-25E DCF-based target price of Rs 650 per share, implying FY25 target PER of ~14.2x, which is reasonable. Highly adverse commodity prices, shutdowns/project delays, competition, and country-specific risks are key risks, the brokerage firm said.
Meanwhile, in an other development, Gravita Group raised EURO 34 million ESG long term loan facility from European Developmental Financial Institutions. This facility enables Gravita’s offshore businesses to gain financial independence for their capex and working capital needs. The facility is guaranteed by the parent Gravita India.
The recent ESG funding is a significant milestone in Gravita's journey towards becoming the most valuable company in the recycling industry globally, the company said.
