Gravita India Q2FY20 production grew 25 per cent

Gravita India's consolidated revenue for the quarter Q2FY20 came in at Rs. 327.67 crores against Rs. 292.72 crores in the corresponding quarter in the last fiscal, registering an 11.9 per cent Y-O-Y increase. This was supported by higher sales volume in the lead division. However, the sale in the aluminum division was on the lower side due to the slowdown in the automotive industry.

The EBITDA for the quarter grew by 44.1 per cent Y-o-Y to Rs. 20.68 crores from Rs. 14.35 crores in Q2FY19, with a corresponding margin expansion of 141 bps. As compared to Rs. 6.37 crores in Q2FY19, PAT for Q2FY20 was recorded at Rs. 13.79 crores, with a Y-o-Y increase of 116.5 per cent.

The sales quantity stood at 18,753 MT, 2,512 MT, and 2,807 MT for lead, aluminum, and plastics, respectively.

During the quarter in review, the overall production has increased by 25 per cent Y-o-Y, thanks to higher capacity utilization at existing plants and additional capacities installation at new facilities in Ghana and Tanzania. Further, the company has been able to procure 30,086 MT of battery or Lead scrap during Q2FY20, indicating a growth of approximately 18% from the corresponding quarter of the previous year.

The sales realization of the Lead division of the company improved in Q2FY20 due to the soaring sale of lead alloys and value-added products (VAP). The sale from lead alloys and VAP contributed approximately 35% of the total turnover, with volume growth of 68% against the last quarter of the previous year.

The sales realizations of the company's plastic division were adversely impacted during the reviewed quarter due to the ongoing US-China trade war, which has resulted in a surplus of plastic scrap in the US, putting pressure on the realizations and, consequently, incurring losses. Although there has been a significant focus on the recycling of plastic products and the surplus availability of plastic scraps at bottomed out prices, which will augur well for the company in the coming quarters.