4,470 Per Cent Returns: Multibagger Metal & Plastic Recycling Company Acquires 18,000 MTPA Rubber Recycling Plant in Romania with Rs 40 Crore Investment

The stock has delivered a 1-year return of 88.2 per cent and an impressive 3-year return of 432.38 per cent. The stock price has given multibagger returns of 4,470 per cent in the last five years.

Gravita India Ltd has successfully completed the acquisition of a Rubber Recycling plant in Romania through its step-down subsidiary, Gravita Netherlands BV (GNBV). This strategic move was finalised by forming a separate Special Purpose Vehicle (SPV) in which GNBV holds an 80 per cent equity stake with management control, while the remaining equity is held by Romanian partners. The total investment for this acquisition is approximately Rs. 40 crore, with GNBV contributing around Rs. 32 crore. The Romanian plant boasts a capacity of approximately 18,000 MTPA, marking a significant expansion in Gravita's recycling capabilities. This acquisition aligns with the company's growth strategy to enhance its global presence and diversify its recycling operations.

Gravita India Ltd, established in 1992, is a prominent lead producer in India, with operations spanning four key verticals: Lead Recycling, Aluminium Recycling, Plastic Recycling, and Turnkey Projects. The company specialises in recycling used batteries, cable scrap, and other materials, offering products such as lead alloys, aluminium alloys, and plastic granules. In FY24, lead products contributed approximately 88 per cent to the company's revenue, with aluminium and plastic products accounting for 8 per cent and 3 per cent, respectively. Gravita's value-added products, which include customised lead alloys and food-grade PET flakes, contributed 46 per cent to the revenue, with a target to reach 50 per cent by FY27.

The company operates multiple manufacturing facilities globally, including in India, Ghana, and Romania, with a total lead manufacturing capacity of 148,500 MT. Gravita is aggressively expanding its capacity, aiming to exceed 500,000 MTPA by FY27, supported by a capital expenditure of over Rs 600 crore. The company serves a diverse client base across 32 countries and plans to venture into new recycling verticals, including rubber and lithium.

The current stock price of Gravita India Ltd is Rs 1,871.85. The stock has a 52-week high of Rs 2,666 and a 52-week low of Rs 904.7. Gravita India Ltd has a market capitalisation of Rs 13,099 crore. The stock has delivered a 1-year return of 88.2 per cent and an impressive 3-year return of 432.38 per cent. The stock price has given multibagger returns of 4,470 per cent in the last five years. The major public shareholder is Yagyadatt Sharma Trustee on behalf of Gravita Employee Welfare Trust, holding 1.35 per cent.

In the Quarterly Results of December 2024, the company reported a revenue of Rs 996.42 crore, reflecting a YoY growth of 31.49 per cent compared to Rs 757.77 crore in December 2023. The operating profit stood at Rs 80.73 crore, marking a 0.47 per cent increase from Rs 80.35 crore in the same quarter last year. The profit after tax (PAT) increased by 29.30 per cent to Rs 77.93 crore from Rs 60.27 crore in December 2023.

In FY24, the company posted a revenue of Rs 3,160.75 crore, registering a 12.86 per cent growth compared to Rs 2,800.60 crore in FY23. The net profit for the year stood at Rs 239.19 crore, up 18.94 per cent from Rs 201.10 crore in the previous financial year.

As of December 2024, the shareholding pattern is as follows: Promoters hold 59.27 per cent, Foreign Institutional Investors (FIIs) hold 14.12 per cent, Domestic Institutional Investors (DIIs) hold 5.41 per cent, the public holds 19.83 per cent, and others hold 1.35 per cent. Compared to the previous quarter (September 2024), there is a notable decrease in promoter shareholding from 63.37 per cent to 59.27 per cent. FIIs have slightly increased their stake from 14.01 per cent to 14.12 per cent, while DIIs have increased their holding from 3.21 per cent to 5.41 per cent. Public shareholding has risen from 17.95 per cent to 19.83 per cent.

With a PE ratio of 48.3, the company trades at a premium compared to the industry PE of 30. The company has ROCE of 27.9 per cent and ROE of 33.54 per cent.

The company’s market capitalisation stands at Rs 13,831.70 crore, with the stock currently trading at Rs 1,874.

Disclaimer: The article is for informational purposes only and not investment advice.