Gravita delivered a resilient Q3 FY26 performance characterized by strong margin expansion and profit growth despite flat revenue and volume headwinds in the aluminum segment. The company is navigating short-term regulatory delays in Gujarat for its capacity expansion but remains committed to its ambitious Vision 2029 targets. Profitability was bolstered by favorable arbitrage opportunities and high lead margins, while new verticals like rubber and lithium-ion are beginning to contribute or nearing operational status.
vs Q4 FY26
Notable Quotes from the Call
Most Confident Moment
Management reiterated the Vision 2029 targets of 25% volume CAGR and 35% profit growth despite current quarter volume stagnation.
Least Confident Moment
Acknowledging the delay in government approvals for the Mundra and Phagi plants as a reason for missing expansion timelines.
| Metric | Value | YoY |
|---|---|---|
| Revenue | ₹1.0K Cr | 0% YoY |
| Adjusted EBITDA | ₹116 Cr | +13.0% YoY |
| EBITDA Margin | 11.41% | — |
| PAT | ₹97.67 Cr | +32.0% YoY |
Segment Breakdown
Share of Sales Volume
| Metric | Latest | Trend |
|---|---|---|
| Revenue(crores) | 1017 | |
| Adjusted EBITDA(crores) | 116 | |
| PAT(crores) | 97.67 | |
| EBITDA Margin | 11.41% |
| Category | Target | Priority |
|---|---|---|
| Capacity | Total Installed Capacity→7,00,000 | High |
| Volume | Volume CAGR→25% | High |
| Profitability | Profitability Growth→35% | High |
| Capex | Total Capex Plan→₹1,225 crores | High |
| Revenue | Non-lead segment contribution→30% | Medium |
| Margin | Lead EBITDA per kg→₹19-20 | Medium |
| Severity | Risk |
|---|---|
medium | Regulatory Approval Delays Consent to Operate (CTO) for Mundra and Phagi plants delayed due to government officials' involvement in the 'Vibrant Gujarat' event. Management |
medium | Scrap Availability in Aluminum High metal prices lead scrap aggregators to withhold inventory, tightening supply and reducing processing volumes. Both |
medium | Hedging Difficulties in Aluminum Aluminum alloy (ADC-12) is not traded on exchanges, making it difficult to hedge compared to lead, leading to lower volume targets for now. Management |
Areas of Evasion(1)
Gravita reported flat revenue of ₹1,017 crores for Q3 FY26, primarily due to a sharp decline in aluminum volumes. While lead volumes remained steady at 46,269 tonnes, aluminum volumes were hit by scrap aggregators withholding material in anticipation of higher prices. However, the plastic segment showed a strong recovery, with volumes jumping 55% QoQ to 3,160 tonnes, reflecting improved demand for recycled PP granules from OEMs like Asian Paints.
Despite stagnant top-line growth, PAT surged 32% YoY to ₹97.67 crores. This was supported by superior EBITDA per tonne in the lead segment (₹23,000), which benefited from arbitrage opportunities where material was moved from African plants to India for higher realization. Management expects lead margins to eventually normalize to the ₹19,000-20,000 range but remains confident in sustaining double-digit EBITDA margins overall.
The company faced delays in commissioning 125,000 tonnes of lead capacity expansion at Mundra and Jaipur/Phagi. Management attributed this to a 'one-off📎' delay in obtaining Consent to Operate (CTO) from Gujarat state authorities. They expect these licenses to be granted by February 2026, allowing for a significant volume ramp-up starting in Q1 FY27. Total capacity is still on track to reach 7 lakh MTPA by FY 2028.
Gravita is aggressively diversifying beyond lead recycling. The lithium-ion battery recycling plant is expected to receive its operating consent in Q4 FY26. Additionally, the rubber recycling facility in Romania has commenced operations, contributing ₹3.5 crores in its first quarter. The company has earmarked ₹1,225 crores in Capex through FY 2028 to support entry into steel, paper, and lithium-ion verticals, aiming for a 30% revenue contribution from non-lead segments.
Management reaffirmed its 'Vision 2029' roadmap, targeting a volume CAGR of over 25% and profitability growth above 35%. They emphasized a disciplined capital allocation strategy with a minimum ROIC hurdle of 25% for all new ventures. To fund this growth, the company plans to utilize internal accruals and liquidity from a previous QIP, while keeping debt levels within limited boundaries.