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    Gravita India

    GRAVITAGood
    Metals & Mining·23 Jan 2026
    Management Summary

    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.

    Highlights

    8

    • Revenue remained flat YoY and QoQ at ₹1,017 crores for Q3 FY26.

    • Adjusted EBITDA stood at ₹116 crores, up 13% YoY and 4% QoQ.

    • PAT increased significantly by 32% YoY to ₹97.67 crores with healthy margins of 9.60%.

    • Lead segment EBITDA per metric tonne reached ₹23,000, exceeding long-term guidance of ₹19,000-20,000.

    • Plastic segment saw a strong volume rebound, rising 55% QoQ to 3,160 metric tonnes.

    • Aluminum volumes declined sharply (50% decline mentioned in Q&A) due to scrap withholding by aggregators amid high metal prices.

    • Installed capacity currently stands at 3.40 lakh MTPA, with a target to exceed 7 lakh MTPA by FY 2028.

    • Vision 2029 targets confirmed: Volume CAGR >25%, Profitability growth >35%, and ROIC >25%.

    Key financials

    Single quarter

    04 metrics
    1. 01Revenue₹1,017 Cr0%YoY
    2. 02Adjusted EBITDA₹116 Cr+13%YoY
    3. 03EBITDA Margin11.4%
    4. 04PAT₹97.67 Cr+32%YoY

    Segment breakdown

    • Lead46,269 tonnes87.4%
    • Aluminum3,500 tonnes6.6%
    • Plastic3,160 tonnes6.0%
    Donut· Share of Sales Volume

    Guidance & targets

    6
    CategoryTargetPriority
    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

    Risks & concerns

    4
    RiskSeverity

    Regulatory Approval Delays

    Consent to Operate (CTO) for Mundra and Phagi plants delayed due to government officials' involvement in the 'Vibrant Gujarat' event. — Management downplayed

    medium

    Scrap Availability in Aluminum

    High metal prices lead scrap aggregators to withhold inventory, tightening supply and reducing processing volumes. — Both acknowledged

    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 acknowledged

    medium

    Areas of Evasion(1)

    • The contradictory Capex figures in the prepared remarks (₹1,255 cr vs ₹125 cr) were not explicitly corrected until questioned in Q&A.

    Q&A highlights

    3

    “Because of various reasons in Gujarat, because of this vibrant Gujarat into place, some of the government officials are not regularly attending the offices right now... we are expecting both the Phagi as well as Mundra plant to get the license to operate [this quarter].”

    Explains the short-term volume stagnation as a regulatory 'formality' delay rather than a structural issue.

    asked by Amit Lahoti, Emkay Global

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Resilience Amidst Volume Headwinds

    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.

    02

    Margin Expansion Driven by Arbitrage and Efficiency

    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.

    03

    Capacity Expansion and Regulatory Bottlenecks

    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.

    04

    Strategic Pivot to New Recycling Verticals

    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.

    05

    Vision 2029 and Long-term Financial Targets

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.