Gravita India Limited — Q3 FY26 earnings call

Call held 23 Jan 2026

Management summary

Gravita India delivered a consistent performance in Q3 and 9M FY26, marked by strong YoY growth in revenue, EBITDA, and PAT. The company is actively pursuing significant capacity expansions in lead, plastic, and new recycling verticals, despite some temporary delays in government approvals and challenges in aluminum scrap procurement. Management remains confident in achieving its long-term growth and profitability targets, supported by strategic investments and operational efficiencies.

Highlights

  • 9M FY26 Revenue grew 9% YoY, EBITDA grew 15% YoY, and PAT grew 32% YoY, reflecting consistent performance.

  • Q3 FY26 Adjusted EBITDA increased 13% YoY to ₹116 crores, with PAT up 32% YoY to ₹97.67 crores.

  • Installed capacity reached 3.40 lakh metric tonnes per annum, with a target to scale to over 7 lakh MTPA by FY28.

  • Lead segment margins remained strong at ₹23,000 per metric tonne, supported by arbitrage opportunities from African plants.

  • Gravita Netherlands BV increased its stake in Gravita Europe S.R.L from 80% to 95%, strengthening European presence.

Concerns

  • Delays in capacity expansion plans for Jaipur and Mundra lead plants due to government approval processes in Gujarat.

  • Aluminum volumes declined in Q3 due to scrap aggregators withholding material in anticipation of higher prices.

  • Anticipated annual financial impact of approximately ₹4.2 crores from FY27 due to new labor law (gratuity and leave encashment recalculation).

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹1,017 Cr
    YoY 0% QoQ 0%
  • Adjusted EBITDA
    ₹116 Cr
    YoY +13% QoQ +4%
  • PAT
    ₹97.67 Cr
    YoY +32%
  • EBITDA Margin
    11.4%
  • PAT Margin
    9.6%

9M FY26

  • Revenue Growth
    —
    YoY +9%
  • EBITDA Growth
    —
    YoY +15%
  • PAT Growth
    —
    YoY +32%

What they filed

Q1 FY27: revenue up 41.8%, net profit up 14.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue927 996 1,037 1,040 1,036 +12%1,017 +2%1,173 +13%1,475 +42%
EBITDA63 81 92 101 102 +62%120 +48%113 +23%110 +9%
Net profit72 78 95 93 96 +33%97 +24%92 −3%106 +14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Volume (Q3 FY26)
52,979 tonnes Total
  • Lead 46,269 tonnes 87.3%
  • Aluminum 3,550 tonnes 6.7%
  • Plastic 3,160 tonnes 6.0%

Capital allocation

high confidence
  • Capex ₹200 Cr fully funded from internal accruals and liquidity
    • Strengthening and expanding existing businesses ₹850 Cr
    • Entry into new recycling verticals (lithium-ion batteries, paper, steel) ₹375 Cr
    • Lead capacity expansion at Mundra (80,000 MTPA)
    • Lead capacity expansion at Jaipur (45,000 MTPA)
    • Mundra rubber project commissioning
    We have earmarked a total CAPEX of Rs. 1,225 crores through FY 2028. Of this, around Rs. 850 crores is being deployed towards strengthening and expanding our existing businesses, while the balance will support entry into new recycling verticals like lithium-ion batteries, paper and steel. During the first nine months of 2026, we have already incurred CAPEX of about Rs. 1,255 crores. At Mundra, lead capacity expansion of 80,000 metric tonnes per annum is targeted for completion by Q4 FY 2026. At Jaipur, lead capacity expansion up to 45,000 metric tonnes per annum is targeted for completion by Q4 FY 2026. The Mundra rubber project is slated for commissioning in Q1 FY 2027, with revenues expected to begin flowing from Q2 FY 2027. So, that remains the core of the business strategy that we have. But overall on the funding side we plan to spend approximately Rs. 1,200 crores in the next two years to three years for CAPEX and approximately Rs. 1,500 crores will be needed for working capital. So, we have something in liquidity which we generated through QIP in last year and remaining is to be funded from the internal accruals which we generate as cash flow in next two years to three years. And additionally, we may take some debt to a limited extent where we plan to raise some debt up to within some limits. So, we are fully competent of taking this growth, fully funded from internal accruals and liquidity we have. I could not hear your first question properly, but to answer your second question we have already done a CAPEX of around Rs. 125 crores till now. And we are expecting it to cross Rs. 200 crores by Q4.
  • Debt Debt disclosed
    And additionally, we may take some debt to a limited extent where we plan to raise some debt up to within some limits.
  • M&A Gravita Europe S.R.L Acquisition · Closed

    Strengthening presence in the European market

    Gravita Netherlands BV's shareholding increased from 80% to 95% by acquiring 3.5 lakh shares.

    Gravita Netherlands BV, our step-down subsidiary, has approved an additional investment in Gravita Europe S.R.L through the acquisition of 3.5 lakh shares, representing a 15% stake. Post this transaction, GNBV's shareholding in Gravita Europe S.R.L will increase from 80% to 95%, further strengthening our presence in the European market.
  • Liquidity Liquidity disclosed Liquidity generated through QIP in the last year, along with internal accruals, is expected to fund CAPEX and working capital requirements.
    So, we have something in liquidity which we generated through QIP in last year and remaining is to be funded from the internal accruals which we generate as cash flow in next two years to three years.

Guidance & targets

Capacity

  • Total installed capacity Capacity · by FY 2028 · High confidence Over 7 lakh metric tonnes per annum
    We expect to cover it up in the upcoming quarters to meet our medium-term target of scaling this up to over 7 lakh metric tonnes per annum by FY 2028, in line with our focus on building a larger and more diversified recycling platform.

    — Yogesh Malhotra

  • Lead capacity expansion at Mundra Capacity · by Q4 FY 2026 · High confidence 80,000 metric tonnes per annum
    At Mundra, lead capacity expansion of 80,000 metric tonnes per annum is targeted for completion by Q4 FY 2026.

    — Yogesh Malhotra

  • Lead capacity expansion at Jaipur Capacity · by Q4 FY 2026 · High confidence 45,000 metric tonnes per annum
    At Jaipur, lead capacity expansion up to 45,000 metric tonnes per annum is targeted for completion by Q4 FY 2026.

    — Yogesh Malhotra

Capex

  • Total CAPEX Capex · through FY 2028 · High confidence ₹1,225 crores
    We have earmarked a total CAPEX of Rs. 1,225 crores through FY 2028.

    — Yogesh Malhotra

New Project Commissioning

  • Mundra rubber project commissioning New Project Commissioning · Q1 FY 2027 · High confidence Commissioning
    The Mundra rubber project is slated for commissioning in Q1 FY 2027, with revenues expected to begin flowing from Q2 FY 2027, aided by stabilization of the Romania operations as well.

    — Yogesh Malhotra

Revenue Contribution

  • Non-lead segment contribution to revenue Revenue Contribution · Vision 2029 · High confidence 30%
    alongside increasing the non-lead segment's contribution to 30% of revenue

    — Yogesh Malhotra

Sustainability

  • Renewable energy usage Sustainability · Vision 2029 · High confidence 30%
    raising renewable energy usage to 30%

    — Yogesh Malhotra

  • Energy intensity reduction Sustainability · Vision 2029 · High confidence Over 10%
    and reducing energy intensity by over 10%.

    — Yogesh Malhotra

Profitability

  • Lead segment margin Profitability · Medium-term · High confidence ₹19-20 per kg
    Sir, I think the margin would remain at around Rs. 19 to Rs. 20, as we mentioned earlier that, we sacrifice some revenues to ensure that these margins are intact.

    — Yogesh Malhotra

  • Aluminum segment margin Profitability · Medium-term · High confidence ₹14-15 per kg
    But going forward, you can expect what we have already mentioned that around Rs. 19 to Rs. 20 in lead, around Rs. 14 to Rs, 15 in aluminum, and plastic would give you around Rs. 10 to Rs. 12.

    — Yogesh Malhotra

  • Plastic segment margin Profitability · Medium-term · High confidence ₹10-12 per kg

    — Yogesh Malhotra

Volume Growth

  • Overall volume CAGR Volume Growth · Long-term · High confidence 25%
    But overall, our target of 25% remains intact.

    — Yogesh Malhotra

Profitability Growth

  • EBITDA/PAT growth Profitability Growth · Next year and going forward · High confidence 30-35%
    But more than that, we talk about 30% to 35% growth in the bottom line numbers. That is the EBITDA numbers or the PAT numbers because, as I mentioned that sometimes although the volume that we have done is higher, but it does not reflect in the overall consolidated statement because some of the materials, we move from Africa into India. So, the top-line numbers may vary, but you can expect the same kind of bottom-line numbers of around 30% to 35% increase in EBITDA numbers in next year and then going forward also.

    — Yogesh Malhotra

Profitability Improvement

  • Per kg improvement across segments Profitability Improvement · by FY 2028 · High confidence ₹0.5-0.75 per kg
    So, by FY 2028, you can expect probably Rs. 0.5 to Rs. 0.75 per kg improvement in all the three segments.

    — Yogesh Malhotra

Regulatory Approval

  • MCX approval for aluminum trading Regulatory Approval · Q1 FY 2026-2027 · High confidence Approval
    And when it comes to MCX on aluminum, so this is also under consideration with MCX and I am hopeful in FY 2026 it should come by Q1 of FY 2026 - 2027.

    — Yogesh Malhotra

Capacity Ramp-up

  • Full ramp-up of 125 KT lead capacity Capacity Ramp-up · Q2 next financial year · High confidence Full ramp-up
    In H1 next year, we will be able to ramp up it. Some of the volumes will start coming from Q4 itself, but major incremental volume will start coming from Q1 and Q2 of next financial year. So, by Q2, will we be able to fully ramp up? Absolutely, sir.

    — Yogesh Malhotra

What to watch in Q4 FY26

Jaipur Lead Capacity Expansion Completion

Q4 FY26
Current Under construction/awaiting approval
Target Commissioned

Why it matters

Completion of 45,000 MTPA expansion is crucial for increasing lead processing capacity and achieving volume targets.

At Jaipur, lead capacity expansion up to 45,000 metric tonnes per annum is targeted for completion by Q4 FY 2026.

Risks & concerns

  • Delays in government approvals for capacity expansion

    medium

    Approvals for Phagi and Mundra plants delayed due to government officials' attendance issues in Gujarat, but expected to be resolved in Q4 FY26.

    Management acknowledged

  • Raw material withholding by scrap aggregators

    medium

    Scrap aggregators withhold material during price increases, impacting procurement and volumes, particularly for aluminum in Q3 FY26.

    Management acknowledged

  • Commodity price volatility for non-hedged segments

    medium

    Global geopolitical issues cause volatility, impacting segments like aluminum where hedging is difficult due to non-exchange traded products (ADC-12).

    Analyst acknowledged

  • Financial impact of new labor law

    low

    Estimated annual impact of ₹4.2 crores from FY27 due to recalculation of gratuity and leave encashment.

    Management acknowledged

Q&A highlights

8 direct
Delays in capacity expansion approvals Direct
So, what were the bottlenecks in the last two months to three months which led to this delay? ... Because of this vibrant Gujarat theme, they are not regularly attending the office. So, that is why the delay is there. But we are very confident that it will happen now in this quarter itself.

Clarifies the reason for capacity expansion delays and provides a timeline for resolution, impacting near-term volume growth.

Asked by Amit Lahoti

Discrepancy between margin guidance and reported margins Direct
Sir, I think the margin would remain at around Rs. 19 to Rs. 20, as we mentioned earlier that, we sacrifice some revenues to ensure that these margins are intact. So, that is why because there are arbitrage opportunities so we shift some material from our African plants into India taking advantage of those benefits.

Explains management's strategy to maintain margins through arbitrage and clarifies the long-term margin expectation.

Asked by Amit Lahoti

Domestic versus overseas raw material mix Direct
So, overall in the quarter, how much was the... So, quarter it was 25% from domestic and 75% was imported. But overall, we should be back to the normal one which is around 45% from domestic and 55% from the imported one. So, once we have the capacity live.

Provides insight into raw material sourcing strategy and how it shifts based on arbitrage and capacity availability.

Asked by Amit Lahoti

Progress on EPR/BWMR and MCX trading for aluminum Direct
So, on the part of EPR and battery waste management rules, this has already been reviewed and yesterday NITI Aayog has recommended a few recommendations strengthening the EPR process... So, we are hopeful that by April 1st, 2026 these rules will be amended... And when it comes to MCX on aluminum, so this is also under consideration with MCX and I am hopeful in FY 2026 it should come by Q1 of FY 2026 - 2027.

Highlights regulatory tailwinds and potential for MCX trading to improve aluminum segment stability and growth.

Asked by Amit Dixit

Discrepancy in 9M CAPEX figures and FY26 CAPEX target Direct
I could not hear your first question properly, but to answer your second question we have already done a CAPEX of around Rs. 125 crores till now. And we are expecting it to cross Rs. 200 crores by Q4. So, we will meet the target that we set for FY 2026 for capacity expansion.

Clarifies the actual CAPEX incurred for 9M FY26 and reaffirms the FY26 CAPEX target, addressing a potential misinterpretation from prepared remarks.

Asked by Kunal Devendra Kothari

Decline in aluminum volumes and future growth Direct
Sir, we mentioned earlier that there has been some increase in aluminum prices and when such things happen, then the scrap dealers tend to withhold the scrap and do not sell it to the recyclers. And this causes packing of scrap availability and that has led to lower volumes in the quarter. But going forward, we are expecting the normalcy to continue and we will start getting more aluminum scrap going forward.

Explains the reason for the aluminum volume decline and management's expectation for recovery.

Asked by Sumant Kumar

Hedging strategy for commodity price volatility and plans for copper Direct
Yes. So, to answer your first question, as far as lead is concerned, we are totally hedged... Aluminum, we are looking at some options to hedge. But currently, because we do ADC-12, which is not traded on any of the exchanges, so we find it a little difficult to hedge and that is why we have kept our volumes low in aluminum. We are not doing any aluminum recycling in India currently... And we are looking seriously on all recycling verticals including solar panels, paper, steel and specifically copper also...

Details the company's hedging approach for different metals and signals strategic interest in copper as a new recycling vertical.

Asked by Netra Deshpande

Impact of new labor law on financials Direct
Sir, currently we do not see any impact, but definitely the impact would come from the recalculation of gratuity and leave encashment for the labor. And we are expecting overall, in future going forward, we expect an overall impact of around Rs. 4.2 crores going downwards. Sorry, this year, not in the next year.

Quantifies a new, recurring operational cost expected from the next financial year.

Asked by Sumant Kumar

3 min read 7 chapters

Detailed narrative

Q3 & 9M FY26 Performance Overview

Gravita India delivered a consistent performance in Q3 and 9M FY26. For the nine months, revenue grew 9% YoY, EBITDA increased 15% YoY, and PAT saw a significant rise of 32% YoY. In Q3 FY26, revenue remained flat YoY at ₹1,017 crores. Adjusted EBITDA for the quarter stood at ₹116 crores, up 13% YoY and 4% QoQ, while PAT increased 32% YoY to ₹97.67 crores, with healthy margins of 11.41% (EBITDA) and 9.60% (PAT).

Capacity Expansion and Project Delays

The company's installed capacity has reached 3.40 lakh metric tonnes per annum, with an ambitious target to scale to over 7 lakh MTPA by FY28. Key lead capacity expansions of 80,000 MTPA at Mundra and 45,000 MTPA at Jaipur are targeted for completion by Q4 FY26. However, these projects have experienced some delays due to government approval processes in Gujarat, which management expects to resolve in Q4 FY26. The Mundra rubber project is slated for commissioning in Q1 FY27, with revenues expected from Q2 FY27.

Capital Expenditure and Funding Strategy

Gravita has earmarked a total CAPEX of ₹1,225 crores through FY28, with ₹850 crores dedicated to strengthening existing businesses and the remainder for new recycling verticals like lithium-ion, paper, and steel. For the first nine months of FY26, the company incurred ₹125 crores in CAPEX and anticipates crossing ₹200 crores by Q4 FY26. The overall CAPEX plan of approximately ₹1,200 crores over the next 2-3 years, along with ₹1,500 crores for working capital, is expected to be fully funded by internal accruals and existing liquidity from a prior QIP.

Segmental Performance and Raw Material Dynamics

In Q3 FY26, lead volumes showed steady growth, and plastic volumes rebounded significantly by 55% QoQ to 3,160 metric tonnes. However, aluminum volumes declined due to scrap aggregators withholding material in anticipation of higher prices, leading to lower procurement. EBITDA per metric tonne for lead, aluminum, and plastic stood at ₹23,000, ₹14,215, and ₹10,462 respectively. The domestic vs. imported raw material mix for Q3 was 25% domestic and 75% imported, a temporary shift due to arbitrage opportunities and stocking for expansion.

Strategic Growth and Regulatory Environment

The company is pursuing Vision 2029 targets, including a volume CAGR of over 25%, profitability growth above 35%, and ROIC exceeding 25%. It aims for the non-lead segment to contribute 30% of revenue and to increase renewable energy usage to 30%. The regulatory environment, with stronger enforcement of BWMR and EPR frameworks, is enhancing accountability and improving domestic scrap availability. Progress on MCX trading for aluminum is also under consideration, with expectations for Q1 FY27.

Hedging and Diversification into New Verticals

Gravita employs a 100% hedging strategy for its lead segment to mitigate price volatility. For aluminum, hedging is challenging as ADC-12 is not traded on exchanges, which influences lower volumes in this segment. The company is actively exploring diversification into new recycling verticals, including copper, solar panels, paper, and steel, with the Mundra rubber project being a key step in this direction. The increased stake in Gravita Europe S.R.L (from 80% to 95%) also strengthens its European market presence.

Impact of New Labor Law

The company anticipates a new financial impact from the recalculation of gratuity and leave encashment under the new labor law. This is expected to result in an additional annual cost of approximately ₹4.2 crores, which will be reflected in the financials from FY27 onwards. Management has acknowledged this upcoming cost and is factoring it into future projections.

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