Detailed Narrative
Strong Financial Performance in FY26
Gravita India delivered a robust financial performance in FY26, with revenue growing 10% year-on-year to ₹4,265 crores. Adjusted consolidated EBITDA increased by 12% to ₹452.48 crores, maintaining healthy margins of 10.6%. Consolidated PAT saw a significant 21% year-on-year growth, reaching ₹378.80 crores, with PAT margins at 8.88%. This performance reflects consistent operational efficiency and strategic growth initiatives despite macroeconomic uncertainties.
Strategic Expansion and Diversification
The company is actively pursuing its expansion program, with total installed capacity now at 4.57 lakh metric tons per annum, targeting 8 lakh MTPA by FY29. A key strategic move was the acquisition of a 99.44% stake in Rashtriya Metal Industries Limited (RML) for ₹560 crores, marking Gravita's entry into the copper segment. Additionally, a 6,000 MTPA pilot lithium-ion battery recycling facility was commissioned at Mundra with an investment of ₹14 crores, strengthening its presence in emerging EV battery recycling.
Copper Segment Outlook and Integration
The acquisition of RML, with its 31,200 MTPA capacity and 40% revenue from exports, is expected to enhance Gravita's non-lead portfolio. Management anticipates increasing RML's capacity utilization from 50% to 60-65% next year and doubling its capacity to 60,000 tons in the next 2-3 years. A new copper recycling facility in Mandvi, with an initial capacity of 29,400 MTPA and a capex of ₹160 crores, is planned to commence operations within 12 months, aiming to boost EBITDA per ton from ₹45,000 to ₹65,000-70,000 through backward integration.
CAPEX Plans and Funding
Gravita has earmarked a total CAPEX of ₹1,700 crores through FY29, with ₹372 crores incurred in FY26. Approximately ₹700 crores of this is allocated to the copper segment over the next three years. The CAPEX is strategically divided, with ₹815 crores for existing businesses and the remainder for new recycling verticals like lithium-ion, copper, and steel. All planned CAPEX is intended to be funded through internal accruals, demonstrating financial prudence.
Operational Performance and Segmental Insights
Total volume increased by 5% to 56,208 MTPA in FY26, with the lead segment growing 7% to 48,889 MTPA. While the aluminum segment saw a decline due to the inability to hedge, management expects volumes to pick up once the MCX hedging mechanism is live. Sustainable EBITDA per ton guidance remains ₹14-15/kg for aluminum, ₹10-12/kg for plastic, ₹19-20/kg for lead, and ₹7-8/kg for rubber. The company is also awaiting government approvals for the commissioning of 45,000 tons of lead capacity in Jaipur in Q1.
EPR Regulations and Market Formalization
The industry is undergoing significant supply chain formalization due to tightening government regulations and the transition from informal to formal sectors. The government's establishment of an exchange for EPR transactions is increasing transparency and preventing sales below earmarked rates. Additionally, a new audit mechanism by the Central Pollution Control Board will scrutinize fake credits, further formalizing the sector. However, the 18% GST on lead continues to pose a hurdle for organized players against the unorganized market.