- Gravita India, a leading player in the recycling industry, has delivered extraordinary returns to its investors, with shares surging by 252% in just two years.
- The stock has consistently yielded annual returns exceeding 50% over the past few years, making it a multibagger stock.
- With a robust clientele and a strong international footprint, Gravita India is poised for further growth, as it continues to expand its capacity and diversify its product mix.
Explore the remarkable rise of Gravita India, a multibagger stock that has delivered phenomenal returns, and understand the factors driving its growth.
Gravita India: A Multibagger Stock
Gravita India, a leading player in lead, aluminium, plastics, and rubber recycling, has seen its shares surge by an astonishing 252% in just two years, from ₹269 to ₹947.80. The stock has consistently delivered annual returns exceeding 50% over the past few years, making it a multibagger stock. In CY20, it yielded a return of 60%, followed by a remarkable 280% in the subsequent year. This trend persisted with a return of 53% in CY22, and a multibagger return of 144% in CY23.
Driving Factors Behind Gravita’s Success
Gravita’s success can be attributed to its robust clientele and strong international footprint. The company caters to both domestic and global markets, serving over 375 customers across 38 countries. In India, it serves more than 230 customers across 22 states. Furthermore, Gravita has been expanding its capacity. Its subsidiary, Gravita Tanzania, recently augmented the capacity of its existing battery recycling unit in Tanzania by 5,000 MTPA, boosting the total capacity of the Gravita Group to 290,859 MTPA.
Brokerage View and Future Prospects
Domestic brokerage firm ICICI Securities has initiated coverage on the stock with a target price of ₹1,150 apiece. It highlighted three major macro catalysts for Gravita in the near to medium term, including the promising prospects within the domestic market, the ongoing shift from the informal to the formal sector, and the potential benefits of formal trading of ADC-12 alloy on MCX. Over the upcoming two years, the brokerage anticipates Gravita to embark on a significant capital expenditure phase, augmenting capacities across various regions and product lines.
Financial Performance
Gravita has demonstrated remarkable financial performance compared to its industry counterparts. Over the past four years, it has achieved a revenue growth of approximately 22.5% compounded annually (CAGR), while its EBITDA surged at a rate of 35.4% CAGR. Its profit after tax (PAT) experienced an impressive growth of 80.1% CAGR during the same period.
Conclusion
Gravita India’s extraordinary performance makes it a multibagger stock worth watching. With a strong international presence, robust clientele, and plans for capacity expansion and product diversification, the company is poised for further growth. However, as always, investors are advised to conduct their own research and consult with certified experts before making any investment decisions.
