ICICI Securities believes that Gravita India’s administration is firmly centered on development throughout each current and new verticals; on the identical time, it’s growing contribution of value-added merchandise and decreasing the reliance on lead. The brokerage believes that capex of Rs 15 billion over the subsequent three years, represents an enormous bounce over the previous years (previous eight years capex at Rs 5.3 billion) and is probably going to offer a stable pick-up to the earnings.
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ICICI Securities Report
Gravita India Ltd.’s efficiency was in keeping with our estimates.
Key factors:
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Ebitda (together with hedging good points) was up 22% YoY at Rs 1.06 billion.
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Ebitda margin (adjusted) was up 20 bps YoY (30 bps QoQ) at 10.3%.
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Lead gross sales quantity rose 12.3% YoY at 45.6kt.
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Capex of Rs 1.07 billion in FY25 in comparison with Rs 981 million in FY24.
Going forward, administration reiterated its deal with quantity development viz. a 25% CAGR, and RoIC of >25% by way of to FY29. Moreover, the capex by way of to FY28E is more likely to be Rs 15 billion, implying that Gravita is fast-tracking capability enlargement. We decrease our FY26E/FY27E EPS by 10%/4%, taking cognizance of lower-than-expected ramp-up of aluminium capability. Moreover, adjusting for the just lately concluded QIP, our revised goal worth works out to Rs 2,670 (earlier Rs 3,250). Keep Purchase.
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