Gravita India Gets Fresh 'Buy' From Kotak, Shares Hit Two-Month High
The brokerage's fair value of Rs 1,200 implies a potential upside of 29.75% from Tuesday's closing price.
Shares of Gravita India Ltd. hit a two-month high on Wednesday as industry tailwinds and inferior competition drove Kotak Institutional Equities to initiate coverage on the stock with a 'buy' rating.
The brokerage's fair value of Rs 1,200 implies a potential upside of 29.75% from Tuesday's closing price.
The company is a market leader in India's emerging recycling industry, where the key business segment, lead recycling, enjoys significant tailwinds, according to the brokerage.
Kotak also likes Gravita's expansion plans in other segments, which give strong visibility on growth and diversification. "Peers such as POCL Enterprises, NILE Ltd. and Pilot Corp. in lead recycling lack geographic diversification, have lower operating margin and offer lower growth visibility."
On the NSE, Gravita's stock rose as much as 13.08% during the day to Rs 1,045.85 apiece, the highest since Jan. 17. It was trading 8.9% higher at Rs 1,005.90 per share, compared to a 0.7% advance in the benchmark NSE Nifty 50 as of 1:09 p.m.
The share price has risen 107.37% on a year-to-date basis. The total traded volume so far in the day stood at 7.47 times its 30-day average. The relative strength index was at 65.79.
Three analysts tracking the company have a 'buy' rating for the stock, according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 36%.