Gravita India has emerged as one of the largest listed recycling companies in India, with its core business focused on recycling lead-acid batteries into refined lead for use by battery manufacturers.
The company has delivered strong long-term shareholder returns, with the stock rising more than 6,100% over the past decade. However, the shares remain about 30% below their all-time high levels as of January 2026.
Investors are now assessing whether the company's expansion plans, diversification efforts and exposure to recycling demand can support the next phase of growth.
Diversification Strategy
Lead recycling remains Gravita's largest business segment.
The company has increased its market share from 70% to more than 81% over the past five years, supported by its collection network and processing capabilities.
At the same time, management is working to reduce dependence on a single commodity.
The company has expanded into aluminium, plastics and rubber recycling and expects non-lead businesses to contribute 30% of revenue by 2029.
A key area of focus is lithium-ion battery recycling.
Gravita is developing a pilot facility in Mundra, Gujarat, as it seeks to position itself for future demand linked to electric vehicles and battery disposal.
Financial Performance
The company's recent earnings have reflected continued growth.
For the quarter ended September 2025, Gravita reported net profit of Rs 96 crore, up 33% from a year earlier.
Revenue increased 11.7%, while operating margin improved to 10.77%.
Between FY22 and FY25, net income grew at a compound annual growth rate of more than 30%, compared with revenue growth of 20.4%.
The gap between earnings growth and revenue growth indicates improving operating efficiency during the period.
Expansion Plans
Capacity expansion remains central to Gravita's growth strategy.
The company aims to increase total recycling capacity to 700,000 tonnes annually by 2028, more than doubling current capacity.
During a recent earnings call, Chief Executive Officer Yogesh Malhotra said expansion projects at the Mundra and Phagi facilities were nearing completion.
The company is largely pursuing brownfield expansions, allowing it to add capacity through existing facilities rather than building entirely new plants.
Kotak Securities expects the expansion programme to support volume growth of 33% by 2027.
Regulatory Support
Industry regulation has also become an important growth driver.
The Battery Waste Management Rules and the Extended Producer Responsibility framework require manufacturers to ensure a portion of battery waste is recycled through authorised channels.
These regulations have increased the flow of recyclable material to organised operators.
Management estimates that organised recyclers currently account for about 35% of scrap collection, a figure that could rise significantly over the coming years.
If that shift continues, established recycling companies could benefit from a larger supply base and increased processing volumes.
Valuation Watch
Investors continue to balance growth opportunities against valuation.
Gravita trades at more than 30 times earnings, above its 10-year average valuation of 19 times.
The premium reflects expectations that capacity additions, diversification and regulatory support will translate into sustained earnings growth.
Analyst estimates suggest earnings per share could grow at an annual rate of about 18% over the next five years.
However, commodity-price movements remain a key risk because the company's revenue is linked to lead and aluminium prices.
Execution risks around capacity expansion and newer business segments will also remain areas of focus.
Investment View
Gravita has built a business around recycling demand at a time when environmental regulations and resource efficiency are becoming increasingly important across industries.
The company combines a leading position in lead recycling with plans to expand into aluminium, plastics, rubber and lithium-ion battery recycling.
Its long-term growth outlook will depend on successful capacity expansion, diversification beyond lead and the pace at which the organised recycling industry gains market share.
While the stock trades at a premium to its historical valuation, investors will be watching whether earnings growth keeps pace with expectations over the coming years.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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