Small cap multibagger stock in focus: Stock market investing is often seen as a journey of patience and strategy. Those who can spot potential in companies early on and hold onto their investments tend to be rewarded the most. Unlike the quick profits from short-term trading, long-term investors understand the value of sticking with companies that demonstrate strong fundamentals, growth prospects, and industry leadership.
In this context, Gravita India is a stock that has rewarded its long-term shareholders with phenomenal returns by maintaining a steady upward trajectory year after year. The company is one of the largest lead recyclers in India in the organized lead recycling market.
Despite a sharp pullback in recent months amid market volatility and profit booking, Gravita India’ stock is still trading with a massive 560% gain over the last three years and a phenomenal 4000% gain over the past five years, making it one of the biggest wealth creators in the Indian stock market.
Looking at the long-term horizon, the stock, from its 2013 low of ₹21, has gained 900% to trade at the current price of ₹1859 apiece. The stock has delivered positive returns every year since 2020, with CY21 emerging as the best year, during which it rallied 280%.
Meanwhile, the company has successfully raised ₹1,000 crore via a Qualified Institutional Placement (QIP), earmarked for growth capex, working capital, and debt reduction.
Well-Positioned
The company is expected to be a beneficiary of the government’s latest regulation on battery waste management, as the same would result in strong double-digit volume growth for its India-led sales volume. Moreover, the company is implementing sizable capacity expansion plans for existing recycling verticals in India as well as in the overseas business.
Focusing on diversifying into the new recycling vertical, i.e., rubber, steel, paper, e-waste, and lithium, is expected to stream new business avenues and would support achieving management’s 2029 target of 25%+/35%+ revenue/PAT CAGR along with 25% RoCE.
Sharekhan expects the stock to reach ₹2,280
Domestic brokerage firm, Sharekhan has recently reinitiated coverage on Gravita India with a positive view, projecting a 26% upside from the current market price as the brokerage sets ₹2280 as the target price.
The brokerage said the company offers a compelling play on regulatory tailwinds, capacity expansion, and strategic forays into new recycling verticals. With a strong track record and expected revenue/PAT CAGR of 27%/30% over FY25–FY27E, it believes Gravita is well-positioned to sustain growth.
Government emphasis on circular economy initiatives and the company’s goal to increase the share of non-lead and value-added products to 30%+/50%+ respectively could act as key re-rating catalysts.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
