Gravita India Limited: Navigating Growth and Sustainability in Q2 FY26

Gravita India Limited, a prominent player in the recycling sector, has reported a steady and robust performance for the second quarter and half-year ended September 30, 2025 (Q2 & H1 FY26). The company's financial results underscore its consistent strength across operational and financial parameters within all major business verticals. With a net debt-free balance sheet, Gravita is well-positioned for continued growth and long-term value creation, aligning with its ambitious Vision 2029 roadmap.

For H1 FY26, Gravita reported a consolidated revenue of INR2,75.44 crores, marking a commendable 13% year-on-year growth. Profit After Tax (PAT) saw a significant increase of 36% year-on-year, reaching INR189.25 crores, with a healthy PAT margin of 9.12%. The Adjusted EBITDA for the half-year rose to INR223.51 crores, reflecting a 16% year-on-year growth, and maintaining a strong EBITDA margin of 10.77%. The company's focus on value-added products continues to pay off, contributing 47% to the revenue, reaffirming progress towards its 50% target by 2029.

For the quarter, Q2 FY26, Gravita's consolidated revenue stood at INR1,035.50 crores, registering a 12% year-on-year growth. Adjusted EBITDA increased by 10% year-on-year to INR111.81 crores, with margins stable at 10.80%. PAT for the quarter was INR95.9 crores, up 33% year-on-year, maintaining a PAT margin of 9.27%. The company's integrated model and efficiency gains, coupled with a healthy Return on Invested Capital (ROIC) of 25%, highlight its operational excellence.

Strategic Expansion and Diversification

Gravita is aggressively pursuing its Vision 2029, which includes scaling core businesses and expanding into emerging sectors. The company's installed capacity has risen to 3.40 lakh metric tons per annum (MTPA) and is targeted to exceed 7 lakh MTPA by FY28. This expansion is supported by a realigned capex budget of approximately INR1,225 crores by FY28, with INR850 crores dedicated to strengthening existing verticals and the remainder for diversification into lithium-ion, paper, and steel recycling.

Key projects include the commissioning of a pilot lithium and battery recycling unit at Mundra in Q3 FY26. Lead capacity expansion at Mundra is progressing, with Phase 1 (30,000 MTPA) expected by November 2025 and Phase 2 (50,000 MTPA) by January 2026. Additionally, the Phagi lead recycling capacity is being enhanced by 45,000 MTPA, slated for completion by December 2026. These brownfield projects allow for immediate production ramp-up, leveraging existing infrastructure.

Market Dynamics and Risk Management

The Indian recycling market is undergoing a significant paradigm shift, driven by government initiatives like the Battery Waste Management Rules (BWMR), Extended Producer Responsibility (EPR) framework, and stricter GST implementation. These regulations are formalizing the sector, increasing accountability, and streamlining waste collection channels, which in turn boosts domestic scrap availability for organized players like Gravita. The company's pan-India presence and strong association with OEMs position it to significantly benefit from this shift.

Gravita employs a robust back-to-back hedging mechanism to mitigate commodity price fluctuations, selling metal equivalent of scrap bought on the same day. This strategy, coupled with forward contracts on the LME Exchange, ensures stable margins. While the approval for aluminium hedging on MCX is still pending, the company is actively pursuing it to further strengthen its risk management framework. The company's global operations and integrated supply chain, with deep-routed procurement networks and diversified customer base across 34+ countries, also contribute to its resilience.

Commitment to Sustainability and Governance

Gravita's approach places ESG at the center of its operations, promoting responsible practices and innovation-led efficiency. The company is committed to achieving over 25% volume CAGR, 35%+ profitability growth, and 25%+ ROIC, while also targeting to increase non-lead segment share to 30% of total revenue, meet 30% of energy needs through renewables, and reduce energy intensity by over 10%. The company's ESG roadmap includes short-term targets for FY27, mid-term targets for FY34, and long-term targets for FY50, aiming for Net Zero emissions and Water Neutrality for the Gravita Group by 2040.

Gravita's robust management, with an average of 29 years of experience, and a strong focus on human capital, further reinforces its operational capabilities. The company's governance framework includes 50% independent directors, an ESG committee, and transparent disclosures, ensuring ethical conduct and accountability. Gravita's consistent execution under favorable government policies and strategic diversification positions it well to drive long-term value creation for all stakeholders.