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ICICI Securities Report
Despite surging two times in the last three months, we see further steam in Gravita India Ltd. stock on the back of:
Regulatory tailwinds aiding availability of scrap in domestic market;
planned expansion in Europe; and
increased use of recycled material across products and geographies.
In our view, the positive impact of regulatory tailwinds and benefits from planned capacity expansion as per 2028 plan is likely to be visible in earnings in medium term. Hence, we shift our valuation methodology to DCF (earlier P/E) in order to adequately capture the growth path.
Our revised target price works out to Rs 3,265 (earlier Rs 1,750 on 30 times P/E), implying 28% upside on current market price. We retain Buy rating on Gravita India stock.
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