Gravita India Poised for 35% Surge: CLSA Initiates Outperform With ₹1,980 Target
Shares of leading non-ferrous metal recycling specialist Gravita India jumped nearly 3 percent to trade around ₹1,511.30 on Monday, October 12, 2026, after global investment banking firm CLSA initiated coverage on the counter with an 'Outperform' rating and a 12-month target price of ₹1,980. The bullish projection implies a potential upside of approximately 35 percent from last Friday's closing levels, positioning the stock just above its previous 52-week peak of ₹1,913.60. While the equity has retreated roughly 20 percent from its record highs and remains down 19 percent on a year-to-date basis, market sentiment has turned decisively positive, supported by unanimous institutional backing where all 11 analysts tracking the company maintain active 'Buy' recommendations with an average street upside projection of 33 percent. CLSA notes that India's expanding industrial footprint is driving structural reliance on secondary metal recycling to bridge acute primary supply deficits, granting organized recyclers like Gravita an expanding operational advantage.
Copper Vertical to Power 41% Revenue CAGR and Transform Earnings Mix by FY30
The centerpiece of CLSA’s growth thesis is Gravita India's strategic expansion into secondary copper processing, a vertical positioned to unlock the company’s next multi-year earnings upcycle. While copper currently represents a negligible portion of the firm's consolidated balance sheet, CLSA projects that by fiscal year 2030, the copper segment will account for a transformative 44 percent of total group revenue and generate 41 percent of consolidated EBITDA. Underpinned by this high-margin capacity ramp-up, the brokerage estimates that Gravita's topline will compound at an annual rate of 41 percent between FY2026 and FY2030, alongside an estimated compound annual growth rate (CAGR) of 36 percent in operating EBITDA and 32 percent in profit after tax (PAT). Furthermore, as high-value copper refining reaches critical mass, the company’s return on capital employed and broader balance-sheet return ratios are forecasted to experience substantial expansion after fiscal year 2028.
Robust Scrap Logistics Moat and Institutional Consensus Counter Balance-Sheet Risks
Gravita's operational competitive advantage stems from an extensive pan-India and overseas scrap procurement network that secures feedstock across diverse channels, minimizing raw material friction and slashing logistics expenditures relative to regional competitors. These supply-chain efficiencies are reinforced by long-standing institutional partnerships with original equipment manufacturers (OEMs) and advanced in-house engineering capabilities that accelerate turnkey project commissioning. While CLSA highlighted key operating risks—including mounting working capital requirements as procurement scales, potential regulatory export bans on scrap metal in key overseas source markets, shifts in electric vehicle adoption, and prospective backward integration by primary OEMs—the brokerage underscored that the rapid transition from the unorganized to the organized scrap ecosystem provides an enduring structural buffer for the Jaipur-headquartered recycling major.
