Last two concalls, mgt have clarified that vol growth would be granular, not to expect 25% every year
They say value addition in Copper isn’t much and yet Jain recycling shows 50k per tonne+ EBITDA margins. What’re we missing?
2 Likes
Agree. I also remember them mentioning in Q2 concall that although the value of Copper is high revenue wise, the scope of doing much value addition is not there.
But now after your comments I went and checked the investor PPT of Jain Recycling and yes they reported EBITDA of 51000 per tonne while for Gravita even the peak Lead EBITDA is ₹23000 per tonne. Not sure why Gravita is not entering into Copper.
I do recall they mentioned some collection related issues also domestically wrt Copper.
Results are out. Muted revenue growth. Profit margins are improving and that looks like the only positive.
2 Likes
I believe businesses like Gravita, which are in the nature of converters, should not be evaluated from the context of revenue growth. Since impacted by a lot of factors external to the company.
Why not? We should track their volume growth, which would eventually increase their revenue.
The management guided for 25% volume growth and so far they haven’t been able to achieve that in any of the quarters for FY26. Last quarter, they mentioned that due to GST reforms, there was less scrap available and hence there wasn’t much volume growth. They mentioned H2 would be better. Volume growth is negative and has degrown by 1%.
They also guided for capex commencement from Q3Fy26, but it hasn’t happened. Their other income has gone down, so I am sure they are working on capex and are expanding.
Net net, the results are poor. Management is not “walking the talk”. They shouldn’t have guided for 25% volume growth if they couldn’t achieve it for Fy26.
Last quarter, also they mentioned that margin increase has contributed to somewhat slowdown on the volume front, essentially a trade-off. And this quarter, again we see some margin expansion, with EBITDA per ton from lead at Rs 23 vs. historical Rs 19.
Also management highlighted that they engage in arbitrage trades whereby they bring scrap from outside India, process and sell it in India. And hence the overall volume growth looks low because of consolidation impact. Ofcourse, will get more clarity in the earnings call, if it is continuing to be the case.
And your PAT has still grown like 32% yoy vs. 35% as guided on 9 month basis and growth is not going to be linear.
Additionally, revenue at times can be impacted by commodity prices so on a long run basis, can give a wrong picture in either direction.
Agreed that they are working on margin improvement and engaged in arbitrage trades. Then, why are they continuously giving 25% volume growth guidance? In such cases, they should inform the shareholders that their priority is margin improvement.
Additionally, margin improvement can only be done upto a limit. In long term, EPS growth is driven by the sales/volume growth. There is a delay in their capex commencement (which can happen with any company), and because of which they are unable to grow their volumes. Even their current utilisation is around 75% (which company is not optimising for better margin trade offs).
Long story short, they should work on margin improvement and volume growth parallely. Their competitor Pondy is doing it and has been rewarded handsomely by the market. So, has been jain resource recycling.
July Concall
Amit Lahoti: My first question is on capacity utilization from existing operations. So we have seen that volumes have been flat for 3 quarters in a row. So are we not sweating our assets hard enough to get more volumes as we are just at 65% utilization?
Yogesh Malhotra: Sir, if you look at the lead capacity – lead utilization, it’s around 75% of the total, which is kind of optimal currently – at optimal level currently. To increase capacity further, we will have to set up new capacities. And we are in line with increasing our capacities in India, specifically looking at additional raw material availability. So you will start getting some results from those capacities as we build it up from Q3 onwards.
Ankit Babel: Sir, a couple of questions. One was that this quarter, the volume growth was 12%, which is way below your 25% volume growth guidance. So, I mean, what kind of growth you are looking at for the full year, considering the first quarter performance in terms of volume growth?
Yogesh Malhotra: I think year-on-year, we are expecting a – I mean, so as I mentioned that the growth is not going to be linear. So the 25% growth rate that we are targeting is for a period of 3 years because capex, as I mentioned earlier, also will not take place every quarter. So it will take some time for us to set up new capacities.
October Concall
Phase 1 of Mundra capacity – lead capacity expansion of 30,000 metric tons per annum is expected to be commissioned by November 2025, while Phase 2 adding another 50,000 metric ton per annum is targeted for completion by Jan 2026.
Sunil Kansal: This INR23 when it comes, so definitely, it comes with the compromise on the volumes, so which slightly – when the Indian markets are better, so we sell overseas material to Indian markets, which presses us better prices sometimes. This is the arbitrage we got in this quarter compromises something on the volumes and better on the margins.
5 Likes
Gravita India Limited ventures into Lithium-Ion Battery Recycling at Mundra
Is proud to announce the launch of its state-of-the-art lithium-ion battery recycling plant
in Mundra, Gujarat with a capacity of 6,000 MTPA.
The company has made an investment of ~Rs. 14 Crores for procurement and commissioning of the said Recycling Plant which is invested from internal accruals of the company.
Gravita will ensure the safe, sustainable recycling of lithium-ion batteries, reducing
environmental impact, and conserving precious resources. Gravita India has invested in cutting-edge technology to improve the efficiency and scalability of the recycling process, ensuring that toxic chemicals and waste are minimized.
This venture is part of Gravita’s commitment to promoting a circular economy by reusing
valuable materials and reducing the dependency on mining for raw materials.
Gravita’s venture into lithium-ion battery recycling is aligned with its ambitious sustainability
goals and the global push for cleaner, more efficient energy solutions. As electric vehicles
continue to grow in popularity, the company aims to become a key player in the global battery
recycling market, supporting a greener, more sustainable planet for future generations.
The company plans to expand the scope of its recycling operations and collaborate with leading players in the EV and renewable energy sectors to further enhance its recycling capabilities.
3 Likes
Acquisition of Rashtriya Metal Industries Limited (RMIL) and an entry into copper recycling.
5 Likes
But RMIL is just a processor, I couldn’t find any data suggesting it is a recycler. A processor buys copper rods from the market and converts them into products, whereas a recycler procures scrap and converts it into products.
If RMIL is only a processor, I think the company may have overpaid for this acquisition.
RMIL is not just a processor. They’ve even undertaken steps in line with green manufacturing in India. You can read more about it in their blog - The Evolution of Brass Cups: From Ammunition to Industries
Gravita’s vast sourcing network will help with procuring additional scrap to feed RMIL’s 31,200 MTPA capacity. RMIL reported FY25 turnover of ₹910 crore (up from ₹688 crore in FY24 and ₹598 crore in FY23), EBITDA of ₹60 crore, net worth of ₹300 crore, and total assets of ₹558 crore. FY26 revenue driven by order book is projected at ₹1,100 crore.
It is for sure a processor. Kindly read it carefully, all this says is company collects the scrap generated during manufacturing process, every company does it. No where it is mentioned that company’s raw material is copper scrap.
Maybe management can clarify the exact synergies but at 565 Cr why do you feel they overpaid?
Listed copper scrap recyclers, both commodity and value-added, even at a larger scale, trade at lower valuations than RMIL, which appears to be just a processor.
You are right, it’s better to wait for management’s rationale.
As Vedansh @RocketMan pointed out, RMIL focuses on internal reintegration than external recycling. The acquisition price, at around 1.8x PBV, seems reasonable. At ~8x EV/EBITDA for FY26, it also appears well below listed peers, who trade in the 12x–20x range. I feel, the key synergy Gravita targeting is supplying recycled copper to feed RMIL’s operations, as Gravita is gearing up to enter/start copper recycling.
1 Like
Q1 Conacall - Aluminium on MCX and Capacity Utilisation - So aluminum on MCX is already on process, and it’s expected to be done in this quarter. It’s already been considered in the Board of MCX and all documentation work at their end are completed. So we’re hopeful that they should open their first godown somewhere in the north. These are the data which we received from the MCX office**. 5% currently because we are not even using that plant**. So all the volume that is coming from – for aluminum are coming from our overseas locations only. So we believe that once this MCX will start setting up hedging mechanism for ADC12, we will start procuring material. And then I think by Q4, you can expect around 20% to 30% utilization of the plant for India.
Q2 Concall - Scrap Availability - Coming to the operational performance, with the government tightening BWMR and EPR framework, greater accountability has been introduced across producers, recyclers and collection agencies**. This has streamlined waste collection channels, reduced leakages to the unorganized sector and improved traceability, collectively driving an increase in domestic scrap availability.** Because of Battery Waste Management Rule, the shifting of material from unorganized to organized is already taking place. There is going to be a huge opportunity. Currently around only 35% of the total material comes to the organized sector. The expectation is that all of that would shift – I mean**, around 90% would shift to the organized sector in the next 2 to 3 years**. There is going to be huge capacity expansion throughout the organized sector in India. I don’t think that raw material is going to be an issue. we also have our own yards in overseas locations from where we import a lot of material. Currently, around 50% of our total scrap that we operate in India comes from there. Last year, around 36% of the battery was Indian battery and around 64% was imported.
Not in to Copper AS of Now - We keep on evaluating all segments in recycling, as we mentioned earlier also. So far, we are not focusing that much on copper because as per our studies, we see – I mean, value-addition in copper is very small. There is no copper scrap generation in India. We are not very confident of bringing copper scrap into India. Definitely, we’ll keep on re-evaluating copper as a segment as we do for other segments also. It’s not that we don’t want to do copper at all, but we regularly evaluate the market scenario, what is happening in different commodities.
Q3 Fy 26 - Q on Al MCX - And when it comes to MCX on aluminum, so this is also under consideration with MCX and I am hopeful in FY 2026 it should come by Q1 of FY 2026 - 2027. So, there was certain gap because there was change of their highest authority, CEO change was there somewhere in November and it has already been discussed in their meeting. And frankly speaking the call has to be taken by MCX, regulation is over and that is their business call and they also created specification committee also, but anytime they should do it.
On Copper Recycling - And we are looking seriously on all recycling verticals including solar panels, paper, steel and specifically copper also, because of the recent ecosystem that is happening in copper. And how the copper is behaving and the requirement of copper going forward. So, we believe that in future copper can also be one of the segments that Gravita would go into.
So, this acquisition seems to be a natural hedge against copper recycling since MCX listing of recycled metals seems to be long process. In similar way Crompton also getting in to domestic wire business to hedge against copper used in their ECD vertical.
5 Likes
Very insightful analysis
Disc - Not invested and not biased
1 Like
Rashtriya Metal Industries Limited (“RMIL”)
signed definitive agreements for acquisition of 98.95% stake of Rashtriya Metal Industries Limited (“RMIL”) for a total consideration of Rs. 559.08 Crores. The transaction is expected to be closed on or before 31st March 2026.
RMIL is one of the most reputed manufacturers of copper and copper alloy products, including strips and coils, with a strong export presence. Approximately 40% of RMIL’s revenue is derived from exports to key international markets such as the UAE, USA, Thailand, Sri Lanka, Kenya, Indonesia, Oman, and Saudi Arabia. The company operates an integrated manufacturing facility in Sarigam, Gujarat, spread across ~15 acres, with an installed production capacity of 31,200 MTPA.
RMIL has established a strong presence in electrical and automotive applications, providing Gravita access to high-entry-barrier and policy-supported segments aligned with India’s Make in India initiatives.
The proposed acquisition will enable Gravita to strategically expand into copper and copper alloy products, including recycling from copper scrap to copper alloys, complementing its existing businesses in lead, plastic, rubber, and aluminum recycling. This move will further strengthen Gravita’s position as an integrated recycling and value-added product manufacturer while enhancing its competitive positioning and margin profile.
Date of Incorporation November 28, 1946
Country of Incorporation India
CIN U99999MH1946PLC005378
Business undertaken Manufacturing copper & copper alloy products
Turnover of last three years (Rs. in crores)
Year Amount
FY 24-25 910
FY 23-24 688
FY 22-23 598
Presence in India
6 Likes