Nuvama has initiated a Buy rating on Gravita India with a target price of Rs 3475, reflecting a potential 33% upside from the current market price (CMP) of Rs 2,529.00. The brokerage cites the company’s strong growth potential and regulatory tailwinds in the recycling sector as key reasons for its bullish stance. Gravita India is seen as well-positioned for sustained growth, supported by diversification efforts and stable profitability.
Key Highlights:
- Regulatory push for recycling: Nuvama notes that the recycling sector is receiving increased regulatory support, which will serve as an impetus for volume growth for Gravita India.
- Diversification strategy: Gravita India’s focus on diversification continues, with the company expected to achieve a Compound Annual Growth Rate (CAGR) of 34% in volumes over FY24-27E, driving its future growth.
- Profitability protection: Nuvama highlights that Gravita has implemented hedging strategies to maintain stable EBITDA margins, ensuring protection against fluctuations in input costs and other external factors.
- Premium valuation justified: The brokerage emphasizes that Gravita India’s strong financial standing warrants a premium valuation. According to Nuvama, the company is “financially strong—not just good,” making it an attractive investment at current levels.
Gravita India’s combination of regulatory support, successful diversification, and profitability safeguards positions it as a key player in the recycling sector with significant growth prospects.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult a financial advisor before making any investment decisions.
