Summary
Gravita India Limited - Q3 FY 2026 Earnings Call Summary Friday, January 23, 2026, 1:00 PM
Event Participants
Executives 4 Anant Jain (Investor Relations), Naveen Sharma (Executive Director), Sunil Kansal (Whole-Time Director and CFO), Yogesh Malhotra (Whole-Time Director and CEO)
Analysts 10 Amay Sharda, Amit Dixit, Amit Lahoti, Aniket Madhwani, Devang Shah, Gaurav Shah, Kunal Devendra Kothari, Netra Deshpande, Nilabja Dey, Sagar Shah, Sumangal Nevatia, Sumant Kumar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,017 crores | Flat YoY/QoQ; impacted by lack of domestic capacity expansion and strategic focus on margins over volume. |
| Adjusted EBITDA | ₹116 crores | +13% YoY, +4% QoQ; supported by operating efficiencies, mix improvements, and arbitrage opportunities. |
| PAT | ₹97.67 crores | +32% YoY; PAT margins remained healthy at 9.60%. |
| Sales Volume (Total) | 52,982 MT | Modest sequential improvement; lead at 46,269 MT, plastic at 3,160 MT, aluminum at 3,553 MT. |
| Lead EBITDA/MT | ₹23,000 | Remained above guidance of ₹19,000-20,000 due to arbitrage in African imports. |
| Aluminum EBITDA/MT | ₹14,215 | Lower YoY; volumes declined as scrap aggregators withheld material due to rising metal prices. |
| Plastic EBITDA/MT | ₹10,462 | Strong volume rebound (+55% QoQ) after previous quarter stabilization. |
| Installed Capacity | 3.40 lakh MTPA | Progressing toward FY 2028 target of 7 lakh MTPA despite minor regulatory delays. |
Geographic & Segment Commentary
- Lead Segment: Reported steady YoY and QoQ growth, contributing the majority of volumes (46,269 MT). Strategic focus remains on value-added products and leveraging import arbitrage from African plants to India.
- Aluminum Segment: Volumes declined YoY/QoQ due to higher metal prices causing scrap aggregators to withhold inventory. Management is deferring Indian capacity expansion in this segment until MCX aluminum alloy trading is established.
- Plastic Segment: Recorded a strong volume rebound of 55% QoQ to 3,160 MT. Strategic focus is shifting toward high-margin primary packaging applications (PP granules) for OEMs like Asian Paints and battery manufacturers.
- Overseas Operations: Contributed 28% of revenue and 24% of profit. Management noted a 65% capacity utilization overseas, with some material moved to India for higher-margin processing.
Company-Specific & Strategic Commentary
- Capacity Expansion: Targeted completion of 80,000 MTPA lead expansion at Mundra and 45,000 MTPA at Jaipur by Q4 FY 2026. Delays were attributed to “Consent to Operate” formalities in Gujarat.
- Vision 2029: Aiming for a volume CAGR of 25% and profitability growth above 35%. Strategy involves increasing non-lead revenue contribution to 30% and achieving ROIC exceeding 25%.
- New Verticals: Earmarked CAPEX for entry into lithium-ion, paper, rubber, and steel recycling. Romania rubber facility contributed ₹3.5 crores in Q3, with lithium-ion operations expected to start in Q4 FY 2026.
- Strategic Investment: Increased stake in Gravita Europe S.R.L from 80% to 95% via Gravita Netherlands BV to strengthen the European market presence.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Volume Growth | 25% CAGR (Long-term) | Short-term volatility expected, but FY 2027 will see a catch-up as new capacities ramp up. |
| Profitability Growth | 30% - 35% (EBITDA/PAT) | Management focuses on bottom-line growth over top-line volume when arbitrage exists. |
| Lead Margin | ₹19,000 - ₹20,000 / MT | Conservative guidance maintained; current outperformance (₹23k) needs 6 months of sustainability for revision. |
| CAPEX | ₹1,225 crores total by FY 2028 | Focused on existing business expansion and new recycling verticals (Steel, Paper, Li-ion). |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Delays | “Consent to Operate” delays in Gujarat hindered immediate capacity utilization. Management expects these as one-off administrative delays during the “Vibrant Gujarat” event. |
| Asset Price Volatility | Rising aluminum prices led to scrap withholding by aggregators. While the cost-plus model protects margins, it negatively impacts procurement volumes. |
| Labor Law Impact | New labor laws regarding gratuity and leave encashment have an estimated annual impact of ₹4.2 crores starting FY 2027. |
| Hedging Limitations | While lead is 100% hedged, aluminum (ADC-12) lacks an efficient exchange-based hedging mechanism, limiting aggressive expansion in India. |
Q&A Highlights
Margin Sustainability & Guidance
- Question: Why maintain ₹19k-20k/MT lead margin guidance when reporting ₹23k? (Amit Lahoti)
- Answer: Current outperformance is driven by temporary arbitrage opportunities in African imports. Management wants to observe sustainability for another six months before revising long-term guidance (Yogesh Malhotra).
Capacity & Approvals
- Question: What caused the delay in capacity expansion at Mundra and Jaipur? (Amit Lahoti)
- Answer: Administrative delays in state-level “Consent to Operate” due to officials being occupied with the “Vibrant Gujarat” summit; physical capacity is ready (Yogesh Malhotra).
Raw Material Sourcing
- Question: How are domestic versus imported scrap mixes trending? (Amit Lahoti)
- Answer: Q3 saw 25% domestic and 75% imported scrap. This was tactical to stock up for capacity expansions; it will normalize to 45% domestic/55% imported (Sunil Kansal).
New Business Verticals
- Question: What is the status of the lithium-ion and rubber segments? (Aniket Madhwani)
- Answer: Lithium-ion “Consent to Operate” is expected in Q4 FY 2026. Rubber currently serves in-house needs but external sales will be reported starting next quarter (Yogesh Malhotra/Sunil Kansal).
Aluminum Segment Strategy
- Question: Why is aluminum volume down significantly? (Sumant Kumar)
- Answer: High metal prices caused scrap dealers to withhold inventory. Management also deferred Indian capacity expansion until MCX trading for aluminum alloy begins to enable hedging (Yogesh Malhotra/Sunil Kansal).
Key Takeaway
Gravita India delivered a resilient Q3 FY 2026 with a 32% YoY growth in PAT to ₹97.67 crores, despite flat revenue of ₹1,017 crores. Performance was characterized by a tactical prioritization of margins over volumes, particularly in lead, where EBITDA/MT reached ₹23,000 due to favorable import arbitrage. While aluminum volumes suffered from price-led scrap withholding and regulatory delays slowed the commissioning of 125,000 MTPA of new lead capacity, management expects these facilities to ramp up fully by H1 FY 2027. Strategic expansion into lithium-ion and rubber recycling remains on track for Q4 FY 2026. The company maintains its “Vision 2029” target of 25% volume CAGR and 35% profitability growth, supported by a healthy 25% ROCE floor for all new investments. Investors should monitor the timely receipt of operating licenses in Gujarat and the normalization of aluminum scrap procurement.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: