Synopsis: Gravita India Restricted is making a serious strategic shift with a Rs 700 crore funding in copper recycling. By means of the acquisition of Rashtriya Steel Industries Restricted, backward integration, and contemporary capability enlargement, the corporate goals to copy its lead recycling success in copper. The important thing funding query stays whether or not this diversification can ship greater margins, stronger returns, and sustainable long-term profitability.
After constructing a robust place in lead recycling during the last three a long time, Gravita India Restricted is now coming into its subsequent progress part by copper recycling. With a Rs 560 crore acquisition of Rashtriya Steel Industries Restricted and an extra Rs 160 crore deliberate for backward integration, the corporate is creating a brand new value-added platform. As capacities increase and margins enhance, traders are intently watching whether or not copper can emerge as Gravita’s subsequent main revenue engine and reshape its long-term progress story.
With a market cap of Rs 12,518 crore, the shares of Gravita India Ltd are buying and selling at Rs 1,696 and are buying and selling at a PE of 33 in comparison with their business’s PE of 20. The shares have given a return of greater than 1,500% within the final 5 years.
Constructing a Recycling Platform Past Lead
The fiscal 12 months ending FY26 noticed Gravita India Restricted find yourself with one other 12 months of constant execution. This got here following a progress development that has continued for the previous 5 years the place the corporate has seen its revenues, EBITDA, and web income develop by 25%, 49%, and 31%, respectively.
Regardless of all of the disruptions brought on by geopolitics, logistics prices, and the uncertainty within the export market setting, the agency has been in a position to preserve its progress path because of correct execution and diversification. Nonetheless, FY26 was particular as a result of firm’s strategic give attention to growing a platform in copper recycling.
Through the use of acquisitions, backward integration, and establishing new amenities, Gravita India Restricted has invested virtually Rs 700 crore in growing the copper platform within the coming three years. The important thing query that traders have now’s whether or not this copper platform will generate profitability like their lead product does.
A Enterprise Already Working From Scale
Previous to contemplating copper, it’s important to understand the platform that Gravita is growing. By FY26, Gravita’s capability for recycling had reached roughly 4.57 lakh metric tonnes yearly.
The administration was eager to reiterate its mid-term purpose of increasing this to over 8 lakh metric tonnes by FY29. In the course of the month of February 2026, Gravita elevated its capability for lead recycling at Mundra by 80,300 metric tonnes, reaching a capability of 145,100 metric tonnes.
The enlargement required capital funding of Rs 49 crore, which was raised utilizing inside accruals. Moreover, Gravita established a pilot facility for recycling lithium-ion batteries with a capability of 6,000 metric tonnes in January 2026, requiring a capital funding of Rs.14 crore.
With these investments, it may be seen that Gravita is just not solely including capacities to its core enterprise actions however can be truly making a platform for multi-metal recycling. This wider perspective means that copper is just not a diversification technique however Imaginative and prescient 2030 associated to rising recycling verticals.
The Rs.560 Crore Acquisition That Opened The Copper Door
Gravita entered the copper business by buying a 99.44% fairness shareholding in Rashtriya Steel Industries Restricted for Rs 560 crore. Because of this, Gravita was in a position to get an built-in manufacturing unit positioned in Gujarat with an annual capability of 31,200 metric tonnes.
The corporate has a income contribution of round 40% from exports to numerous international locations, together with the UAE, USA, Thailand, Sri Lanka, Kenya, Indonesia, Oman, and Saudi Arabia. As per administration, RMIL is working at about 50% capability at current, however it’s the purpose of Gravita to spice up this determine to 60-65% through the subsequent 12 months after which double its capability from 30,000 to virtually 60,000 tonnes inside three years.
At current, the merchandise encompass copper sheets, brass cups, copper foils, and associated gadgets to be used within the electrical, electronics, coinage, and ammunition industries. It might seem that as an alternative of coming into the copper business through commodity buying and selling, Gravita determined to enter into manufacturing instantly.
Nonetheless, merely buying this asset was not Gravita’s final purpose. The agency revealed its intention of establishing a copper recycling facility at Mandvi in Gujarat with an preliminary annual capability of 29,400 metric tonnes in Section 1.
This venture would require a capital outlay of round Rs.160 crore and is more likely to begin business manufacturing within the coming twelve months. The funding of the stated venture will come from inside accruals. Again and again, the agency referred to this facility as backward integration for RMIL.
The rationale behind such a step is simple. Quite than shopping for processed copper inputs from every other agency, Gravita deliberate to supply this enter internally and use the identical in RMIL’s worth chain.
Whereas some manufacturing may also be obtainable to the exterior market in case such a chance is offered, a lot of the output would cater to RMIL. Within the subsequent two to 3 years, administration anticipated a rise in copper capability to greater than 100,000 tonnes each year.
The Economics That Make Administration Bullish
Nonetheless, the assumptions round profitability talked about through the earnings name current essentially the most compelling rationale behind administration’s determination to take a position so closely in copper. At the moment, RMIL is producing round Rs 45,000 EBITDA per tonne in a sustainable method.
Administration tasks that backward integration by the recycling plant will allow it to extend its EBITDA per tonne to Rs.65,000–Rs.70,000 over time. In additional elaboration, administration indicated that its EBITDA per tonne might go above Rs 65,000 in a two- to three-year horizon as synergies crystallise.
Such synergies are more likely to come up from procurement efficiencies, sourcing of scrap, decreased enter prices, and improved gross sales coordination. Moreover, administration indicated that the EBITDA margin of RMIL, which at the moment stands at roughly 8%, may rise to 9–10% over a two- to three-year interval.
Underneath these assumptions, copper may emerge as one of the vital worthwhile operations for Gravita by way of EBITDA per tonne, properly forward of the sustainable Rs 19–Rs 20 per kilogram that administration guides for lead.
Can Gravita Supply Copper Effectively?
One other difficulty in copper recycling is uncooked materials sourcing. As in comparison with Gravita having a worldwide community for sourcing lead from completely different growing international locations across the globe, copper scrap is especially obtainable in developed international locations.
It was clear from administration that a lot of the copper shall be sourced from developed international locations resembling the US, Europe, Australia, Brazil, and South America. However, Gravita feels that it has a aggressive edge resulting from its present world community for sourcing materials. At the moment, Gravita sources batteries by its world community; due to this fact, it might use the identical to supply copper scrap together with batteries as properly.
It is rather essential to notice that sourcing copper from aggregators is just not going to be worthwhile, as the method includes buying from aggregators and producing normal copper rods.
The capital dedication is giant, however so is the return expectation.
The CAPEX forecast for Gravita has gone up from Rs 1,200 crore to Rs 1,700 crore over FY29. The administration defined that Rs.200-300 crore shall be spent on value-added merchandise for copper, whereas Rs.300-500 crore will go into increasing capacities for the fundamental recycled copper enterprise.
So far as capital funding is worried, funding will come completely from inside money flows, however working capital wants shall be vital due to imported uncooked supplies. Working capital cycles are more likely to proceed at about 85-90 days, and the administration expects working capital borrowings to go as much as Rs 800-900 crore as soon as copper reaches scale.
However, administration has stated that taking a look at RMIL and recycling collectively, the built-in copper platform would generate a return on capital employed higher than 20%.
So, Will The Copper Entry Be Worthwhile?
Primarily based on the administration commentary alone, Gravita’s copper technique appears centered on three main sources of income: quick entry right into a value-added operation, margins by backward integration, and scale over time by its personal scrap sourcing community. With Gravita projecting 40-50% progress in its copper volumes in FY27, the present capability utilisation of fifty% at RMIL is aimed toward growing to 60-65% within the close to time period.
Over the following two to 3 years, capability utilisation at Gravita is ready to extend from 30,000 tonnes to 60,000 tonnes after which additional cross 100,000 tonnes in FY29. Ought to Gravita handle to extend its EBITDA per tonne from Rs 45,000 to Rs 65,000-Rs 70,000, as per administration steerage, its copper platform might become one in all its highest-margin platforms, as an alternative of being solely a diversification play.
At current, primarily based on the figures offered by the administration, it looks like Gravita’s Rs.700 crore copper foray is just not a lot an entry into one other steel however an try at recreating its lead playbook in an much more profitable area.
Disclaimer: The views and funding ideas expressed by funding specialists/broking homes/ranking companies on tradebrains.in are their very own, and never that of the web site or its administration. Investing in equities poses a threat of monetary losses. Buyers should due to this fact train due warning whereas investing or buying and selling in shares. Commerce Brains Applied sciences Personal Restricted or the writer should not accountable for any losses induced because of the choice primarily based on this text. Please seek the advice of your funding advisor earlier than investing.
