Gravita India reported a 31% year-on-year rise in second-quarter EBITDA to ₹1.34 billion, supported by strong performance in its copper and aluminium recycling divisions. While the lead segment faced supply chain and logistics challenges, the company is expanding its battery scrap sourcing regions. Investors may monitor how lead volume growth recovers, as some analysts have moderated their long-term expectations due to external risks.
Gravita India, a prominent player in the metal recycling industry, reported a robust financial performance for the second quarter of the 2027 fiscal year. The company recorded an EBITDA (a measure of core operating profit) of ₹1.34 billion. This marks a 31% increase compared to the same period last year and a 22% rise over the previous quarter, exceeding market expectations.
The strong result was primarily driven by the company's copper segment. In this business, EBITDA per tonne saw a significant 54% sequential increase, reaching ₹84,671. Additionally, the aluminium recycling business provided stable support to the overall profits. These segments helped offset weaker performance in the lead business, which has been a traditional volume driver for the company.
The lead segment, which primarily deals with recycling lead-acid batteries, has recently struggled with global scrap availability and logistics issues arising from international tensions. These factors have made it difficult for the company to maintain the volume growth pace seen in previous years. Management has indicated that while the most severe phase of these disruptions appears to be behind them, the recovery process is ongoing. The company is now focusing on new sourcing regions and the implementation of reverse charge mechanisms for battery scrap to improve domestic procurement efficiency.
While the company has previously guided for lead volume growth in the range of 18% to 20%, some analysts have adopted a more conservative outlook. Reports from financial institutions suggest that a lead volume growth rate of 10% is more likely over the next three years, citing lingering external economic risks. Consequently, earnings per share estimates for the 2028 fiscal year have been adjusted by some observers to reflect this slower volume outlook.
For investors, the long-term growth narrative hinges on the company's ability to navigate these global supply chain pressures. The shift toward more sustainable recycling practices and government regulations like Extended Producer Responsibility (EPR) remains a supporting factor for the industry. Moving forward, the key things to track will be the actual recovery in lead recycling volumes, the success of new scrap sourcing initiatives, and whether the company can maintain current profit margins in its copper and aluminium segments despite fluctuating commodity prices.