Downgrades

We maintain our BUY recommendation on the stock.

Gravita India (GRAVITA) reported 12% YoY revenue growth in 2QFY26, driven by a 4% YoY rise in total volumes, mainly led by 5% YoY volume growth in Lead.

Gravita India’s (GRAV) performance was in-line with consensus estimates. The company reported EBITDA at INR 1bn (+15%/+9% YoY/QoQ) driven by, total volumes rising 12.4% YoY to 53.4Kte (flat YoY), better margins at the lead segment (INR 21,790/te; up 13%/7% YoY/QoQ), as GRAV used higher imported material that fetched better pricing.

1QFY26 revenue declined 4% YoY/15% QoQ to INR77.7b, in line with our est. of INR75.7b. The decline was primarily driven by lower volumes and low commodity prices, offset by higher prices of silver and by-products and stronger dollar.

We recommend a BUY rating on the stock with a target price of Rs 2,045/share, implying an upside of 10% from the CMP

We maintain our BUY recommendation on the stock.

Gravita India’s (GRAV) performance was in line with our estimates. EBITDA (including hedging gains) was up 22% YoY at INR 1.06bn. EBITDA margin (adj.) was up 20bps YoY (30bps QoQ) at 10.3%. Lead sales volume rose 12.3% YoY at 45.6kt.

GRAV reported a stable quarterly performance, with Q4FY25 EBITDA of Rs1,085mn (+6.1% QoQ; +16.8% YoY). Operating revenue increased 3.5% sequentially to Rs10.5bn, with Lead sales being the key driver of the sequential delta, in line with our estimate of Rs10.2bn.

In 4QFY25, Gravita India (GRAVITA) recorded a strong 20% YoY revenue growth, underpinned by a 13% YoY rise in overall volumes. The aluminum business led the performance with a sharp 73% YoY growth, followed by a 19% increase in lead revenues, whereas the plastic segment witnessed a 16% YoY decline.

Hindustan Zinc (HZ)’s revenue was INR86b (YoY/QoQ: +18%/+4%) vs. our estimate of INR82b.

Gravita India (GRAVITA) reported strong revenue growth of ~31% YoY in 3QFY25, aided by total volume growth of 33% YoY. The growth was broadbased across segments, with aluminum reporting the highest growth (2.4x YoY), following by plastics (44%) and lead (up 23% YoY). However, adj. EBITDA/kg declined 14% to INR19.1, due to higher sourcing of domestic scrap (44%) in 3Q.

Hindustan Zinc (HZ) reported EBITDA tad below our estimates by 3% due to lower volumes. While, earnings beat consensus estimates by 6%. HZ missed its guidance on volumes and ore grade over last 3-4 years due to weaker than assessed ore grade. Ore grade has fallen by ~30% in last 5 years due to lower grade of new mines and reduced share of Rampura Agucha (RA) mines. As the new shafts at both RA and Sindesar Khurd (SK) mines...

In Q1FY21, standalone revenue fell 20.8% YoY to Rs. 3,898cr, mainly due to weaker revenue from Zinc (-27.0% YoY, 65.7% of total revenue) and Lead (-11.7% YoY, 15.5% of total revenue). The drop in revenue was attributable to reduced prices (Zinc LME: -29.0% YoY and Lead LME: -11.2%YoY), lower volumes (impacted by the COVID-19 pandemic) and shrunk premiums (due to adverse domestic-export mix), partly offset by rupee depreciation. Mined metal production dropped 5.2% YoY to 202kt owing to outage in April during the lockdown. Saleable Silver production decreased to 117mt (-26.4% YoY) due to delayed stabilization of DSC lead smelter and increase in WIP,...

Hindustan Zinc (HZ) reported earnings in line with ours/consensus estimates. HZ missed its guidance on volumes and ore grade over past couple of years due to delay in commissioning of shafts and weaker than assessed ore grade. As the new shafts at both Rampura Agucha (RA) and Sindesar Khurd (SK) mines commenced hauling of ore, we expect significant improvement in quality of operations with better visibility on production and lower costs. In last five years since FY15, ore grade has fallen by ~30% to 7.5% due to fall in...