Gravita India Ltd.

“Gravita India is a capital-efficient, founder-led secondary recycling platform benefiting from a durable structural tailwind — India's EPR regulation converting 60%+ informal recycling volumes into the formal economy. The competitive position is real: a 30-year scrap procurement network, multi-material capabilities, and EPR compliance infrastructure. However, ROIC has compressed from ~21% to ~12% as invested capital nearly tripled in three years, FCF has been negative in two of the last three years, and net debt surged from INR 1.88B to INR 6.52B in FY2026 alone. At 32.5x trailing P/E, the stock prices in continued high-return execution at a time when execution is unproven on the new capital base. The base-case 5-year return of ~8% CAGR is below opportunity cost; a 20-25% correction to INR 1,250-1,350 would make this a compelling BUY.”