Synopsis: Gravita India Limited is making a major strategic shift with a Rs 700 crore investment in copper recycling. Through the acquisition of Rashtriya Metal Industries Limited, backward integration, and fresh capacity expansion, the company aims to replicate its lead recycling success in copper. The key investment question remains whether this diversification can deliver higher margins, stronger returns, and sustainable long-term profitability.
After building a strong position in lead recycling over the last three decades, Gravita India Limited is now entering its next growth phase through copper recycling. With a Rs 560 crore acquisition of Rashtriya Metal Industries Limited and an additional Rs 160 crore planned for backward integration, the company is creating a new value-added platform. As capacities expand and margins improve, investors are closely watching whether copper can emerge as Gravita’s next major profit engine and reshape its long-term growth story.
With a market cap of Rs 12,518 crore, the shares of Gravita India Ltd are trading at Rs 1,696 and are trading at a PE of 33 compared to their industry’s PE of 20. The shares have given a return of more than 1,500% in the last 5 years.
Building a Recycling Platform Beyond Lead
The fiscal year ending FY26 saw Gravita India Limited end up with another year of consistent execution. This came following a growth trend that has continued for the past five years where the company has seen its revenues, EBITDA, and net profits grow by 25%, 49%, and 31%, respectively.
Despite all the disruptions caused by geopolitics, logistics costs, and the uncertainty in the export market environment, the firm has been able to maintain its growth path thanks to proper execution and diversification. However, FY26 was special due to the company’s strategic focus on developing a platform in copper recycling.
By using acquisitions, backward integration, and setting up new facilities, Gravita India Limited has invested almost Rs 700 crore in developing the copper platform in the coming three years. The key question that investors have now is whether this copper platform will generate profitability like their lead product does.
A Business Already Operating From Scale
Prior to considering copper, it is essential to appreciate the platform that Gravita is developing. By FY26, Gravita’s capacity for recycling had reached approximately 4.57 lakh metric tonnes annually.
The management was keen to reiterate its mid-term goal of expanding this to over 8 lakh metric tonnes by FY29. During the month of February 2026, Gravita increased its capacity for lead recycling at Mundra by 80,300 metric tonnes, reaching a capacity of 145,100 metric tonnes.
The expansion required capital investment of Rs 49 crore, which was raised using internal accruals. Additionally, Gravita established a pilot facility for recycling lithium-ion batteries with a capacity of 6,000 metric tonnes in January 2026, requiring a capital investment of Rs.14 crore.
With these investments, it can be seen that Gravita is not only adding capacities to its core business activities but is also actually creating a platform for multi-metal recycling. This wider perspective suggests that copper is not a diversification strategy but Vision 2030 related to emerging recycling verticals.
The Rs.560 Crore Acquisition That Opened The Copper Door
Gravita entered the copper industry by purchasing a 99.44% equity shareholding in Rashtriya Metal Industries Limited for Rs 560 crore. As a result of this, Gravita was able to get an integrated manufacturing unit located in Gujarat with an annual capacity of 31,200 metric tonnes.
The company has a revenue contribution of around 40% from exports to various countries, including the UAE, USA, Thailand, Sri Lanka, Kenya, Indonesia, Oman, and Saudi Arabia. As per management, RMIL is operating at about 50% capacity at present, but it is the aim of Gravita to boost this figure to 60-65% during the next year and then double its capacity from 30,000 to almost 60,000 tonnes within three years.
At present, the products consist of copper sheets, brass cups, copper foils, and related items for use in the electric, electronics, coinage, and ammunition industries. It would appear that instead of entering the copper industry via commodity trading, Gravita decided to enter into manufacturing directly.
Why Another Rs 160 Crore Is Being Invested Immediately
However, merely acquiring this asset was not Gravita’s ultimate goal. The firm revealed its intention of setting up a copper recycling facility at Mandvi in Gujarat with an initial annual capacity of 29,400 metric tonnes in Phase 1.
This project will require a capital outlay of around Rs.160 crore and is likely to start commercial production in the coming twelve months. The funding of the said project will come from internal accruals. Time and again, the firm referred to this facility as backward integration for RMIL.
The rationale behind such a step is straightforward. Rather than buying processed copper inputs from any other firm, Gravita planned to produce this input internally and use the same in RMIL’s value chain.
While some production might also be available to the external market in case such an opportunity is presented, most of the output would cater to RMIL. In the next two to three years, management anticipated an increase in copper capacity to more than 100,000 tonnes per annum.
The Economics That Make Management Bullish
However, the assumptions around profitability mentioned during the earnings call present the most compelling rationale behind management’s decision to invest so heavily in copper. Currently, RMIL is generating around Rs 45,000 EBITDA per tonne in a sustainable manner.
Management projects that backward integration through the recycling plant will enable it to increase its EBITDA per tonne to Rs.65,000–Rs.70,000 over time. In further elaboration, management indicated that its EBITDA per tonne may go above Rs 65,000 in a two- to three-year horizon as synergies crystallise.
Such synergies are likely to arise from procurement efficiencies, sourcing of scrap, reduced input costs, and improved sales coordination. Furthermore, management indicated that the EBITDA margin of RMIL, which currently stands at approximately 8%, could rise to 9–10% over a two- to three-year period.
Under these assumptions, copper could emerge as one of the most profitable operations for Gravita in terms of EBITDA per tonne, well ahead of the sustainable Rs 19–Rs 20 per kilogram that management guides for lead.
Can Gravita Source Copper Efficiently?
Another issue in copper recycling is raw material sourcing. As compared to Gravita having a global network for sourcing lead from different developing countries around the globe, copper scrap is mainly available in developed countries.
It was clear from management that most of the copper will be sourced from developed countries such as the United States, Europe, Australia, Brazil, and South America. Nevertheless, Gravita feels that it has a competitive edge due to its current global network for sourcing material. Currently, Gravita sources batteries through its global network; therefore, it can use the same to source copper scrap along with batteries as well.
It is very crucial to note that sourcing copper from aggregators is not going to be profitable, as the process involves purchasing from aggregators and producing standard copper rods.
The capital commitment is large, but 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 management explained that Rs.200-300 crore will be spent on value-added products for copper, while Rs.300-500 crore will go into expanding capacities for the basic recycled copper business.
As far as capital investment is concerned, funding will come entirely from internal cash flows, but working capital needs will be significant because of imported raw materials. Working capital cycles are likely to continue at about 85-90 days, and the management expects working capital borrowings to go up to Rs 800-900 crore once copper reaches scale.
Nevertheless, management has said that looking at RMIL and recycling together, the integrated copper platform would generate a return on capital employed greater than 20%.
So, Will The Copper Entry Be Profitable?
Based on the management commentary alone, Gravita’s copper strategy seems focused on three primary sources of profits: immediate entry into a value-added operation, margins through backward integration, and scale over time through its own scrap sourcing network. With Gravita projecting 40-50% growth in its copper volumes in FY27, the current capacity utilisation of 50% at RMIL is aimed at increasing to 60-65% in the near term.
Over the next two to three years, capacity utilisation at Gravita is set to increase from 30,000 tonnes to 60,000 tonnes and then further cross 100,000 tonnes in FY29. Should Gravita manage to increase its EBITDA per tonne from Rs 45,000 to Rs 65,000-Rs 70,000, as per management guidance, its copper platform may turn out to be one of its highest-margin platforms, instead of being only a diversification play.
At present, based on the figures provided by the management, it seems like Gravita’s Rs.700 crore copper foray is not so much an entry into another metal but an attempt at recreating its lead playbook in an even more lucrative space.
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