Ashish Kacholia Stocks: This industrial mineral share may clock 110% return in one year - Here is why

Ace investor Ashish Kacholia-backed stock – Gravita India has the potential to double the share price in a year on the back of strong growth and business outlook, brokerages said in their report. The stock on Tuesday closed flat with a negative bias at Rs 281.65 per share on the BSE. 

Kacholia, who is fondly called as Big Whale of the Indian stock market, has added 933,304 equity shares, which translates into a 1.4 per cent stake in Gravita India, as per the March 2022 quarter shareholding filing of the company available on the exchanges. 

The company’s consolidated revenue/profit grew year-on-year by 52/94 per cent during the March quarter of FY22 driven by lead plastics and operational efficiency, Gravita India said in its regulatory filing on Monday. Its Lead/Aluminum/Plastics volumes grew by 22/66/1 per cent YoY. 

Emkay Research raise FY23E/FY24E EPS by 19/13 per cent, building in a 10 per cent higher unit margin, based on the FY22 run-rate, steady environment, and some support from new verticals, which it has incorporated now.  

Maintaining a Buy stance, the brokerage arrives at a target price of Rs 430 a share (53% upside) using Discounted Cash Flow (DCF) method, implying a 14.3x FY24E target PE multiple, while also consolidating FCF (Free Cash Flow) from new verticals. 

Hem Securities expects Gravita India to grow at a decent CAGR (Compound Annual Growth Rate) of 25 per cent in the top-line while bottom-line is expected to grow at 35 per cent CAGR from FY22 to FY24E. It initiates a Buy coverage with a target of Rs 600 per share, implying a 110 per cent upside. 

Gravita India is a global leading non‐ferrous secondary metal and one of India’s largest secondary Lead metal producing company. Incorporated in 1992, It is engaged in the recycling of Used Lead Acid Batteries, Cable Scrap / other Lead Scrap, Aluminum Scrap and Plastic Scrap, etc.