Gravita India Plans 59,200 MTPA Copper Recycling Capacity Addition With ₹64 Crore Investment

Market snapshot: Gravita India Limited has announced plans to expand its non-ferrous metal recycling footprint by adding 59,200 MTPA of copper recycling capacity at its facility in Mundra, Gujarat. The expansion, valued at approximately ₹64 crore, will be entirely funded via internal accruals and is slated for phased commissioning by March 31, 2029.

Data Snapshot

• Gravita plans to add 59,200 MTPA of copper recycling capacity at its Mundra facility.
• The project requires a capital expenditure of approximately ₹64 crore.
• The entire capital expenditure will be financed through internal accruals.
• The phased commissioning of the copper recycling plant is expected to be completed by March 31, 2029.

What's Changed

• This ₹64 crore copper recycling expansion follows previous capacity milestones, including the February 2026 lead recycling expansion at Mundra by 80,300 MTPA (investment of ₹49 crore) and a May 2026 board approval to set up a ₹160 crore copper plant at Mandvi. This represents a substantial escalation in Gravita's copper recycling business vertical.

Key Takeaways

• Capacity Expansion: Adding 59,200 MTPA of copper recycling capacity at Mundra in a phased manner by March 2029.
• Debt-Free Funding: Capital outlay of ₹64 crore is to be funded entirely through internal accruals, keeping debt levels unchanged.
• Backward Integration: The capacity serves as a backward integration mechanism to support the company's proposed Mandvi plant.
• Logistical Edge: Mundra's proximity to a major port offers strategic advantages in import-dependent scrap sourcing and global export markets.

SAHI Perspective

Gravita’s decision to scale copper recycling is a strategic move to capitalize on the high-margin non-ferrous recycling market. Historically a lead-dominant player, the firm is successfully diversifying into copper, which yields higher EBITDA per metric tonne. Financed via internal cash flows, this ₹64 crore expansion showcases robust cash-generation capability without leveraging the balance sheet, maintaining its stable credit profile.

Market Implications

The move is highly positive for long-term margins. Sourcing scrap globally via Mundra Port and integrating operations with the upcoming Mandvi copper plant will reduce reliance on third-party suppliers, insulate Gravita from volatile scrap spreads, and improve supply-chain predictability.

Trading Signals

Market Bias: Bullish

The expansion is a capital-efficient, debt-free move into higher-margin copper recycling, serving as backward integration for its proposed Mandvi plant and enhancing supply-chain margins. This is backed by a strong credit upgrade to ICRA AA (Stable) in June 2026.

Overweight: Metal Recycling, Non-Ferrous Metals

Trigger Factors:

• Progress of phased commissioning of the Mundra copper unit by March 31, 2029
• Fluctuations in global copper LME spreads
• Operational commissioning of the Mandvi plant

Time Horizon: Medium-term (3-12 months)

Industry Context

Non-ferrous metal recycling, particularly copper, is witnessing structural demand due to the global shift towards renewable energy, electric vehicles, and ESG-led circular economy initiatives. Lead recycling has been the largest business for Gravita, but the transition towards copper offers a significant boost to realization rates.

Key Risks to Watch

• Multi-Year Construction Timeline: A phased timeline extending to March 2029 exposes the project to execution delays and raw material inflation.
• Commodity Price Volatility: Profitability is highly sensitive to the spread between copper scrap purchase costs and LME copper realizations.

Recent Developments

Q1 FY27 Results: On July 27, 2026, Gravita reported a 14% YoY increase in consolidated net profit to ₹106.39 crore, with revenue rising 41.8% to ₹1,475 crore. Subsidiary Closure: The board approved closing operations of subsidiary Gravita Metal Inc. (effective August 1, 2026) to shift those operations to its more efficient Jaipur plant. Rating Upgrade: In June 2026, ICRA upgraded Gravita's long-term rating to [ICRA]AA (Stable) on fund-based facilities. Mandvi Plant setup: In May 2026, the board approved a ₹160 crore copper plant in Mandvi, Gujarat.

Closing Insight

Gravita India's internal accrual-funded expansion at Mundra highlights its operational maturity and strategic focus on margin-accretive segments like copper, laying a solid foundation for sustainable long-term cash flow generation.

High Performance Trading with SAHI.