Gravita: Recycling Mandate—Boom or Risk for Shareholders

India’s push towards a circular economy is no longer just an environmental theme. It is becoming a serious business opportunity. With stricter Extended Producer Responsibility (EPR) norms and mandatory use of recycled plastic in packaging, organised recyclers like Gravita India are entering a potentially massive long-term growth phase. India’s recycled PET market, estimated at nearly $11 billion in 2023, is projected to touch almost $18 billion by 2030. Demand for recycled plastic is expected to cross 1 million tonnes by FY30 as FMCG and packaging companies are forced to increase recycled content in their products.

India, traditionally known for lead recycling, has steadily expanded into aluminium, plastic and other recycling verticals. The company is also entering copper recycling, reducing dependence on a single segment and building a diversified recycling platform. The company’s plastic recycling business is particularly important now. Management earlier indicated that this segment was operating at only around 40% capacity utilisation, but margins were superior compared to several other businesses. The new recycling mandate could improve utilisation levels sharply over the next few years. Financially, Gravita continues to show strong execution. In Q3 FY26, revenue remained steady at around Rs 1,017 crore, while adjusted EBITDA rose 13% YoY to Rs 116 crore. Net profit increased 32% YoY to nearly Rs 98 crore, with margins remaining healthy at around 9.6%. The company has earmarked over Rs 1,225 crore capex till FY28 for expansion into existing and new recycling verticals. If execution remains disciplined, India’s recycling transition could become a meaningful wealth creation opportunity for Gravita shareholders rather than just an ESG narrative. steadily