Shrikant Chouhan of Kotak Securities has recommended CarTrade Tech and Gravita India, highlighting growth drivers ranging from digital marketplace monetisation to capacity expansion and entry into the copper recycling business.
CarTrade Tech
Recommendation: Buy
CMP: ₹2,070
Fair Value: ₹2,300
Resistance: ₹2,120-₹2,220
Support: ₹2,010-₹1,880
CarTrade Tech operates digital platforms across automotive classifieds, auctions and online marketplaces through brands such as:
- CarWale
- CarTrade
- BikeWale
- Shriram Automall (SAMIL)
- OLX India
Kotak Securities said concerns around AI-driven disruption have weighed on the stock. However, the brokerage believes the company’s dealer network, automotive data and value-added services provide competitive advantages.
OLX India seen as a key growth driver
The brokerage said OLX India remains the only scaled player in India’s second-hand goods marketplace.
Since its acquisition in 2023, the platform has maintained a monthly active user base of 30-32 million, driven entirely by organic traffic.
Kotak estimates annualised gross merchandise value (GMV) on the platform stood at around $3 billion in FY25 and increased further in FY26.
Monetisation opportunity
Despite handling a large transaction volume, OLX generated revenue of only ₹220 crore in FY26.
Its take rate stood at roughly 0.7%, leaving room for further monetisation.
Potential growth initiatives include:
- Elite Buyer Program
- User verification services
- Premium listings
- Other value-added offerings
Profitability remains strong
OLX reported:
- EBITDA of ₹67.1 crore
- Profit after tax of ₹82 crore in FY26
Kotak expects EBITDA margins to improve further.
Margin estimates
- FY26: 31%
- FY27: 37%
- FY28: 39%
The brokerage values OLX at 35 times FY28 EV/EBITDA, implying an enterprise value of ₹4,800 crore.
That forms the basis for its revised fair value of ₹2,300 per share and a “Buy” recommendation on CarTrade Tech.
Gravita India
Recommendation: Add
CMP: ₹1,547
Fair Value: ₹1,910
Resistance: ₹1,620-₹1,650
Support: ₹1,510-₹1,460
Gravita India operates in the recycling of:
- Lead
- Aluminium
- Plastic
- Lithium-ion batteries
- Waste tyres
Lead recycling remains the company’s core business, supported by aluminium and plastic recycling operations.
Q4 earnings beat estimates
Kotak said Q4 FY26 profit after tax, which declined 3.4% year-on-year, came in ahead of expectations.
Higher volumes partly offset pressure on margins.
The brokerage noted that tensions in the Middle East affected profitability, as the region contributes around 10-15% of volumes.
Entry into copper recycling
Gravita recently acquired Rashtriya Metal Industries (RMIL) for ₹560 crore, marking its entry into the copper business.
RMIL operates a plant at Sarigram, Gujarat, with:
- Capacity of 31.2 ktpa
- FY26 revenue of ₹1,040 crore
- EBITDA of ₹80 crore
Expansion plans
The company plans to set up a 29.4 ktpa copper recycling facility at Mandvi, Gujarat.
The project involves:
- Capital expenditure of ₹160 crore
- Completion over the next 12 months
In the next phase, Gravita may add another 30 ktpa of capacity at each of its copper plants.
Utilisation at RMIL currently stands at around 50%.
Kotak expects this to rise to 60-65%, while margins could improve from ₹45 per kg to ₹70 per kg over FY27-FY29 following integration.
Capacity additions to support growth
Several projects are expected to contribute to volume growth.
Upcoming capacities
- 80 ktpa lead capacity at Mundra commissioned in Q4 FY26
- 45 ktpa lead capacity at Phagi expected in H1 FY27, subject to approvals
- India rubber capacity likely to start operations during the same period
The brokerage expects these projects to help drive annual volume growth of 20-25% over the next two to three years.
Lithium-ion battery segment
Gravita’s pilot lithium-ion battery recycling plant at Mundra has become operational.
However, the company does not expect meaningful revenue from the segment in the near term.
Kotak has retained its “Add” rating and a fair value of ₹1,910.
Key levels at a glance
| Stock | Recommendation | CMP | Fair Value |
|---|---|---|---|
| CarTrade Tech | Buy | ₹2,070 | ₹2,300 |
| Gravita India | Add | ₹1,547 | ₹1,910 |
TL;DR
Kotak Securities has recommended CarTrade Tech and Gravita India. The brokerage sees growth potential in OLX India’s monetisation opportunities and Gravita’s expansion into copper recycling and capacity additions.
AI Summary
- Kotak Securities has a “Buy” rating on CarTrade Tech.
- OLX India is seen as a major value driver for the company.
- Gravita India has been assigned an “Add” rating.
- Gravita has entered the copper recycling business through RMIL.
- Capacity additions are expected to support 20-25% volume growth.
