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Gravita India Ltd.'s shares climbed as much as 6 percent in intraday trade on Monday after the company announced the commencement of commercial production at its aluminium recycling plant in West Africa.

The company's aluminium plant belongs to its step-down subsidiary in Senegal and has an annual capacity of around 4,000 million tonnes per annum.

The manufacturer and exporter of lead metals is expecting an additional revenue of approximately Rs 60 crore per annum with a gross margin of nearly 20 percent from the new capacity. An investment of Rs 3.5 crore has been made for the new plant, which the company has spent from internal accruals.

The domestic aluminium scrap procured from this plant will cater to the needs of the auto and FMCG companies in China, Japan, and Vietnam.

In CNBC-TV18's dealing room check last week, Gravita was in focus as dealers were anticipating a large block deal in the company. Based on exchange data, investor Atul Kuchhal sold nearly 15 lakh shares of the company over Thursday and Friday, of which close to 5.6 lakh shares were bought by the Abu Dhabi Investment Authority, who made the purchase at Rs 332 apiece.

In a research report

released in September 2022, equity research firm Emkay issued a ‘buy’ rating on the Gravita stock with a one-year target price of Rs 445, indicating an upside of nearly 25 percent from current levels. “We remain upbeat on the strong volume outlook and optimisation, and reiterate our Buy rating for Gravita,” Emkay said in its report.

(Edited by : Rukmani Krishna)