We came across the IPO document of Gravita India. It is one of the major competitor to Pondy Oxide and both are operating an identical business. Interestingly, Gravita despite being a smaller company when compared to Pondy, is going public at more than 3 times the valuations commanded by already listed Pondy Oxide.
Here is a quick comparison sheet to highlight the huge valuation gap between two companies:
| Comparison sheet | ||
|---|---|---|
| Pondy Oxide | Gravita India | |
| Capacity (MT) | 32000 | 24000 |
| Standalone Turnover | 158 | 105 |
| Standalone NP | 5.8 | 5.77 |
| PE Ratio | 7 | 22 |
| Consolidated Turnover | 232 | 159 |
| Consolidated NP | 12.31 | 13.23 |
| PE Ratio | 3.25 | 9.5 |
| M Cap | 40 | 170 |
| Notes: | ||
| 1. Capacity is calculated on Standalone basis and | ||
| addition of various sub-segments | ||
| 2. M Cap of Gravita is based on price at upper band |
As highlighted by Gravita in its various articles and documents, the lead recycling business has great potential due to strong battery demand, we feel Pondy Oxide is a much better bet when compared to Gravita as the valuations are very attractive in Pondy Oxide.
With the IPO of Grativa opening tomorrow, investors will get more informed about this sector and might discover the undervaluation in Pondy Oxide.
Gravita India Website | Pondy Oxide Coverage