Key Events This Week
9 Feb: Reports very positive quarterly financial performance with record profitability
10 Feb: Valuation shifts signal renewed investor interest and Mojo Grade upgrade
11-13 Feb: Continued strong price gains amid mixed market conditions
13 Feb: Week closes at Rs.14.52, up 27.37% for the week
9 February: Quarterly Financial Performance Spurs Initial Rally
Gravity (India) Ltd kicked off the week with a strong 5.00% gain, closing at ₹11.97, following the release of its quarterly results for the period ended December 2025. The company reported record highs in key profitability metrics, including a Profit Before Depreciation, Interest and Tax (PBDIT) of ₹6.10 crores and a net profit (PAT) of ₹4.50 crores, both the highest in its history. Earnings per share (EPS) rose to ₹5.00, signalling enhanced shareholder value.
This robust financial performance reflected effective cost management and margin expansion despite sectoral challenges such as raw material price volatility. The company’s financial trend score improved markedly to 21 from 15, indicating very positive momentum. The stock’s outperformance was notable against the Sensex’s 1.04% gain on the same day, highlighting strong investor confidence in the company’s fundamentals.
10 February: Valuation Re-rating Fuels Further Gains
On 10 February, Gravity’s stock price advanced another 4.93% to close at ₹12.56, supported by a significant shift in valuation metrics and market perception. The company’s price-to-earnings (P/E) ratio moderated to 6.59, down from levels that had previously classified it as very expensive, while the price-to-book value (P/BV) remained elevated at 5.23. Enterprise value to EBITDA (EV/EBITDA) stood at 1.84, suggesting an attractive operational valuation relative to peers.
This valuation adjustment coincided with an upgrade in the Mojo Grade from Sell to Hold, reflecting improved investor sentiment and a more balanced risk-reward profile. Despite a deeply negative return on capital employed (ROCE) of -72.94%, the company’s return on equity (ROE) was a striking 277.67%, underscoring strong profitability for shareholders. The Sensex gained a modest 0.25% on this day, while Gravity’s stock outperformed with a near 5% rise.
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11 to 13 February: Sustained Momentum Amid Market Volatility
Gravity continued its upward trajectory over the next three trading sessions, gaining 4.94% on 11 February to ₹13.18, 4.93% on 12 February to ₹13.83, and 4.99% on 13 February to close at ₹14.52. These gains came despite the Sensex declining on the last two days by 0.56% and 1.40% respectively, underscoring Gravity’s strong relative strength.
The surge was supported by heightened trading volumes, particularly on 11 February when volume spiked to 50,827 shares, indicating robust investor interest. The stock’s 52-week trading range of ₹3.94 to ₹15.93 highlights the significant appreciation it has achieved over the past year, with current levels approaching the upper end of this range.
Throughout this period, Gravity’s financial and valuation improvements remained key drivers, with the company’s ability to sustain margin expansion and profitability gains in a challenging garments and apparels sector environment reinforcing confidence.
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Daily Price Comparison: Gravity (India) Ltd vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-09 | Rs.11.97 | +5.00% | 37,113.23 | +1.04% |
| 2026-02-10 | Rs.12.56 | +4.93% | 37,207.34 | +0.25% |
| 2026-02-11 | Rs.13.18 | +4.94% | 37,256.72 | +0.13% |
| 2026-02-12 | Rs.13.83 | +4.93% | 37,049.40 | -0.56% |
| 2026-02-13 | Rs.14.52 | +4.99% | 36,532.48 | -1.40% |
Key Takeaways
Strong Quarterly Earnings: Gravity’s record quarterly profitability, with PBDIT of ₹6.10 crores and PAT of ₹4.50 crores, underpinned the stock’s initial surge and demonstrated operational resilience in a challenging sector.
Valuation Re-rating: The shift from a very expensive to an expensive valuation rating, alongside a Mojo Grade upgrade to Hold, reflected improved market sentiment and a more balanced risk profile despite some operational inefficiencies.
Robust Stock Performance: The stock’s 27.37% weekly gain vastly outperformed the Sensex’s 0.54% decline, highlighting strong relative strength and investor confidence.
Mixed Profitability Metrics: While ROE was exceptionally high at 277.67%, the deeply negative ROCE of -72.94% signals underlying capital efficiency challenges that warrant monitoring.
Volume Spike and Momentum: Elevated trading volumes, especially on 11 February, supported sustained price gains, indicating active investor participation.
Sector Context: Gravity’s margin expansion and profitability gains stand out in the garments and apparels sector, which continues to face raw material cost pressures and competitive challenges.
Conclusion
Gravity (India) Ltd’s week was characterised by a powerful rally driven by record quarterly earnings and a favourable shift in valuation metrics. The company’s ability to deliver strong profitability amid sector headwinds and its significant outperformance relative to the Sensex underscore its improving market position. However, the contrasting profitability indicators, particularly the negative ROCE, suggest that operational efficiencies remain an area to watch. The Mojo Grade upgrade to Hold reflects a balanced view of the company’s prospects, signalling cautious optimism. Investors should continue to monitor upcoming financial results and sector developments to assess whether Gravity can sustain this momentum and justify its elevated valuation.
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