Quick answer
The Heart of Vatra is in the Temple of Vatra east of the One Legged Wolf Tavern/Beacon. Cross the eastern cliffside/traversal route, climb the temple and take the Heart from the corrupted statue. The pickup triggers an ambush; use the side escape if the original route closes, then return the Heart to Gragu.
Start with Gragu
Go inside the One Legged Wolf Tavern and keep talking to Gragu until his real request appears. The game intentionally makes him refuse several interactions before he explains that he wants the Heart.
You can fetch the item first, but starting the conversation makes the purpose clear and gives you an easy return target.
Temple route
From the tavern/Beacon, follow the path east along the cliff and use the traversal/Bone Gate route into the Temple of Vatra area.
The map can be awkward here because the temple sits in a permanently obscured pocket according to current launch walkthroughs. Use the tavern and eastward ravine crossing as landmarks.
Pick up the Heart
At the upper/end section of the temple, interact with the statue holding the Heart. The petrified enemies around the area wake immediately.
You can fight them for loot, but you do not need to clear the whole ambush to finish Gragu’s quest.
If the exit is blocked
Do not assume you softlocked the temple. Current routes describe a side/broken-wall escape that loops back toward the exterior crossing when the obvious gate is closed.
Return to the One Legged Wolf Tavern and hand the Heart to Gragu.
What happens after you give it to him
Gragu consumes the Heart and dies during the sequence. That is not a failed quest. His corpse is the reward: interact with it to add Gragu as a playable Shell.