India's recycling sector presents a compelling long-term growth story, with the market projected to expand from $0.89 billion in 2025 to $1.34 billion by 2030, representing a compound annual growth rate of 8.53%. This growth trajectory is supported by favorable government policies, rising waste generation, and increasing demand for sustainable raw materials, particularly in battery metals and plastics driven by rapid electric vehicle adoption.

Government Support Strengthens Sector Outlook

The Union Cabinet approved a significant ₹1,500 crore incentive scheme for critical mineral recycling on September 3, 2025, under the National Critical Mineral Mission. This initiative aims to enhance supply chain security by encouraging formal recycling of key waste streams including e-waste, spent lithium-ion batteries, and metal scrap from end-of-life vehicles. The Ministry of Mines issued detailed guidelines on October 2, 2025, with applications opening the same day.

India currently generates approximately 1.75 million tonnes of e-waste annually and nearly 60 kilotonnes of spent lithium-ion batteries, with availability expected to increase substantially over the next 4-5 years. Additionally, customs duty exemptions on lithium-ion battery scrap announced in Union Budget 2025-26 are likely to ease imports and support sector expansion.

Four Recycling Stocks Trading at Steep Discounts

Despite positive sector fundamentals, several recycling stocks are experiencing significant corrections, trading at substantial discounts from their 52-week highs due to near-term earnings pressure and margin contraction.

GRP Limited Performance Analysis

GRP Limited, an integrated polymer recycling company, reported challenging Q2 FY26 results with net profit declining to ₹1.96 crores from ₹2.51 crores in Q2 FY25, representing a 22% decrease. Revenue from operations grew marginally by 0.50% year-on-year from ₹131.65 crores to ₹132.36 crores.

The company faced US tariff-related pressures that impacted approximately 5% of reclaim rubber volumes, particularly affecting Thailand operations where volumes declined by 31%, resulting in a ₹6.20 crore quarterly revenue impact. Export raw material margins contracted by 15% year-on-year during the quarter.

Nupur Recyclers Limited Financial Snapshot

Nupur Recyclers, engaged in import and processing of ferrous and non-ferrous metals, trades at ₹55.86 with a 52-week high of ₹106.49 recorded on February 7, 2025. The stock has delivered negative returns of over 43% in the past year.

Eco Recycling Limited Overview

Eco Recycling Limited, specializing in e-waste collection and recycling services, reported mixed Q2 FY26 results. Net profit declined by over 31% to ₹5.60 crores from ₹8.18 crores in Q2 FY25, while revenue grew by 12% from ₹12.87 crores to ₹14.42 crores.

The stock currently trades at a P/E ratio of 47, significantly above the industry average of 20.50, indicating premium valuation despite recent corrections.

Ganesha Ecosphere Limited Challenges

Ganesha Ecosphere, a leading PET waste recycling company processing approximately 450 tons of PET bottle waste daily, faced the most significant challenges in Q2 FY26. The company reported a net loss of ₹0.50 crores compared to a profit of ₹27.11 crores in Q2 FY25, while revenue declined by 6% from ₹386.80 crores to ₹363.38 crores.

Management attributed weaker performance to higher raw material costs and uncertainty surrounding the draft notification issued by Ministry of Environment and Forests on June 3, 2025, which disrupted demand for recycled PET granules. However, the company has received commitments from existing customers with deliveries expected to resume from January 2026.

Investment Considerations

While these recycling stocks face near-term headwinds including margin pressure, regulatory uncertainty, and valuation concerns, the sector's long-term fundamentals remain robust. The combination of government support, growing waste generation, and increasing sustainability focus creates a favorable operating environment for well-positioned companies in the recycling space.

Eco Recycling has unveiled a comprehensive strategic initiative focused on recycling critical minerals, marking a significant step towards supporting India's circular economy objectives and strengthening national mineral security. The company's new approach addresses the increasing demand for sustainable mineral recovery and processing solutions.

Strategic Focus on Critical Minerals

The company's strategy centers on the recycling of important minerals that are essential for various industrial applications. This initiative aligns with India's broader environmental and economic goals, particularly in developing a robust circular economy framework that reduces waste and maximizes resource utilization.

Supporting National Objectives

The strategic announcement demonstrates the company's commitment to contributing to India's mineral security goals. By focusing on recycling critical minerals, the initiative aims to reduce dependence on mineral imports while promoting sustainable practices within the domestic market.

Circular Economy Contribution

The new strategy positions the company as a key player in India's transition towards a circular economy model. This approach emphasizes the recovery and reuse of valuable minerals, reducing environmental impact while creating economic value from materials that would otherwise be considered waste.

Industry Impact

This strategic development reflects the growing importance of sustainable mineral processing in India's industrial landscape. The initiative is expected to contribute to the country's efforts in building a more resilient and environmentally responsible mineral supply chain, supporting both economic growth and environmental sustainability objectives.