India is slowly moving towards a circular economy. The idea is straightforward. Use less. Waste less. Recycle more. Instead of throwing away used products, the focus is now on bringing them back into the system.
This shift has become necessary. Landfills are filling up. Imports of raw materials are rising. Pollution remains a concern.
Recycling is no longer just about the environment. It is now linked to long-term economic sustainability.
This change is becoming visible across sectors.
Battery and e-waste recycling rules are getting stricter. Scrap trading is moving away from informal dealers to organised platforms. Waste segregation is improving in many cities, even if progress is uneven. Companies are being asked to take responsibility for what they discard. Extended Producer Responsibility norms are being enforced more seriously. Together, these steps are helping the organised recycling industry expand.
The Regulatory Catalyst: EPR Norms and Urban Mining
The timing of this theme is also important. Most of the policy framework is now in place. Implementation is improving. Private investment in recycling capacity is picking up. At the same time, demand for recycled metals and processed waste is increasing. This is turning recycling into a viable business opportunity. Not just a social initiative. But a commercial one as well.
The stocks in this article have been selected with this background in mind. Each company has clear exposure to recycling, waste processing, or organised scrap monetisation. These activities form a meaningful part of their business. They are not small side projects.
The companies operate within regulated systems and provide regular disclosures. They also have room to grow as the industry expands. Several other ESG-focused firms have been left out, as recycling remains a minor contributor to their revenues. The focus here is on businesses that are better placed to benefit from India’s circular economy push.
#1 Gravita India: The Multi-Vertical Leader in Secondary Metal Recycling
Established in 1992, Gravita India is one of the largest Lead producers in India. The company’s business is organized across four specialized verticals: Lead recycling (flagship), aluminium recycling, plastic recycling and turnkey projects.
The company also has expertise in the recycling of used batteries, cable scrap/other Lead scrap, aluminium scrap, plastic scrap, etc.
Gravita India reported a steady performance in the December quarter, with stable operations and improved profitability. In Q3 FY26, revenue stood at Rs 1,017 crore and remained flat compared to last year. Net profit increased 32% year-on-year (YoY) to Rs 97.7 crore, supported by better margins and operating discipline.
The Lead segment continued to remain stable in the first nine months of FY26. Plastic volumes recovered sharply on a quarter-on-quarter basis. Aluminium volumes declined due to higher scrap prices and temporary supply constraints.
On the expansion front, Gravita is completing Lead capacity additions at Mundra and Jaipur by Q4 FY26. The rubber project is scheduled for commissioning in Q1 FY27. The company has also increased its stake in its European subsidiary to strengthen overseas operations.
Management expects volumes to improve from FY27 as new capacities stabilise, though performance in the near term will remain linked to commodity trends and regulatory approvals.
In the past year, Gravita India share price fell 20.3%.
Gravita India 1-Year Share Price Chart
#2 MSTC: The Government’s Digital Backbone for Scrap Monetization
MSTC (Metal Scrap Trade Corporation) undertakes trading activities, e-commerce and also disposal of ferrous and non-ferrous scrap, surplus stores, minerals, agri and forest products, etc. The company is owned and controlled by the Government of India.
MSTC continues to work mainly as a government-owned e-auction and digital services platform, with most of its assignments coming from public sector bodies and regulators. Over time, the company has been shifting away from trading activity and focusing more on operating online auction systems and technology platforms. During the first half of FY26, MSTC facilitated transactions with a total value of over Rs 3 lakh crore across its platforms, reflecting steady underlying activity.
One of the projects under development is an electronic platform for trading Extended Producer Responsibility certificates for the Central Pollution Control Board. The company has indicated that this is still at an early stage and will scale only as implementation of EPR norms improves.
MSTC has also been tasked by the Directorate General of Foreign Trade to build an online system for allocating tariff rate quotas for gold bullion imports, which could later be extended to other products. The company is yet to declare Q3 results.
The company continues to secure long-term mandates from government agencies. These include a 30-year agreement with Syama Prasad Mookerjee Port, Kolkata, and fresh assignments for conducting e-auctions of mineral blocks, sand mining rights, coal blocks and excise licences across states. Near-term activity will depend on the timing of auctions and regulatory decisions.
In the past year, MSTC share price has sunk 22.5%.
MSTC 1-Year Share Price Chart
#3 Lloyds Metals and Energy: Scaling the Iron Ore and Value-Added Pellet Chain
Lloyds Metals & Energy is into the business of manufacturing of Sponge Iron, Power generation and mining activities.
Lloyds Metals and Energy recorded a sharp improvement in performance during the December quarter as mining volumes and downstream operations scaled up. In Q3 FY26, standalone revenue rose 129% YoY to Rs 3,875 crore. Net profit increased 128% to Rs 889 crore, helped by higher iron ore production and better utilisation of pellet capacity.
Iron ore and pellets remained the main contributors. The pellet plants reached stable utilisation within a short period after commissioning. The slurry pipeline continued to support ore movement and reduced logistics bottlenecks. A higher share of value-added products also supported operating stability.
On the expansion front, the second pellet plant is scheduled for commissioning by Q2 FY27. A 1.2 million tonne wire rod mill is planned for completion by Q4 FY27. A second slurry pipeline is under preparation to support higher volumes.
Lloyds uses iron ore fines that would otherwise go unused and processes them for further use in steel operations, reducing wastage. The slurry pipeline helps move this material with lower handling losses, supporting more efficient use of resources.
The company is also planning to enter steelmaking from FY27. Overseas, Lloyds has begun work on a copper project in the Democratic Republic of Congo, with production expected to ramp up gradually.
In the past year, Lloyds Metals & Energy share price is up 4.2%.
Lloyds Metals & Energy 1-Year Share Price Chart
Valuation Check: Are These Stocks Overvalued or Hidden Gems?
Let’s now turn to the valuations of the companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick.
Valuations of Companies in focus
| Sr No | Company | EV/EBITDA Ratio | 3-Year Average EV/EBITDA | ROCE |
| 1 | Gravita India | 23.8 | 25.2 | 21.5% |
| 2 | MSTC | 8.1 | 9.9 | 29.3% |
| 3 | Lloyd Metals and Energy | 18.7 | 24.8 | 38.3% |
*Gem Enviro Management was recently listed so we used 1-year average EV/EBITDA for it.
The numbers are spread out. That is not surprising. These companies operate in different parts of the recycling ecosystem and are at different stages of growth.
Gravita India and Lloyds Metals trade at higher multiples. Both are still below their longer-term averages. Strong return ratios and visible expansion seem to be supporting these valuations. Lloyds, in particular, stands out on ROCE, which partly explains why the stock continues to command a premium.
MSTC sits at the lower end of the table. Both trade below their own historical averages despite healthy returns. This suggests the market is still cautious. Growth visibility and cyclicality remain concerns.
Overall, while return metrics are encouraging, investors need to consider how much of the circular economy opportunity is already reflected in current prices.
Conclusion
India’s circular economy story is still evolving. Regulations are getting tighter, but implementation remains uneven. Some parts of the system are formalising faster than others. As a result, not all companies linked to this theme will benefit in the same way.
The companies discussed here operate at different points in the recycling and waste chain. Their scale, execution capability and return profiles vary widely. This is already reflected in their valuations. In some cases, the market has priced in a large part of the expected growth.
The opportunity itself is long term. But outcomes will depend on execution and discipline. Investors should therefore look beyond the theme and focus on business fundamentals, balance sheets and valuation comfort before taking exposure.
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep dive into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
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