Recycling Stocks are Booming. Here are 10 Stocks to Track Now

The recycling sector in India is undergoing a transformation which includes both challenges and opportunities.

A staggering 960 million (m) tonnes of waste is generated annually in India. According to the Central Pollution Control Board's report, around 70% of solid waste is still disposed of in unregulated landfills which challenges the government.

Due to the growing issue, India has been actively developing policies and initiatives in the recycling sector.

The developmental policies such as the National Clean Air Programme (NCAP), Swachh Bharat Abhiyan, Solid Waste Management Rules, Smart Cities Mission, Extended Producer responsibility framework, etc reflect the country's commitment towards waste management and sustainable growth.

The current scenario provides ample opportunities for recycling sector companies to create job opportunities, promote sustainability, innovate recycling technologies, and mitigate waste generation.

In this article, we will present ten companies that are contributing to sustainability through their recycling, water conservation, waste management, and clean energy initiatives.

We will now explore the top 10 recycling industry stocks in detail.

#1 Eco Recycling

At the top of our list, we have Eco recycling (ECORECO)

According to a survey by NSWAI, the total e-waste in India accounts for 1,250,000 tonnes per annum. Due to technological advancements and an increase in adoption, there is a global problem of e-waste generation.

ECORECO is India's first and leading E-waste management company. The company offers data destruction, asset management, lamp recycling, skill development, and more.

It also ensures the implementation of responsible consumption and water conservation out of the 17 United Nations Sustainable Development Goals (UN SDGs) policies, as it operates in the recycling industry.

Let's have a look at its five-year financials.

Eco Recycling Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	12.40%	12.20%	12.60%	15.10%	17.70%
Net Profit Margin	10.50%	9.20%	34.40%	82.70%	34.70%
Return on Capital Employed (ROCE)	4.60%	5.10%	15.10%	29.70%	13%
Return on Equity (ROE)	6.20%	5.30%	18.10%	34.60%	13.50%

Data Source: Ace Equity

The financials and share performance indicate that the business has grown well. The 5-year CAGR growth rate for revenue and profit stand at 7.74% and 26.97%, respectively.

The company maintains zero-debt status which promises positive financial health for the company.

To keep up with the profitability, the company has partnered with CMET (a unit of MeitY) to recycle Li-ion batteries and extract valuable metals for new developments. This will reduce India's dependence on critical metal imports.

As technology continues to advance, we are bound to use more electronic devices.

Thus, ECORECO stands to benefit from managing e-waste and preventing hazardous substances from electronic components from entering the environment

#2 Gravita India

Second on the list is Gravita India.

Gravita was founded in 1996 and is famous for making and recycling lead metal, aluminium alloys, lead stuff, and plastic granules.

More than half of their sales comes from outside India, and they have a market presence across Europe, Asia, America, and Africa.

There is a rise in the adoption of lead-acid batteries in advanced vehicles like stop-start which is driving the demand for lead.

Thus, Gravita India specializes in lead manufacturing and recycling to meet the growing demand for lead.

Gravita India Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	-	8.50%	4.60%	57.30%	26.40%
Net Profit Margin	0.40%	2.20%	3.60%	6.20%	7.10%
ROCE	12.70%	16.50%	19.90%	31.10%	31.70%
ROE	10%	17.20%	23%	45.20%	41.80%

Data Source: Ace Equity

Gravita's revenue has grown over the last five years, at a CAGR of 22% while the company's net profit has grown at 36%.

The company's debt-equity ratio stands at 0.58 in FY23, indicating a strong capital structure with low debt in comparison to equity.

In 2023, Gravita entered a Memorandum of Understanding (MoU) intending to build a Rs 400 m battery recycling plant in Oman. Under this agreement, Gravita Netherlands will hold a 50% stake in the recycling project.

This move made by the company assures strategic expansion into new markets towards its commitment to implement sustainable recycling practices.

#3 Tinna Rubber and Infrastructure

Third on the list is Tinna Rubber and Infrastructure.

Tinna Rubber was founded in 1987 and is considered India's one of the oldest and top recycling companies.

The company makes products like Tinna Reclaim Rubber, Tinna Crumb Rubber, and special kinds of bitumen like Slow Setting Cationic Bitumen Emulsion, Industrial Bitumen, and Mastic Bitumen.

Tinna Rubber and Infrastructure Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	8.20%	3.23%	8.50%	13.80%	12.10%
Net Profit Margin	-0.10%	-3.10%	0.80%	7.30%	7.20%
ROCE	7.20%	3%	8.40%	23%	24.40%
ROE	-0.20%	-5.60%	1.60%	23.40%	25.10%

Data Source: Ace Equity

Tinna Rubber's revenue has grown at a CAGR of 24% in the last five years. While the net profit has grown in the last two years, the company was a loss-making company until 2021.

However, it does not have too much leverage on its balance sheet. The company's debt-to-equity ratio stands at 0.6x in FY23.

Going forward, the company has commissioned a new manufacturing unit in WADA, Maharashtra. The new facility will boost the capacity by 50% allowing Tinna Rubber to meet the market needs.

#4 Antony Waste

Fourth on the list is Antony Waste.

Antony Waste Handling Cell was established in 2001 and is evolving as an ESG-centric business which focuses on empowering India's circular economy.

The company has 17 years of experience in offering Municipal Solid Waste Management (MSW) services which include transportation, collection, processing, and disposal serving Indian municipalities.

Antony Waste Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	10.60%	16.60%	17.20%	23.90%	31.40%
Net Profit Margin	-	-22.80%	23%	26%	17.40%
ROCE	21.80%	24.40%	21.20%	24.50%	18%
ROE	65.10%	31.60%	22.40%	23.60%	18.70%

Data Source: Ace Equity

Antony Waste has grown at a healthy pace in the last five years. The company's revenue has grown at a CAGR of 25% while net profit has grown at 18%.

The company has a debt ratio of 0.72x in FY23 which indicates low debt.

To generate a consistent level of profit, the company in FY23 applied for and received the certification of quality management, environmental management etc. It also signed contracts from Nashik Municipal Corporation for collection and transportation.

Antony is committed to innovative technologies for efficient waste collection, transport, and recycling which contributes to sustainable waste management practices in India.

#5 Felix Industries

Fifth on this list is Felix Industries.

Felix Industries was incorporated in 2010 as an eco-tech startup with a focus on green technology.

The company uses Membrane Separation Technology for water and wastewater solutions.

Over time, the company has grown to handle both the initial treatment and final treatment of dirty water from the factories of steel, chemicals, and pharmaceuticals.

Have a look at its financials.

Felix Industries Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	3.80%	3.60%	5.80%	24.30%	38%
Net Profit Margin	-57.60%	-15.60%	-20.20%	6.70%	6%
ROCE	-10.80%	-6.40%	-5.70%	14.70%	12%
ROE	-13.90%	-3.90%	-8.60%	11.60%	14.20%

Data Source: Ace Equity

It can be assessed that the company's revenue has been growing rapidly, with an average growth rate of nearly 30% over the past five years. However, the net profit growth has been inconsistent.

The company also has a low debt to equity ratio of 0.52x as of FY23.

Nonetheless, the company has made improvements by taking measures through R&D activities to improve the efficiency, quality, waste reduction, and water management of its materials.

#6 A2Z Group

The sixth company is A2Z Group.

A2Z Group was incorporated in 2002. The company specialises in waste management as its main business segment. It also offers facility management services including housekeeping, security, hospitality, maintenance, and related services.

It is interesting to know that A2Z also provides facility management services to Indian Railways such as clean train station scheme (CTS), intensive rake cleaning, and high-pressure mechanized cleaning during train stopovers.

A2Z Group Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	28.80%	21.80%	10.60%	7.70%	3.90%
Net Profit Margin	6.33%	-75.50%	-44%	-126%	-131.50%
ROCE	15.30%	11.20%	11.10%	8.40%	-39.80%
ROE	8.40%	4.70%	5.80%	5%	-49.30%

Data Source: Ace Equity

The financials of the company depict that revenue and profit have shown a growth over the last five years.

The company has a low debt to equity ratio of 0.27x.

To reinstate its profitable position, the company has partnered with sugar mills to set up three power plants in Punjab on a Built, Own, Operate, and Transfer (BOOT) basis for 15 years.

However, there are issues such as non-supplies, delays in approvals, and disputes between the parties which might need to be resolved.

Other than that, the company shows sincere efforts in cleaning, maintenance, and waste management business.

#7 Nupur Recyclers

Seventh on the list is Nupur Recyclers.

Nupur Recyclers is a prominent player in metal scrap processing and recycling in India.

It focuses on non-ferrous metal scrap imports like shredded zinc scrap, zinc die-cast scrap, zurik scrap, and aluminium zorba grades.

Nupur recyclers also engage in trading and manufacturing of these metals emphasising sustainable practices.

Nupur Recyclers Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	-	-	14.10%	16.70%	13.80%
Net Profit Margin	-	-	9.60%	11.80%	9.40%
ROCE	0.50%	12.90%	157.20%	63.80%	19.80%
ROE	52.80%	87.20%	197.80%	50.20%	13.90%

Data Source: Ace Equity

The company in FY23 had no or negligible debt compared to its assets.

Nupur Recyclers is committed to growth and aims to innovate in the metal industry which expands into new markets like UAE, Central Europe, and the USA while exploring trading opportunities to complement its core activities.

Overall, the company aims to ensure the production of efficient and sustainable recycled products.

#8 Urban Enviro Waste Management

Eight on the list is Urban Enviro.

The company was founded in 2011 with the name 'Nagpur Waste Handling" which further rebranded in 2022 as 'Urban Enviro Waste Management'.

Urban Enviro's services include transportation, waste collection, segregation, and disposal services across India.

Additionally, it also develops innovative solutions for modern-day challenges in waste management through research and development.

Urban Enviro was listed in the markets in 2023. In the last three years, the company experienced a healthy revenue and profit growth of 46% and 41% respectively.

The debt-to-equity ratio stands at 4.8x which determines that the company currently holds a high level of debt.

Urban Enviro has partnered with various local bodies to oversee the management and reduction of waste, from collection to disposal.

They have a solid waste division which especially observes the locality disposal and waste management.

Overall, the company aims to implement the best practices in waste management.

#9 Ganesha Ecosphere

Ninth on this list is the Ganesha Ecosphere.

Ganesha Ecosphere is an India-based company which specializes in PET waste recycling.

Their diverse product portfolio includes recycled polyester stable fibre (RPSF), polypropylene staple fibre, recycled bottle and filament grade chips, recycled spurn yarn, and dyed texturised yarn.

Ganesha Ecosphere's manufacturing unit has a presence in Uttar Pradesh and Uttarakhand with a total installed capacity of 106,800 tons per annum for various products.

Ganesha Ecosphere Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	13%	13.40%	12.70%	12.60%	12.30%
Net Profit Margin	6%	7.10%	6%	6.80%	6.40%
ROCE	-	15.90%	11%	11.70%	10.70%
ROE	-	13.30%	8.70%	11.30%	11.40%

Data Source: Ace Equity

The sales and net profit of the company have grown at a CAGR of 10% in the last three years. However, net profit has grown at only 3%.

The company also has a debt to equity ratio of 0.79x.

Ganesha Ecosphere in FY22 invested Rs 2.3 billion (bn) in setting up a spinning mill project at Rampur, Uttar Pradesh. This project aimed to engage in the recycling of PET plastic bottle waste to create polyester spun yarn.

The company's services and products are used in various manufacturing processes such as for functional textiles, geotextiles, fillings etc.

#10 Pondy Oxides & Chemicals

The last on the list is POCL.

Pondy Oxides & Chemicals (POCL) is India's leading plastic and lead alloy producer.

The company operates with a focus on recycling and sustainable practices in its manufacturing process.

POCL implements robust waste management practices to responsibly handle by-products and waste materials generated during production. This includes proper disposal methods and recycling initiatives for recyclable materials.

Pondy Oxides Financial Snapshot (2019-2023)

Stock/Index	FY19	FY20	FY21	FY22	FY23
Revenue Growth	1%	2%	2.80%	2.30%	3.30%
Net Profit Margin	-1.40%	-0.40%	0.50%	0.60%	1.40%
ROCE	24.50%	13.20%	7.40%	23.40%	20.80%
ROE	29.40%	11.60%	6.90%	26.10%	21.20%

Data Source: Ace Equity

POCL has entered into a partnership, by signing a US$ 12 million equipment supply and licensing deal with Ace Green Recycling which is a global leader in battery recycling technology.

Conclusion

The recycling industry is driven by the urgent need to develop solutions for water, plastic, metal, and technology waste.

Here are some reasons to feel optimistic about recycling stocks:

First, an increase in global awareness and regulatory push towards sustainability is generating high demand for companies specialised in recycling and waste management.

Second, the strategic collaborations and partnerships with global leaders in sustainability depicts new market opportunities.

Finally, technological advancements in recycling processes and clean energy solutions have made the work of the recycling industry more efficient, cost-effective, and environmentally friendly.

Therefore, investors are looking to invest in such companies to demonstrate their commitment to growth, sustainability, and efficiency which drives profitability.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...