5 Stocks to Benefit as Govt Allocates Rs 10 Bn for Rare Earth Magnet Production

#1 Samvardhana Motherson

First on our list is the Samvardhana Motherson.

Samvardhana Motherson International is one of India's most globalised auto component makers.

Its products span wiring harnesses, polymer modules, vision systems, electronics, and integrated assemblies. The company serves nearly every major auto OEM worldwide.

The company is building a future-ready platform across high-tech manufacturing, with rapid strides into aerospace, consumer electronics and semiconductor equipment. That's where rare earth magnets come into play.

These magnets, especially those made from neodymium, are essential for electric motors, sensors, camera systems and precision assemblies.

The company is deepening its footprint in EVs, vision systems, PCB assemblies and semiconductor components. So, securing cost-effective access to rare earth magnets is critical.

In FY25, Samvardhana Motherson clocked record consolidated revenue of Rs 1,136.6 bn, up 15% year-on-year (YoY). EBITDA stood at Rs 108.8 bn and net profit rose 40% YoY to Rs 38 bn.

The booked business, which indicates future revenue visibility, was US$ 88.1 bn, or nearly Rs 7.4 tn, including US$ 2.7 bn from non-auto verticals like aerospace and consumer electronics.

Capex in FY25 was Rs 44.3 bn and guidance for FY26 stands at Rs 60 bn, split evenly between regular and growth capex.

About 70% of the company's new growth investments are focused on non-automotive sectors.

A stable supply of domestically produced rare earth magnets could unlock further efficiencies and cost savings for these high-growth verticals.

To know more about the company, check out its financial factsheet and latest quarterly results.

#2 Hindustan Zinc

Next on our list is Hindustan Zinc.

Hindustan Zinc Ltd (HZL) is India's leading zinc-lead producer and a heavyweight in the global metal space. Beyond its core business, the company is making a subtle shift into critical minerals.

This includes germanium, a metal with growing relevance in solar, semiconductors, and defence.

Germanium, recovered during zinc smelting, is now a commercial stream for Hindustan Zinc. That opens up a path for the company to tap into the broader critical minerals opportunity.

For FY25, the company has guided to a production range of 1,075-1,100 kt of mined metal and 1,050-1,075 kt of refined metal.

Silver volumes are projected to rise to 800-825 tonnes, maintaining its position as India's top silver producer. Cost of production is expected to be between US$ 1,125-1,175 per tonne.

Capex is pegged at around Rs 35 bn for the year, aimed at expanding capacity, improving efficiencies and driving decarbonisation efforts. The company remains debt-free and cash-rich, with strong internal accruals funding its entire investment pipeline.

While Hindustan Zinc isn't directly in the rare earth business, its capability to extract and scale germanium could prove valuable. High-purity recovery, refining know-how and global-standard ESG practices already give it an edge.

To know more about the company, check out its financial factsheet and latest quarterly results.

#3 Vedanta

Third on our list is Vedanta.

Vedanta is now positioning itself as India's gateway to the global critical minerals race. Its sprawling portfolio spans zinc, aluminium, copper, oil and gas, iron ore, power, and more.

With the government's spotlight on rare earths and strategic tech metals, Vedanta's ambitions in the critical minerals space are beginning to take shape. Rare earths might not be a major revenue stream yet, but they're firmly part of Vedanta's plans.

Through its zinc and aluminium operations, the company has exposure to monazite-bearing deposits which are key for neodymium extraction.

Vedanta's deep mining know-how, combined with existing state partnerships, makes it a serious contender in any future rare earth strategy.

In FY25, Vedanta posted record revenue of Rs 1,507.3 bn and its second-highest EBITDA at Rs 435.4 bn, driven by strong volumes and a drop in input costs.

Net profit surged to Rs 205.4 bn, up 172% YoY, aided by operating leverage and debt control. Net debt stood at Rs 532.5 bn, with a liquidity cushion of over Rs 206 bn. The company also executed Rs 1.2 bn in group-level deleveraging across Vedanta and its parent.

Capex remains aggressive as Rs 124 bn was spent in FY25 as part of its US$ 9.5 bn investment plan, of which US$ 4 bn will be deployed over the next three years.

Zinc and aluminium saw capacity additions, with debottlenecking and new value-added lines on track. For FY26, the company expects volume tailwinds and cost efficiencies to protect margins despite global metal price volatility.

To know more about the company, check out its financial factsheet and latest quarterly results.

#4 NMDC

Fourth on our list is NMDC.

India's largest iron ore producer, NMDC, is aligning itself with a larger national ambition, to secure self-reliance in critical minerals and deepening its footprint in high-value materials.

The company already dominates India's iron ore scene, supplying to steelmakers and infrastructure projects. In FY25, NMDC produced 441 million tonnes and sold 444 million tonnes of ore.

Revenue hit Rs 236.7 bn, while EBITDA came in at Rs 98.5 bn, up 13% YoY. Net profit rose 19% YoY to Rs 66.9 bn, its second-best financial performance ever. That was on the back of better realisations (Rs 5,135/tonne average) and more efficient operations.

But NMDC's ambitions go beyond iron ore. Through subsidiaries like Legacy Iron Ore in Australia and the JV with ICVL in Mozambique, NMDC has been quietly building a global minerals portfolio.

Rare earths aren't yet part of its direct operations. However, its mining scale, government ownership and geological reach make it a natural candidate to participate in India's rare earth magnet mission. Moreso if it is linked with downstream collaborations or tech tie-ups.

The company is also investing in value-addition and is setting up steel plants, pellet units and slurry pipelines to improve margins and logistics.

With zero debt, a cash-rich balance sheet and government backing, NMDC could be a pivot point in India's critical minerals value chain if it chooses to play aggressively.

To know more about the company, check out its financial factsheet and latest quarterly results.

#5 GMDC

Last on the list is GMDC.

GMDC has long been known as Gujarat's lignite champion. But the state-run miner is slowly shifting gears from a traditional coal and bauxite producer to a forward-looking critical minerals player.

In FY25, GMDC clocked revenue of Rs 30.5 bn, EBITDA of Rs 10.7 bn and PAT of Rs 6.4 bn. The company maintained a 35% EBITDA margin and declared Rs 4.75 per share in dividends.

A zero-debt balance sheet and cash reserves of Rs 21 bn gives it firepower for future investments.

GMDC has set up a dedicated critical minerals division, marking its intent to play a key role in India's rare earth and energy transition strategy. Projects are underway to explore lithium, rare earths, copper, and phosphate, both independently and in partnership with PSUs like MECL, NALCO and GSI.

A JV with NALCO for rare earths and bauxite in Gujarat has been signed, while a MoU with the Ministry of Mines targets collaborative exploration.

The company has planned investments of Rs 14.5 bn over the next two years, with Rs 6 bn allocated for FY26. The funds are for critical mineral projects, new mineral blocks, and backward integration.

It has already bagged six commercial mining projects across coal and base metals.

In an ecosystem where India is racing to build rare earth magnet capacity, GMDC's early moves could pay off. Its access to Gujarat's rich mineral belts, coupled with a clean balance sheet and state backing, make it one of the more quietly strategic plays in this space.

To know more about the company, check out its financial factsheet and latest quarterly results.

Conclusion

India's push to build a rare earth magnet ecosystem marks a turning point in the country's technological and strategic ambitions.

For investors, this opens a window into a fast-evolving opportunity tied to high-tech manufacturing, energy transition, and supply chain security.

The key lies in identifying businesses aligned with critical mineral development, refined materials and end-use applications across sectors like EVs, electronics, and defence.

Still, it's essential to track execution, policy clarity and how quickly these projects translate into revenue and profits. This is a sector where informed investing could make all the difference.

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