Everyone Knows About Coal India, GMDC, and NMDC. But Here are 4 Rare Earth Stocks Flying Under the Radar

India's production of critical minerals in 2024 stood at 2,900 metric tons. In fact, the volume has remained unchanged for the past few years. The country's output represents less than 1% of global rare earths supply.

India's rare earths production is far below its potential, considering the nation holds almost 35% of the world's total beach sand mineral deposits, which are significant sources of rare earths.

Nevertheless, the government is establishing research and development into new technologies for extracting and processing rare earth minerals. This suggests that stocks involved in the rare earth metals industry are set for a massive growth trajectory.

While most investors focus on Coal India, NMDC and GMDC, there are a few under the radar and small players contributing to India's rare earth industry in a big way.

Let's look at a few such stocks in this editorial.

#1 Owais Metal

Incorporated in 2022, Owais Metal and Mineral manufactures and processes metals and minerals.

The company is engaged in the business of manufacturing and processing metals and minerals such as MNO, MC manganese, manganese ore, wood charcoal, quartz and quartz slabs, and recycling of rare earth minerals.

It has developed in-house technology to recycle rare earth mineral waste, enabling extraction of critical metals like tantalum, tin, niobium, from industrial slag-at a purity of 99.9%.

With a capacity of 100 kg per day and estimated annual revenues of nearly Rs 580 million (m) at profit margins of 36-40%, this company is an example of turning crisis into innovation. The client base ranges from EVs to defence to medical tech.

The management wants to position the company as a pioneer in the metal and mineral industry, leveraging advanced technologies to be a part of the waste-to-wealth ecosystem.

Owais Metal also plans to enhance production capabilities in manganese, gold, and rare earth elements, with aspirations to become a global leader in quartz and charcoal markets.

#2 Permanent Magnets

Next on the list is Permanent Magnets.

Permanent Magnets is a Taparia Group company, and a solution provider of electrical components and assemblies based on technologies such as current and speed sensing, magnetic shielding, and magnetic assemblies.

It's a company that makes magnets and magnetic assemblies for electricity meters, autos and industrial equipment.

In 2025, Permanent Magnets indicated plans to build a full rare earth magnet manufacturing and supply chain in India. It's still early days, but if they succeed, it could be a game-changer for the company.

Coming to its financials, its FY25 revenue grew a modest 2% YoY to Rs 2.1 bn, due to a challenging operating environment.

EBITDA margins for the year came in at 15% compared to 17% last year, due to higher operating and developmental expenses and certain one-off charges.

Going forward for FY26, the management has guided for around 20% revenue growth but cautioned about lumpiness due to the nature of large project wins.

It also said that margins are expected to remain at current 14-15% levels unless high-margin EV business rebounds or quantum magnetics scales up.

The company is eyeing export opportunities in smart meters while its alloy business is also expected to pick up if new the furnace ramps up quickly.

#3 Sterling Tools

Next up we have Sterling Tools.

The company is known for making fasteners for the auto sector-nuts and bolts that keep the industry together.

Through its subsidiary, Sterling Gtake E-Mobility, it has entered the EV motor control space.

It has a partnership with a UK-based company, Advanced Electric Machines, to develop rare earth-free motors in India. This is a potential first-mover advantage in a new category.

Coming to its financial performance, the company has delivered a top-line growth of 26% CAGR over 3 years and a net profit CAGR of 33%. The last 3 years average ROE has been 12%.

Looking ahead, the company's fasteners business is projected to maintain a stable growth trajectory, driven by new customer additions and deeper market penetration.

It has already begun to see early traction from newly acquired customers, including Hyundai, which is expected to support incremental growth in the coming quarters.

The company has planned a total investment of between Rs 1.5-2 bn in the next 3 years across its different non-fastener businesses.

#4 Eco Recycling

Last on the list is Eco Recycling.

You may be wondering how Eco Recycling is involved in the rare-earths industry.

Well, the story of rare earths doesn't stop at mining and extraction. As electronics pile up, so does the treasure hidden within them - metals like cobalt, nickel, and manganese, all of which are critical to modern technology.

Enter recycling firm Eco Recycling, one of India's earliest players in the e-waste space.

Traditionally, the black mass was exported for metal recovery. Now, Eco Recycling is working on doing this in India. As per its management, there are at least 17 valuable metals that can be recovered from e-waste-and the company is building the tech to do it.

Eco Recycling offers end-to-end solutions of reverse logistics, data destruction, information technology asset disposition (ITAD), recycling of E-waste, lamp recycling, precious metal recovery, recycling on wheels-SmartER. The company has a recycling capacity of 31,200 MTPA.

The company also has an upcoming 6,000 MTPA capacity in 2025, dedicated to Li-ion battery recycling through a partnership with C-MET.

The company has a PAN-India logistics network and a global footprint spanning over 120 countries through exports, logistics, and strategic partnerships.

Coming to the financials, the company's revenue has grown at a CAGR of 17.6% in the last five years, while its net profit has grown at a CAGR of 75.3%.

The 5-year average return on equity (RoE) is 17.1%, and return on capital employed (RoCE) is 18.4%.

It remains to be seen how Eco-Recycling caters to the evolving rare earths industry.

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.

Aim to find businesses aligned with critical mineral development, refined materials, and end-use applications across sectors like EVs, electronics, and defence.

However, 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 the difference between profits and losses.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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