5 Best Recycling Stocks in India to Add to Your Watchlist

India's recycling industry is at an inflection point. Rising consumption, growing waste volumes and dependence on imported raw materials are driving the need for sustainable solutions.

Policy initiatives such as Extended Producer Responsibility (EPR), stricter waste management rules and incentives for circular economy practices have accelerated the sector's formalisation.

Recycling today is far more than just waste management. It is about extracting value from discarded resources, whether metals, plastics, municipal waste or wastewater.

Demand for secondary materials is gaining momentum as industries look to cut costs, reduce environmental impact and secure reliable supplies.

At the same time, investments in new technologies, energy recovery and capacity expansion are reshaping the scale and efficiency of the industry.

For investors, the sector represents a structural theme backed by regulation, consumption trends and sustainability goals. Companies operating here are scaling up, improving margins and positioning themselves for long-term relevance in a resource-constrained world.

Here are five such stocks, picked from Equitymaster stock screener.

#1 Gravita India

First on our list is Gravita India.

Gravita India is a leading global recycler with operations across lead, aluminium, plastic and rubber. The company has steadily built capacity and customer relationships, supplying more than 70 markets worldwide. Its integrated model and strong procurement network have created meaningful entry barriers in a sector that is formalising rapidly.

In FY25, Gravita's sales grew 22% year-on-year, driven by 20% higher volumes and a greater share of value-added products, which formed 46% of sales. EBITDA margins were steady at 10.4% as sourcing efficiencies, higher domestic scrap availability under EPR rules and a richer product mix offset cost pressures.

In Q1FY26, sales rose 15% while EBITDA margins improved to 10.7%, supported by a larger contribution from value-added products and tighter cost control.

Looking ahead, Gravita has outlined a capex plan through FY28 to raise overall capacity above 7,00,000 tonnes annually. Most of this will be directed towards existing businesses, with the rest earmarked for diversification into lithium-ion, paper, rubber and steel recycling. The programme will be funded through internal accruals and proceeds from a recent QIP, leaving the balance sheet net debt-free.

The stock trades at about 34 times earnings, compared to its long-term median of around 21, suggesting the market is already pricing in strong growth and diversification prospects.

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

#2 Ganesha Ecosphere

Next on the list is Ganesha Ecosphere.

Ganesha Ecosphere is one of the largest recyclers of PET bottles in India, converting post-consumer plastic into polyester staple fibre, yarns and rPET granules. The company has built its business over three decades and now serves a wide customer base in India and overseas. Its integrated operations and product diversification have positioned it strongly within the circular economy theme.

In FY25, sales grew at a steady pace, supported by higher recycling volumes. However, profitability came under pressure as EBITDA margins slipped from 14.2% in Q1FY25 to 10.8% in Q1FY26. The decline was largely due to an unprecedented surge in PET bottle scrap prices, which touched Rs 55-56 per kg in April and May. Weaker demand in spinning and non-woven textiles, coupled with cheaper imports, restricted the company's ability to fully pass on higher costs. Lower capacity utilisation in the core business further weighed on margins.

Management expects performance to improve going forward as raw material prices have now cooled to Rs 41-44 per kg and order inflows have strengthened with the onset of the festive season. A brownfield expansion of 22,500 tonnes at Warangal is progressing as planned, and new export orders from Europe have added to visibility. The recent promoter equity infusion has reinforced the company's balance sheet and highlighted the commitment to growth.

The stock is currently trading at about 35 times earnings, which is above its 5-year median of 30.

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

#3 Pondy Oxides and Chemicals

Third on our list is Pondy Oxides and Chemicals.

Pondy Oxides and Chemicals is among India's leading non-ferrous metal recyclers with a diversified portfolio spanning lead, copper, aluminium, and plastics. Over nearly three decades, the company has built scale, a strong customer base, and global reach across more than 20 export destinations. Its focus on sustainability and circular manufacturing has positioned it as a key player in the recycling-led value chain.

In FY25, the company recorded healthy sales growth of 33% while EBITDA margins stood at 5.3%. The modest margin profile was shaped by elevated input costs and a heavier mix of base products, though value-added alloys and granules continued to provide resilience. In Q1FY26, performance improved sharply with revenue rising 36% year-on-year and EBITDA up 82%, aided by higher lead and copper volumes and better realisations. Commissioning of the first phase of its new lead smelting capacity added momentum.

Looking ahead, the company is pursuing an expansion plan that will lift lead capacity from 132,000 tonnes to 204,000 tonnes in two phases. Alongside, it is investing in plastics and copper recycling while evaluating new areas such as lithium-ion battery and e-waste recovery. Capex of around Rs 500 m is budgeted for FY26, funded through internal accruals and a recently completed QIP that raised Rs 1,750 m.

The stock trades at about 45 times earnings, well above its 5-year median of 12.6.

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

#4 Antony Waste Handling Cell

Fourth on our list is Antony Waste Handling Cell.

Antony Waste Handling Cell is one of India's leading players in the municipal solid waste management industry. The company has built a strong presence across collection, transportation, processing and waste-to-energy projects, with integrated operations that emphasise sustainability and long-term contracts with municipal corporations.

In Q1 FY26, revenue grew 13% year-on-year, supported by steady tonnage growth in collection and transportation and higher contributions from the processing division. EBITDA margins stood at 24%, broadly stable, aided by better operating leverage in the waste-to-energy plant and higher sales of resource recovery products such as compost and refuse-derived fuel. The margin performance reflects the company's integrated approach and disciplined bidding strategy, despite seasonal softness in construction waste volumes.

Looking ahead, Antony Waste is focusing on expanding its processing footprint and scaling the waste-to-energy business, with tenders already under evaluation. The management has guided for maintaining margins around current levels until larger projects begin contributing. Capex will be directed towards expanding processing facilities and new projects, with funding through internal accruals and a comfortable balance sheet position, reflected in a net debt-to-equity ratio of 0.4 times.

At current levels, the stock trades at about 23 times earnings, a premium to its long-term median of 19.

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

#5 EMS Limited

Last on our list is EMS Limited.

EMS Limited is an engineering and infrastructure company focused on water supply, wastewater treatment, sewerage networks and allied civil works. Over the years, it has built strong execution capabilities and a robust order book, with most projects funded by government agencies and multilaterals. This funding structure ensures payment security and keeps receivables manageable.

In FY25, the company delivered revenue growth of nearly 31% while EBITDA margins stood at about 26%. The margin profile reflects its disciplined bidding strategy and high exposure to water and wastewater projects, which typically offer better profitability compared to other civil works. In Q1FY26, revenue grew 3.7% year-on-year but was impacted by the early onset of monsoons that delayed underground execution. Margins in the quarter remained healthy around 23%, supported by steady progress in overground works and strong execution in sewage and water treatment plants.

Looking ahead, EMS has guided for 25% revenue growth for FY26 with EBITDA margins expected to remain broadly stable. The current order book stands around Rs 25 bn with a strong pipeline of bids worth Rs 40 bn. Management expects to secure additional wins in the second half as execution ramps up post-monsoons. The company continues to focus on water and wastewater as its core sector, while selectively bidding in electrical and building projects for eligibility and diversification.

At current levels, the stock trades at about 16.5 times earnings.

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

Conclusion

The recycling story in India is still in its early stages, but the drivers are powerful. Rapid urbanisation, climate goals and resource scarcity ensure that demand for recycling solutions will only deepen over time. With policy support and increasing consumer awareness, the industry is moving from fragmented, unorganised operations to larger, more efficient enterprises.

Even in a market where valuations across sectors are stretched, recycling stands out as an under-owned structural theme.

For investors, the key is to focus on businesses with strong execution, sustainable practices and efficient capital allocation. These are the qualities that can help recycling leaders ride the sustainability wave and create lasting value in the years ahead.

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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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