Whalesbook
B&K Securities has initiated coverage on key players in India's recycling sector, signaling a bullish outlook driven by significant structural tailwinds. The brokerage favors Gravita India and Ganesha Ecosphere, assigning them 'Buy' ratings. Pondy Oxides & Chemicals and Jain Resource Recycling received 'Hold' ratings. This optimism stems from an ongoing transformation within the recycling ecosystem.
Regulatory Shift Fuels Organized Growth
India's recycling industry is pivoting from fragmented, unorganized operations to more structured, compliant entities. Environmental regulations are tightening, compelling players to adhere to standards. This shift has reduced the unorganized sector's share in non-ferrous metal recycling from 80% in FY16 to 60% currently, with organized players now capturing 40%. This trend is expected to accelerate, with organized players potentially holding 65% market share by FY30.
This formalization is supported by mandates like the Plastic Waste Management Rules (PWMR), anticipated from FY26. Continuous regulatory scrutiny bolsters this shift. Large manufacturers and global brands are increasingly seeking reliable, scalable recycling partners. They favor companies with backward integration, dedicated scrap yards, and robust collection networks. Investments in advanced technologies, including lithium-ion battery recycling, further distinguish leading firms.
Strong Growth Projections for Key Players
B&K Securities forecasts robust volume growth for its top picks. Global lead recycling is expected to grow at 3.7% CAGR, with India at 6.4%. However, Gravita India, Pondy Oxides, and Jain Resource Recycling are projected to achieve significantly higher CAGRs of 19.8%, 18%, and 13.0%, respectively, over FY25-28.
This outperformance is attributed to regulatory drivers like Extended Producer Responsibility (EPR) and Battery Waste Management Rules (BWMR), alongside increased domestic scrap availability and evolving customer preferences for scalable, reliable recyclers.
In copper recycling, India's demand is set to grow 7.2% annually, with recycling volumes projected at a 13.2% CAGR (FY25-30). Jain Resource Recycling and Pondy Oxides & Chemicals are expected to see substantial copper-recycling volume CAGRs of 14.5% and 170.2%, respectively, driven by product upgrades and capacity expansion.
Plastics Recycling Driven by rPET Demand
The plastics segment, particularly Polyethylene Terephthalate (PET), shows strong growth potential. PET recycling volumes are forecast to expand at a 22.7% CAGR (FY25-28).
Mandatory recycled content rules under PWMR, requiring 30% recycled PET from FY26, are a key driver. Ganesha Ecosphere's subsidiary is poised for accelerated growth, with an estimated volume CAGR of 38.3% (FY25-28). As one of India's largest and oldest approved manufacturers of food-grade rPET granules, the company is well-positioned in a supply-constrained market where only FSSAI-approved recyclers can produce these critical materials.