India’s mining revival: Five small-cap stocks to watch in 2026
Building on this momentum, the government has intensified efforts to deepen domestic exploration and accelerate the auctioning of new mines. Initiatives such as the National Mineral Exploration Trust are drawing greater private participation, helping unlock reserves that have remained underexplored for decades.
At the same time, India’s industrial priorities are shifting. The rapid expansion of renewable energy, electric vehicles, and advanced manufacturing is fuelling demand for metals like copper, zinc, lithium, and rare earth elements – areas where domestic miners are starting to position themselves strategically. The National Critical Mineral Mission, aimed at reducing India’s reliance on China, underscores the strategic importance of this transition.
For investors, this marks a potential inflection point, one that could redefine how India sources and processes its mineral wealth.
Against this backdrop, here are five small-cap mining companies well placed to benefit from India’s growing appetite for critical and industrial minerals.
Sarda Energy and Minerals
Sarda Energy and Minerals, promoted by the Sarda Group, operates as a vertically integrated steel producer backed by captive iron ore and coal mining assets. It also produces and exports manganese-based ferro alloys, supported by self-sufficient power generation through captive waste heat and coal-based plants.
The company is expanding aggressively across mining and energy. Alongside its hydropower projects, it has forayed into the power sector by acquiring SKS Power. Over the next two to three years, Sarda plans to invest ₹5-10 billion across sectors, funded by surplus cash, after reporting a cash profit of ₹642 billion in Q1FY26.
Its expansion drive is well underway: coal washery capacity was doubled from 0.96 MTPA to 1.8 MTPA in May 2025, and approvals are awaited to expand coal mining from 1.68 MTPA to 1.8 MTPA, with long-term plans to take the Gare Palma mine beyond 3 MTPA. It’s also developing the Shahpur West and Bartunga Hill mines—Shahpur is expected to begin production before FY27, while Bartunga awaits forest land clearance.
Sarda also operates a coal mine in Indonesia and plans to ramp up capacity to 1 MTPA.
Financially, Q1FY26 revenue jumped 76% YoY to ₹16.3 billion, while net profit surged 118% to ₹4.3 billion on stronger volumes and margins (40.7%). The company expects further gains from full-year power operations, higher coal output, and three new projects coming online in FY26.
Ashapura Minechem
Ashapura Minechem’s core business spans mining, manufacturing, and trading of minerals such as bauxite, bentonite, kaolin, bleaching clay, silica, and iron ore. In FY25, bentonite accounted for 45.2% of revenue, followed by bleaching clay (28.3%), bauxite (7.3%), and calcined China clay (7.9%).
The company’s international operations in Guinea are central to its growth. It holds vast reserves—700 MMT of bauxite and 300 MMT of iron ore—which together contribute over 70% of its revenue and profit. With global aluminium consumption rising 5-6% annually, demand for bauxite is set to remain robust.
Ashapura has invested $135 million in its Guinea operations, with most of the capital expenditure already complete. The company aims to boost bauxite exports from 3.4 MMT currently to 15 MMT by FY28. Its Guinea iron ore project is also nearing production.
In India, Ashapura focuses on value-added mineral products exported to over 80 countries. The company operates three captive ports in Guinea, most notably the newly commissioned ABB Bofa port, and plans to expand total port capacity to 16 MMT by Q1FY27.
Q1FY26 revenue rose 90% YoY to ₹13.6 billion, driven by Guinea operations, while net profit nearly doubled to ₹1.1 billion.
GMDC
Gujarat Mineral Development Corp. (GMDC) is India’s leading merchant lignite seller and the second-largest producer of the mineral. Known for powering Gujarat’s energy needs, the company is now reinventing itself as a multi-mineral enterprise under “Project Shikhar,” which targets fourfold revenue growth to ₹145 billion by 2030.
The plan involves ₹134 billion in investments over five years, spanning new lignite, coal, copper, and rare earth projects. Six new lignite mines in Kutch and South Gujarat, adding 483 MMT in reserves, are expected to start contributing by FY27, helping GMDC achieve 15 MTPA of lignite output by decade’s end.
GMDC has diversified into coal mining in Odisha with three major mines – Baitarani, Burapahar, and Kudanali-Lubari – holding 2,000 MMT of reserves. Baitarani West alone holds over 1,000 MMT and a peak capacity of 15 MTPA, with operations expected to commence in FY26.
The company’s copper project at Ambaji holds 7.3 MMT of multi-metal reserves, among the richest globally, with revenue expected by FY30-end. GMDC is also monetizing 2.5 billion tonnes of limestone in Kutch, signing a 40-year supply deal with JK Cement under Phase I. Its 11 bauxite mines with 27.5 MMT of reserves have drawn interest from major cement players.
In rare earths, GMDC is developing one of the world’s largest deposits at Ambadungar, Gujarat, with the government tripling investment in rare earth development to ₹50 billion. The company recently allocated ₹30–40 billion for critical mineral and non-lignite projects.
While Q1FY26 results were muted – revenue fell 10.4% YoY to ₹7.3 billion and net profit declined 10.9% to ₹1.6 billion – GMDC expects 10-15% volume growth in lignite this year.
Sandur Manganese
Sandur Manganese and Iron Ores Ltd operates across manganese, ferroalloys, coke, power, and specialty steel. Its mainstay is iron ore mining (4.4 MTPA), followed by manganese ore and value-added metallurgical products.
With all mine expansions becoming operational from FY26, Sandur expects higher production in both iron ore and manganese. The coke and energy segment, hit by price volatility, has been stabilized through a new conversion agreement covering 46% of annual capacity, ensuring steady production and mitigating risk.
Ancillary businesses, including ferroalloys, are seeing a revival supported by a 12% safeguard duty on steel. The acquisition of Arjas Steel has also marked Sandur’s entry into specialty steel, where a new Garrett coiler at its Tadipatri plant will expand the product mix and boost growth from FY26.
Q1FY26 revenue rose 84% YoY to ₹11.5 billion, while net profit grew 16% to ₹1.6 billion, driven by higher mining output and steel integration.
MOIL
MOIL Ltd is India’s largest manganese ore producer, accounting for over 52% of domestic output. It operates 10 mines, seven underground and three open-cast, across Maharashtra and Madhya Pradesh.
MOIL aims to ramp up production to 3.5 MMT by 2030, increasing its market share from 21% to 32%. Of this, 3 MMT will come from existing operations, with 0.5 MMT from new projects. Environmental clearance limits will rise from 2.4 MMT to 5 MMT to support this capacity.
The company is developing five new shafts and expanding through JVs and MoUs. Exploration at Gujarat’s Pani Project has yielded 9.51 MMT in resources, with additional discoveries at Bhudkum and Selva blocks. MOIL is also India’s sole producer of electrolytic manganese dioxide (EMD), used in batteries and pharmaceuticals, with a 1,500 MTPA capacity.
Financially, performance weakened in Q1FY26 – revenue fell 29.4% year-on-year to ₹3.5 billion, and net profit dropped 65.7% to ₹510 million as margins contracted.
Should you consider mining stocks?
India’s mining industry is entering a new cycle of growth, underpinned by policy reforms, a critical minerals push, and surging industrial demand. Companies like Sarda, Ashapura, GMDC, Sandur, and MOIL are expanding capacities and diversifying portfolios, positioning themselves for long-term upside as exploration deepens.
However, investors should look beyond the hype. A sound assessment of each company’s fundamentals – financial strength, governance, and project execution – is key before placing any bets on India’s mining resurgence.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com