Refex Industries Limited

Refex Industries reported a challenging Q1 FY26, with standalone revenue reaching INR 365.9 crores, a decline both quarter-on-quarter and year-on-year. This was primarily attributed to an unusually early and intense monsoon in May and June 2025, which severely impacted cash handling, logistics, and subdued demand for cement. Despite these headwinds, the company managed to maintain healthy margins, with standalone EBITDA at INR 39.7 crores and standalone PAT at INR 33 crores, reflecting an 8.7% margin. Consolidated total income stood at INR 394.5 crores, with consolidated PAT at INR 20.4 crores, also at an 8.7% margin.

The ash and coal handling business remained the company's core, contributing 95% of Q1 revenues. This segment experienced a seasonal revenue dip of INR 246 crores quarter-on-quarter due to monsoon effects, but maintained a healthy margin of approximately 11.77%. Management expressed confidence in a post-monsoon recovery, projecting daily movement volumes to increase from 70,000 tons to 90,000 tons by year-end. Refex is the largest organized player in this market, operating in 41-42 thermal power plants across 15 states, and anticipates an 8% CAGR, with plans to add about 2 new thermal power plants per month.

The Green Mobility segment demonstrated growth, with Q1 revenue increasing by 12% quarter-on-quarter to INR 17.24 crores. However, the segment currently faces significant profitability challenges, operating at a negative 50% margin. This unprofitability is attributed to the time lag (6-9 months) between vehicle acquisition and full utilization. The company has rebranded to Refex Mobility and appointed a new CEO to drive growth, targeting EBITDA profitability by the end of this year and PAT profitability by next year, with a goal of reaching 8,000 to 10,000 vehicles over the next two years.

Refex's wind business is poised for growth, with management expecting it to turn profitable this year. The company has raised its first invoice in Q1 and is preparing its Silvassa facility for operations by the end of Q2. Refex is uniquely positioned as the only company in India manufacturing 5.3 megawatt wind turbines, utilizing permanent magnet technology for higher efficiency. While current assembly-level EBITDA margins are 1-10%, the company projects 15-16% EBITDA margins after two years of full manufacturing, with an ambitious target of 3 gigawatts of manufacturing capacity by the end of next year.

The power trading vertical experienced very low volumes and revenues, operating at negative margins. Consequently, management has decided to wind down its operations by the end of Q2, expecting this move to improve overall profit percentages. The refrigerant gas business, Refex's oldest segment, contributed 0.9% to margins but saw a significant 40% quarter-on-quarter revenue decline of INR 5 crores. Management indicated a minimal focus on this segment, suggesting a continued decline in its contribution.

The company demonstrated a commitment to shareholder returns by declaring a dividend of INR 0.50 per share, representing 25% of the face value. Financially, Refex maintains a healthy balance sheet, reporting INR 237 crores in cash in hand. Management explicitly stated that the company has no debt other than working capital and vehicle loans, indicating a conservative approach to leverage and strong liquidity for its operational and growth initiatives.