Detailed Narrative
Q3 FY26 Financial Performance Overview
Refex Industries reported a strong sequential recovery in Q3 FY26, with revenue increasing by 38% QoQ to ₹583 Crores. Total income for the quarter stood at ₹590 Crores, up from ₹431 Crores in Q2 FY26. Profit before tax (PBT) grew by 24% QoQ to ₹89 Crores, and profit after tax (PAT) increased by 29% QoQ to ₹67 Crores. The EBITDA margin for the quarter was 16.1%, a significant improvement from 7.52% in Q3 FY25, though slightly down from 17.42% in Q2 FY26. (Note: The transcript states revenue increased by ₹160 Crores from ₹123 Crores in Q2 to ₹583 Crores in Q3, representing 38% sequential growth. This contains internal inconsistencies; the 38% growth is used as stated for QoQ growth, while the absolute numbers are also reported.)
Strategic Business Realignment for Profitability
The company is undergoing a strategic realignment, exiting low-margin businesses such as power trading and refrigerant gas, which previously contributed ₹150-200 Crores to revenue in the same quarter last year. This conscious decision aims to enhance profitability, even if it results in lower year-on-year revenue. The focus is shifting towards high-margin ash moving and management businesses, and the newly established wind energy segment, with a target to maintain a sustainable EBITDA margin of 11-12%.
Ash and Coal Handling Business Growth and Capacity
The ash and coal handling business experienced a strong recovery in Q3 FY26, driven by normalized site accessibility post-monsoon. The company has an open order book of ₹1500 Crores for this segment, with 40% expected to be executed in the next four months and 50% in the subsequent 4-12 months. Management reported a 48% CAGR in quantity and expects a 50% jump in quantity this year. The daily handling capacity is currently 72,000 tons and is being ramped up to 90,000 tons this quarter, with potential to handle over 100,000 tons.
Wind Energy Segment (Venwind) Development and Order Book
The wind energy business, operating under the subsidiary Venwind Refex Private Limited, has secured cumulative orders worth ₹1860 Crores. Deliveries for these orders are scheduled to commence from February 15, 2026, with execution expected over 3 to 12 months. The company emphasizes that its 5.2 MW turbines, utilizing German Vensys Energy technology and LIDAR, are proven globally and suitable for the Indian market. A royalty of 0.25-0.5% will be paid to the OEM after three years, and the segment is expected to contribute substantially to the Refex group.
Refex Green Mobility Demerger Progress
The demerger of Refex Green Mobility Limited is progressing, with completion expected by the end of April 2026, pending final NOCs from lenders. Post-demerger, Refex Mobility, a pure B2B player in employee transportation and rent-a-car services, will operate as a separate entity with its own debt and enhanced strategic flexibility. Assets worth ₹220 Crores are expected to be transferred to the mobility entity, allowing it greater autonomy for business operations.
Financial Position and Promoter Pledging
Consolidated debt stands at approximately ₹700 Crores, primarily non-fund based, comprising ₹150 Crores in CC limits and ₹550 Crores in BG/LC limits, with a small term loan of ₹37 Crores for an office building. The company holds over ₹100 Crores in cash and equivalents. Promoter share pledging, currently at 25-26% of their holding, is planned for substantial reduction over the next six months, addressing investor concerns regarding financial leverage.