Refex Industries Q3 FY26 earnings call

Refex Industries demonstrated a strong sequential recovery in Q3 FY26, with revenue increasing by ₹160 Crores to ₹583 Crores, marking a 38% sequential growth. This improvement was primarily driven by higher ash and coal volumes. Profit before tax rose to ₹89 Crores (up 24% QoQ), and profit after tax reached ₹67 Crores (up 29% QoQ). The EBITDA margin for the quarter stood at 16.1%. The company has strategically exited low-margin businesses like power trading and refrigerant gas, which contributed ₹150-200 Crores in the same quarter last year, aiming for improved profitability despite a year-on-year revenue dip.

The ash and coal handling business experienced significant operational improvement as site accessibility normalized. The segment currently holds an open order book of ₹1500 Crores. Management expects 40% of this order book to be executed in the next four months, 50% in the subsequent 4-12 months, and the remaining 10-15% over three years. The total addressable market (TAM) for ash handling is estimated at ₹68,000 Crores, comprising ₹10,000 Crores from annual generation and ₹50,000-₹55,000 Crores from legacy ash. The company anticipates a 50% jump in quantity this year, with average realizations ranging from ₹555 to ₹700 per metric ton.

The wind business is progressing steadily, having secured cumulative orders totaling ₹1860 Crores. Deliveries for these orders are scheduled to commence from February 15th, 2026, with execution expected within 3 to 12 months. Refex is focusing on 5.2 MW wind turbines, citing global market trends towards larger capacities and advanced technologies like LIDAR for improved generation. While product development and engineering are in-house, manufacturing involves sourcing parts from various vendors, positioning the company as an assembly center for these turbines.

The demerger of Refex Green Mobility Limited is on track, with NCLT order completion anticipated by the end of April 2026. This strategic move will enable the mobility business, which has ₹220 Crores in net assets, to operate as a separate, independently listed entity with greater operational and financial autonomy. On the capital front, consolidated debt stands at approximately ₹700 Crores, predominantly non-fund based, including a ₹150 Crores cash credit limit and ₹550 Crores in bank guarantees/letters of credit. The company reported cash and equivalents upward of ₹100 Crores.

An income tax search was conducted on December 9, 2025, at the company's offices and a senior executive's residence. Management asserted that no incriminating documents were found and dismissed media reports as 'fake news,' stating no long-term impact on the business is expected. Regarding promoter share pledging, approximately 25-26% of promoter holding is currently pledged, linked to a holdco-level borrowing. The company has a plan to substantially reduce this pledged amount over the next six months.