Detailed Narrative
Strong Financial Performance in Q4 and FY25
Refex Industries delivered robust financial results for Q4 and the full fiscal year 2025. Standalone total income for Q4 FY25 grew 81.97% year-on-year to ₹629.07 crores, with EBITDA increasing 45.3% to ₹63.21 crores and net profit rising 59.68% to ₹57.09 crores. For the full year, standalone total income was ₹2,482.52 crores, up 78.75% YoY, and net profit surged 87.6% to ₹189.41 crores. Consolidated figures also showed strong growth, with FY25 total income at ₹2,518 crores and net profit at ₹158.38 crores, reflecting a consolidated PAT margin of 6.4%.
Ash & Coal Handling Business as Core Growth Driver
The Ash & Coal Handling sector remains the backbone of Refex's business, delivering efficient logistics services to over 40 power plants across India. The handling capacity has reached 70,000 metric tons per day. Management indicated a strategic shift from low-margin coal trading to higher-margin ash handling, which improved overall margins despite a sequential dip in Q4 total revenue. The company aims for a 10%+ market share in this segment over the next five years, expecting significant growth in tonnage and value in the coming fiscal year.
Green Mobility Vertical Expansion and Strategy
Refex Green Mobility Limited is rapidly expanding its EV fleet, which has grown from 24 vehicles in March 2023 to over 1,300 vehicles today. The company targets to expand its fleet to 5,000 EVs by FY27, requiring an equity investment of ₹50-60 crores, funded by existing capital and a preferential issue. While the B2B EV business is currently operating at a loss, it is expected to become profitable this year, with gross margins for employee mobility services projected at 16-20%. The company is also expanding its presence to another 3-4 cities this year, focusing on scalable B2B and B2B2C models.
Entry into Wind Turbine Manufacturing
Refex has entered the wind turbine manufacturing sector, securing an order from Torrent Power worth approximately ₹750 crores, to be executed over the next 15 months. The company plans to start with CKD (Completely Knocked Down) assembly and gradually move to full manufacturing within 18 months, with a factory already established in Silvassa. The turbines will be 5.3 megawatt single units, utilizing technology from German partner Vensys, and are expected to generate more energy at lower wind speeds.
Capital Allocation and Debt Management
The company received ₹512 crores from a preferential equity issue of ₹900 crores. Short-term borrowings have increased, primarily due to Letters of Credit (LCs) and vehicle loans payable within 12 months, which are part of the normal course of business for rapid expansion. The equity requirement for the EV fleet expansion is estimated at ₹50-60 crores, to be funded through existing capital and the preferential issue. Management aims to improve the overall PAT margin to 10% within the next 1-3 years.
Cash Flow and Debtor Days Concerns
Despite strong profit growth, Refex reported a negative cash flow of ₹264 crores for FY25, compared to a net profit of ₹158 crores. This was primarily attributed to an increase in debtor days from 81 to 101 days, a consequence of the rapid business expansion. Management expects debtor days to normalize to 80-90 days within the next 2-3 quarters as business cycles establish. A GST demand of ₹29 crores is being treated as a contingent liability, with management confident of a favorable outcome.