Refex Industries Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Sharp sequential recovery, but revenue still down YoY: Q3 activity rebounded strongly after an extended monsoon, yet the top line fell ~16% YoY as the company deliberately exited low-margin trading businesses that contributed ₹150–₹200 Crores in the year-ago quarter.
• Profit over revenue is the new strategy: EBITDA jumped from ₹153 Crores to ₹207 Crores in nine months despite the revenue drop, driven by a conscious pivot toward higher-margin ash handling and mining services.
• Wind manufacturing is about to deliver: The Venwind business signed a top Indian IPP player, deliveries start February 15th, and management expects "substantial revenue" from wind by the end of Q4 FY26.
• Ash handling is the core growth engine: The business is growing at a 48% CAGR in quantity, with a ₹50,000 Crore TAM and an open order book of close to ₹1,500 Crores, as the company expands into new states and locks in 3-to-10-year contracts.
• What to watch next quarter: Whether wind revenue materializes at scale in Q4, the pace of promoter pledge reduction over the next six months, and the completion of the green mobility demerger by the end of April.

Strategic Pivot: Exiting Trading, Focusing on Services

• Two businesses discontinued: Management has taken a strategic call to exit power trading and refrigerant gas, both low-margin or negative-margin segments that contributed ₹150–₹200 Crores in revenue in the same quarter last year.
• Profitability improved despite the revenue hole: Nine-month EBITDA rose from ₹153 Crores to ₹207 Crores because the mix shifted decisively toward higher-margin service businesses like ash handling and mining services, while coal trading was reduced.
• Standalone margin guidance: Q3 EBITDA margin of 16.1% was elevated by realignment; the sustainable level going forward is 11%–12%, with management aiming higher.
• Consolidated margin outlook withheld: Management declined to give a leading number on consolidated margins, stating only that they will be better than standalone.

Anil Jain: "We have been discontinuing businesses which are very low margin or negative margin like refrigerant, gas business and the power trading business, which actually contributed to close to Rs.150 to Rs.200 Crores last year in the same quarter."

Ash & Coal Handling: The Core Franchise

• 48% CAGR in quantity: The business is growing rapidly because the TAM is very large, and the company is expanding its team and fleet into new states, entering one new state last quarter and another this quarter.
• Realization ranges ₹555–₹700 per metric ton: Some states saw realization decline due to irrational bidding on projects the company knowingly left; other states are improving as local players who took orders at unsustainably low prices cannot execute.
• Order book of close to ₹1,500 Crores: Currently being executed, with the team continuing to engage large power plants to win newer contracts.
• Targeting end-to-end, long-term contracts: All new customers are being pursued for 3-to-10-year contracts covering the full solution, which locks in relationships and visibility.
• Coal power tailwind: Management believes coal power plants will stay for the next 20–30 years, with new capacity being added over the next 10 years, underpinning the ₹50,000 Crore market opportunity.

Dinesh Agarwal: "This market size to my knowledge at any point of time Rs.50,000 Crores market will be there for next 10 years."

Wind Business (Venwind): The Crown Jewel Bet

• First delivery imminent: Delivery starts from February 15th onward, with part of the delivery happening in March and a continuous monthly delivery cycle thereafter.
• Signed a top Indian IPP player: The customer is described as a "top-notch company in India," and management expects the wind business to become a "crown jewel" for the Refex group.
• Substantial revenue expected in Q4 FY26: No revenue was achieved in Q3, but management committed that the company will end FY26 with substantial revenue from wind.
• Manufacturing model is assembly-based: Wind turbine manufacturing is compared to a car: parts are made by various vendors under license, product development and engineering are done in-house, and towers and most steel are third-party, making it more an assembly center.
• Technology is proven German design: The machines use German technology from a Chinese manufacturer with close to 20 GW of machines operating globally; management sees no major failure risk.
• Performance guarantees are on uptime, not generation: The company gives a 12-month warranty on the machine and a five-year performance guarantee on equipment uptime, not on kilowatt-hour generation, because generation depends on wind velocity and maintenance.
• Margins initially competitive but profitable: Management is working at a very competitive price to win the first order but expects to make a very decent profit, comparable to what other competitors report.
• Royalty to Vensys deferred: Royalty payments are payable only after three years.
• Revenue guidance withheld: Management declined to give an aggregate revenue number for FY26, citing a policy of not providing leading numbers.

Dinesh Agarwal: "Venwind will be a crown in the jewel. It will be, it is really doing well. We have signed with a top-notch company in India, top IPP player in India."

Demerger & Corporate Structure

• Green mobility demerger by end of April: The composite scheme is progressing, and the company is waiting for final NOCs from lenders before filing; management expects the NCLT order by the end of April.
• Post-demerger business mix: On a standalone basis, Refex Industries will have 95% of its business from ash and coal handling, with green mobility becoming a separate entity.
• New subsidiary for retail wind: Refex Engineering Products Private Limited has been started under Venwind to target retail customers in the wind segment.
• Loan conversion in progress: Some investment lying as a loan in a subsidiary may get converted into either OCD or equity, depending on the structure agreed with the respective SPV; this will happen in the current period.

Anil Jain: "Green mobility will be demerged. So it will be a separate entity. Officially, on a standalone basis, Refex industries will have 100% business, maybe 95% business from ash and coal handling only."

Income Tax Search & Promoter Pledge

• IT search concluded with no seizure: An income tax search occurred on December 9th at office premises, the chairman's house, and a senior executive's premises; no incriminating documents were seized.
• Fake news rebutted: A large newspaper carried what management calls fake news about the search; the company has written to the newspapers and the Income Tax Department to clarify that the news was not officially released by the IT department.
• No formal conclusion yet: The company has not yet received a formal conclusion from the IT department; management noted it generally takes three to six months to file the report with the Central Circle, and the assessment order typically takes one to two years.
• Promoter pledge reduction planned: Pledging of shares was done three months back for borrowing at the holding company level; a margin call came and the company paid from its own source and securitized the lender; a substantial reduction is planned over the next six months, with a plan in place every month.

Mobility & Other Segments

• Mobility is pure B2B: The business focuses on employee transportation and rent-a-car, both of which are growing very fast; management sees no chance of demand reducing.
• Calibrated fleet expansion: The mobility business is strengthening its operational foundation, actively engaging enterprise clients, and working toward fleet expansion with a clear focus on utilization and unit economics.
• No view on ride-hailing: When asked about the outlook for demand aggregators and ride-hailing, management deflected, stating they have no inputs on what is happening in that space.
• Small capex planned: Only very small capex is planned at both the Refex Industries level and the Venwind level; no big investment plan this quarter.

Guidance & Commitments

Key Metrics