Refex Industries Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Portfolio pivot delivered margin step-change: EBITDA margin hit 20.1% in Q4 (vs 10.4% YoY) as the exit of low-margin trading businesses and a shift toward services unlocked structural profitability improvement.
• Wind business enters execution phase: Revenue of ~₹233 cr booked as turbine deliveries began in February; management expects to execute the entire ₹1,500 cr pending order book in FY27.
• Ash & Coal Handling remains the anchor: Core services grew an adjusted 28% after stripping out trading, with a ₹1,500 cr order pipeline and a ramp-up target to 90,000-95,000 tons/day this year.
• Demerger and reclassification catalysts near: NCLT hearing expected in June, with completion in 60-75 days; stock exchange reclassification from industrial gases filed and awaiting approval.
• What to watch next quarter: Whether the wind business books the new orders management says are in advanced negotiation, the pace of pledge reduction over the next six months, and the NCLT demerger timeline holding to 60-75 days.

Portfolio Transformation & Margin Reset

• Trading exit structurally lifted margins: FY26 revenue declined 10% YoY to ₹2,039 cr solely because Refrigerant Gas and Power Trading were wound down; the service businesses that remain (Ash & Coal Handling) always carried good margins, so the mix shift mechanically expanded EBITDA to ₹350 cr, up 68% YoY.
• Cost discipline amplified the benefit: Manpower costs fell through technology introduction, COGS dropped 18%, and operating efficiencies improved across the continuing businesses.
• Q4 run-rate signals the new normal: The 20.1% Q4 EBITDA margin is deemed sustainable; management guided a band of 15% to 18% going forward, with the Q4 print representing the upper end of what the reshaped portfolio can deliver.
• Finance cost contained despite one-time hit: Finance costs rose to ~₹30 cr, including a ₹2-2.2 cr one-off from switching banks as part of a refinancing exercise aimed at lowering future borrowing costs for both Refex Industries and the Venwind business.
• Pledge increase is a loan-structure artifact: Promoter pledge rose to 41% because borrowing repayments are ongoing and pledge removal occurs only on full loan closure per contract terms; a large part is expected to be removed in stages over the next six months.

Dinesh Agarwal: "Margin will be around the same. There was a service mix. Because of that, margin has improved. And the EBITDA margin anywhere, it will be between the 15% to 18% always."

Wind Energy: From Development to Delivery

• Execution has begun: Deliveries of wind turbine generators commenced in February 2026, with phased dispatches contributing ~₹233 cr in the initial phase; the business has now moved decisively from order booking to revenue recognition.
• Full order book conversion targeted for FY27: Management expressed confidence in executing the entire pending order book of ~₹1,500 cr in the current financial year, with some new orders potentially adding to FY27 revenue as well.
• New order pipeline is live but unsigned: The company is in advanced stages of closing a few orders; management declined to confirm a ~₹2,000 cr pipeline figure mentioned in prior interviews, stating only that no firm order exists to disclose today.
• ALMM approval de-risks the platform: Receipt of ALMM approval during the year strengthens market positioning and provides execution credibility for future order wins.
• Margins are a work-in-progress story: Current wind EBITDA margin is ~8%; localization of components is expected to improve this over a 1- to 2-year journey, but management declined to give a steady-state target, saying only that margins will be closer to or better than industry levels.
• Capacity build-out continues: The company is still building capacity and expects to reach about 2 GW by next year-end; management declined to specify peak revenue potential from that capacity.

Anil Jain: "We will keep trying to improve the EBITDA margin. I mean our aim will be to keep improving the EBITDA margin by a few percentages from current... I think these are all work in progress, so very difficult to give any number or guidance on this today."

Ash & Coal Handling: The Earnings Backbone

• Adjusted growth was 28%: Stripping out the exited trading component, the core Ash & Coal Handling services business grew 28% in FY26, per management's clarification.
• Volume ramp-up underway: Daily handling volumes currently at 68,000-70,000 tonnes are expected to rise to 90,000-95,000 tonnes in the current financial year, with no capacity constraint limiting growth.
• Order pipeline supports medium-term visibility: The ₹1,500 cr order pipeline provides strong revenue visibility; a long-term APGENCO contract (3 years) was added at the beginning of the financial year and is not reflected in quarterly disclosed additions, explaining an apparent order book mismatch analysts flagged.
• Domestic coal policy is a tailwind: Coal gasification programs do not affect thermal power plants, where 50 GW of new capacity is being added; domestic coal carries 37-40% ash content versus 12-13% for imported coal, structurally supporting ash handling demand.
• Diesel cost exposure is partially hedged: 40% to 60% of diesel cost increases are recoverable through escalation clauses, depending on the contract; the unrecovered portion will be a cost headwind but margins are expected to remain healthy.
• Double-digit growth expected in FY27: Management guided for the same growth trajectory as last year, with no capacity constraints and continued environmental compliance pressure from government authorities driving demand.

Anil Jain: "While we see there's a lot of pressure from the government and various authorities on the environment compliances, we see this division growing exponentially."

Demerger & Corporate Restructuring

• Mobility business demerger on track: All company-side compliances are 100% complete; BSE and NSE approvals have been received; the filing with NCLT is done and the first hearing is expected in the first week of June, with completion targeted in 60-75 days.
• Post-demerger thesis: The mobility platform will operate independently with dedicated strategic and financial focus, enabling sharper operational focus, clear capital allocation, and stronger long-term value discovery.
• EV policy tailwind: The Prime Minister's announcement on shifting government agencies to EVs is expected to drive good growth for the mobility business over the next few years; the business has already crossed ₹100 cr in revenue in three years and is progressing toward profitability with an asset-light, clean-fuel strategy.
• Stock exchange reclassification pending: An application to change the classification from "industrial gases" was filed two months ago; approval is expected any time.
• IT search disclosure complete: Management stated all disclosures at every stage have been made and expressed confidence that there are no challenges from the IT department for the company.

Dinesh Agarwal: "Currently, the courts are on holidays. It is a summer vacation in the court. And as of now, we should get the hearing on the first week of June. if we put a time line, another 60 to 75 days, this should get completed."

Capital Management & Balance Sheet

• Warrant cancellation was deliberate: Promoter and non-promoter entities chose not to subscribe to warrants because the company has sufficient cash, banking limits, and internal accruals; no immediate fundraise is needed for Refex Industries.
• Refinancing to lower borrowing costs: A refinancing exercise was initiated during the current quarter, with temporary processing charges incurred to secure better terms from banks for both the Venwind business and Refex Industries.
• Receivable days stable: Stand-alone receivable days are expected to remain between 105 and 125 days; the wind business operates on a completely separate, shorter receivable cycle backed by letters of credit.
• Seasonal revenue pattern: Q1 and Q4 typically do good business, Q2 gets impacted by monsoons, and Q3 is moderate; overall FY27 will show growth on a full-year basis.

Dinesh Agarwal: "It was a deliberate decision. And company has sufficient cash balance and the banking limit and the internal accrual."

Competitive Positioning & Long-Term Vision

• Market share ambition: Management aspires to grow to a "respectable percentage, maybe 2 digits over the next few years" in its addressable market.
• Five-year vision: The stated goal is to become so large that the second-largest player is not more than 25% of Refex's size.
• Moat built on scale and incumbency: Management expressed confidence that as new competitors enter, Refex will keep scaling higher, anchored by its existing operating footprint and execution track record.
• Consolidated growth outlook: With the wind business contributing only ₹238 cr last year and set to do significantly more in FY27, consolidated growth on a percentage basis will be "very, very high" compared to the previous financial year.

Anil Jain: "I don't say that, I don't want to be nasty by saying that there would not be anybody who can do this. But I think that as new people come, we'll only keep scaling higher and better from there."

Guidance & Commitments

Key Metrics