Refex Industries Ltd (REFEX) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to the Q2 FY '27
Moderator: Earnings Call of Refex Industries Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Ms. Vidhi Vasa from MUFG NTime. Thank you, and over to you.
Vidhi Vasa (MUFG NTime): Thank you, Nishtha. On behalf of MUFG NTime, I welcome you all to the Refex Industries Limited Q2 and H1 FY '27 earnings conference call. On the management side, we have Mr. Dinesh Kumar Agarwal, Whole Time Director and Chief Financial Officer, and Mr. Sonul Jain, Head Accounts and Taxation. I hope everybody had an opportunity to go through the investor deck that we have uploaded on exchange and the on the company's website. I would like to mention a short disclaimer before we begin the call. This call may contain some of the forward-looking statements, which are completely based upon our belief, opinion, and expectation as of today. These statements are not a guarantee of our future performance, and involve unforeseen risks and uncertainties. With this, now I hand over the call to Mr. Dinesh Agarwal. Over to you, sir.
Dinesh Kumar Agarwal (Refex Industries Ltd): Thank you very much, Vidhi. Good morning, and thank you for joining us for the Refex Industries earning call for the second year second quarter and half year ended 30th September 2026. The quarter reflected solid execution in our established business and encouraging early progress in the new one. Let me take you through the developments across our business segments starting with ash and coal handling. India's growing power demand, continued dependence on the thermal power generation, and plant plan for further increase of the capacity to 150 GW in the coal-based power plant by 2035, compared to earlier envisaged 97 GW continue continue to provide strong structural growth opportunity for our business. Stricter environmental compliance requirement and financial consequence of non-compliance are also making the ash management and complete utilize ash utilization a critical operational necessities for the thermal power plants and accelerating the shift towards outsourcing to organized player with proven execution capabilities, strong logistic infrastructure, and robust compliance credentials. This quarter of the This quarter of the year have has always been tough for for us with monsoon conditions in north north, east, and central part of India, directly impacting our execution volume and, consequently, impacting the revenue revenue do due to rainfall, waterlogging, and transportation constraints, temporarily reducing our volume, which we handle on a day-to-day basis. Therefore, quarterly performance need to be viewed in the context of seasonal operating conditions. Despite these weather-related challenges, we have made healthy year-on-year progress, with revenue up by 36% and PAT up by 13% in the quarter 2 financial year 2027 and PAT up by 56% in H1 financial year '27 on year-to-year basis. This reflects This reflects the strength of our underlying business, executions capabilities, and growing order pipeline. As conditions bounce back, our focus remains on accelerating the executions, mobilizing new secured order, and converting opportunity into profitable growth. The focus on developing integrated ash handling contracts has been high, and we are working in multiple states to convert the opportunity to order. We'll continue to exercise disciplined our bidding and pricing and commercial arrangements with the GENCOs with an emphasis on this sustainable margin, operational efficiency, and timely realization of revenues. Moving Moving to our next areas of focus, I would like to highlight our entry into Ready Mix Concrete business, an important strategic step that represents a natural forward integration for our exist existing ash handling business. By extending our presence downstream into the construction material and infrastructure ecosystem, we aim to strengthen ash utilization, access new market, create complimentary avenues for the growth, while leveraging our existing expertise in logistic and material handling and industrial operations to build the integrated presence across the value chain. The Indian RMC market presents a significant opportunity driven by infrastructure development, urbanization, and increasing demand for the quality control concrete.
Dinesh Kumar Agarwal (Refex Industries Ltd): Industry estimate indicates the market is expected to grow approximately 240 million cubic meter, valued at 1.25 lakh crore in 2025 to 370 million cubic meter valued at 1.74 lakh crore by 2031, representing a CAGR growth of 7% year-on-year. Our first RMC plant at Charholi, Pune commenced with commenced the operation on 25th September 2026, followed by Hoskote in Karnataka and Kalyan near Mumbai. We are progressing with a phase phase rollout across Mumbai, Bangalore, Hyderabad, Kolkata and Chennai. The business is being led by Mr. Anil Kulkarni, an industry veteran bringing 30 years of experience and leadership to this business expansion. Our differentiation in the RMC business will be built around sustainable concrete solution, advanced technology, and customer centric innovation. We are promoting green concrete through greater fly ash utilization, supporting the cement industry's decarbonization effort while developing fly ash blended concrete for enhanced durability in conditions of water scarcity and deteriorating groundwater quality. Technology and automation will be central to our operational model with a focus on fully automated, technology enabled, and manless RMC plants to address labor shortages, improve operational efficiency and ensure consistent quality. Along alongside these, we intend to move beyond commodity based raw material supplied towards solution led customized concrete offering tailored to specific customer needs, construction applications, and project requirements, creating a greater value through product performance and application expertise. To to support this ambition, we are building an integrated technology platform covering batching, logistics, procurement, and financial report reporting alongside stronger capability across across sales, quality, and operations in the RMC business. We we intend to create a scalable operating model with a commitment to 100% on time delivery and zero queue failure, and not just individual RMC plant. Importantly, we are adopting a capital light, lease based model that enable us to scale without significant significant investment in fixed assets. We believe this is the right way to build the business, scaling the operations, expanding the selectively to attractive markets, maintaining financial discipline as we grow. While this new business will require disciplined execution and clear focus on unit economics, will balance growth opportunity with capital efficiency, working capital discipline, and sustainable profitability. Overall, we remain focused on strengthening our core as core business of ash and coal handling business while building the RMC as a complementary growth engine. We believe that forward integration will create additional growth opportunities and support sustainable value creations to our shareholders. Moving to our next business, next subsidiary of the business which is which is wind turbine manufacturing business. The the industry continues to witness strong momentum, supported by Indian India's renewable energy ambitions and improving project execution environment. India's added approximately 1.8 GW of wind capacity during the July to September 2026 quarter, reflecting a growth of 30% sequentially and 21% year-on-year. As a result, the country total installed wind capacity reached 59.2 GW as on September 2026. Looking ahead, the growth outlook remains favorable with Ministry of New and Renewable Energy indicating that India could have add up to 8 GW wind capacity during financial year '27, compared to 6 GW during financial year '26. This strong pipeline expected to support increased equipment demand and project active project activity across the wind energy value chain. With this structural tailwind, we see early and positive signs of customer,
Dinesh Kumar Agarwal (Refex Industries Ltd): indigenous capability. The business continues to make steady progress during the quarter with the delivery gaining momentum and initial supplies completed all all three customers, Torrent, KP Energy and Jindal. Project execution is advancing across the customer side with foundation and the erection activity underway in line with the delivery schedule. In parallel, the company is progressing on technology transfer indigenization of initiative including the development of domestic manufacturing capability, while strengthening its leadership and execution team with experienced industry professional to support the next phase of growth. Coming to our green mobility business, our priorities profitable growth. We are pursuing pursuing it through four initiatives. First, go on attached supply. We are moving from own own vehicle to driver-cum-owner model and third-party supply, with the same quality and the service standard for every vehicle. This turns fixed ownership cost into variable payout, increasing the skin in the game for the drivers. Second, contract discipline. We are taking up only margin-accelerated contract accretive contract and exit and existing legacy contract that lost money in the historically or further. Third, operational density. As our vehicle network grows denser in each city, our fleet utilization is improving, in turn in turn increasing our earnings. Automation. We are automating automating across the operations from billing, collection, driver payout and maintenance to reduce the leakages and keep overheads from growing as fast as volume. On the revenue side, we're scaling the corporate rental segment alongside the employee transport segment, which anchor steady long-term demand. We're also adding demand channel partnership and integration with the technology-enabled fleet management, tying this together. On the demerger process, we have completed key procedural milestone and the final approval for the final approval from honorable NCLT is currently awaited. And the matter is listed on 11th of November in the coming month. Subject to the necessary regul- regulatory approval and completion of the remaining formalities, we expect this demerger process will get completed within next two to three months' time. I'll take you through the financial performance of the company for the quarter ended 30th September 2026. On a stand-alone basis, revenue from the continuing operations is 560 crore compared to 411 crore on a year-to-year basis, which represents a 36% growth. EBITDA stand at 91 crore compared to 74 crore on a year-on-year basis. This EBITDA growth of 22% on a year-on-year basis and the and the current year EBITDA margin is 16%. Profit after tax is INR60 crore compared to 53 crore on a year-on-year basis, which represents a 13% PAT growth on a year-on-year basis. For the half-year ending, stand-alone revenue is 1,179 crore, compared to 760 crore in the previous half-year half-year, which is on a year-on-year basis, which represents a 55% growth in the revenue. EBITDA, 196 crore, compared to 114 crore on a year-on-year basis for the half-year, which is growth of 70% on a year-on-year basis. Profit after tax, 133 crore, compared to 86 crore on a year-on-base year-on-year basis, which represents 55% growth on a year-on-year basis. And also there is an increase in the PAT PAT margin compared to the previous half-year in the same period. Our balance sheet continue to remain healthy, and we remain committed to maintaining financial discipline while simultaneously investing in growth opportunity across our business. For wind energy business, revenue for the quarter is 2 201 crore compared to 297 crore in the previous quarter. Previous quarter, EBITDA EBITDA of 11. 11.32 crore compared to -3 crore in the previous quarter. For the mobility business, revenue for the quarter is 36 crore, compared to 33 crore in the previous quarter. There is a growth of 10% compared compared to the the previous quarter.
Dinesh Kumar Agarwal (Refex Industries Ltd): And and there is a EBITDA, there is a, we have achieved the positive EBITDA in the mobility segment in this quarter. And we have done a EBITDA of 1.3 crore compared to 0.8 crore in the previous quarter. And this business we we can see the profitability path in the business. Our leadership team is fully committed to bring a PAT-level profit- profitability in in a year's time. With this, I'd request the operator to open the floor for the question and answers. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Udit Singhal from Pinpointx Capital. Please go ahead.
Udit Singhal (Pinpointx Capital): results. Regarding the wind energy business, sir, we've been talking of the orders getting finalized soon. I mean, what exactly is the pipeline for next year, and how soon would the orders get finalized? I mean are are there ROW issues or some, you know, issue, you know, price negotiations or I mean what stage are we at?
Dinesh Kumar Agarwal (Refex Industries Ltd): We are in the final stage of price negotiation. Project execution, ROW issue or land issue I mean won't come to us because we are only the equipment supplier. And we are in the final price negotiations closer stage for the large volume of the order. We should have I mean we should close within next 30 days to 45 days' time. And will announce the same to it, next.
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