Refex Industries Limited showcased a remarkable sequential recovery in Q3 FY26, marking a significant turnaround from the monsoon-affected first half of the fiscal year. The company's strategic focus on core businesses and operational improvements delivered strong financial performance across key metrics.

Strong Sequential Financial Recovery

The company's Q3 FY26 performance demonstrated substantial sequential improvement across all major financial parameters. Revenue growth was particularly impressive, driven by normalized site accessibility and improved ground conditions following the extended monsoon period.

The sequential revenue increase of Rs.160 crores was primarily attributed to higher ash and coal volumes handled during the quarter. While cost of goods sold increased from 79% to 81%, management attributed this to changes in margin mix rather than operational deviations.

Strategic Business Realignment

Refex Industries made strategic decisions to exit low-margin businesses to enhance return profiles and focus on core operations. The company discontinued its power trading and refrigerant gas businesses, which had contributed Rs.150 to Rs.200 crores in the same quarter last year but offered minimal profitability.

The management emphasized that while this strategic exit resulted in lower year-over-year revenues, it significantly improved profitability metrics. The company's EBITDA margin for Q3 FY26 stood at 16.10%, compared to 17.42% in the previous quarter, with management targeting sustainable margins of 11% to 12%.

Robust Order Book and Business Segments

The company maintains a strong order book position across its key business verticals, providing visibility for future revenue growth.

For the ash and coal handling segment, approximately 40% of the Rs.1500 crores order book is scheduled for execution within the next four months, 50% within 4 to 12 months, and the remaining 10-15% represents three-year contracts.

Ash and Coal Handling Business Expansion

The company currently handles approximately 72,000 tons of ash daily and is ramping up to reach 90,000 tons per day in the current quarter. The business has demonstrated strong growth with a 48% CAGR in quantity handled, with average realizations ranging between Rs.555 to Rs.700 per metric ton.

The total addressable market for ash handling presents significant opportunities, with Rs.68,000 crores in total market size. This includes Rs.10,000 to Rs.15,000 crores in annual incremental market from 340 million metric tons of ash generated yearly, plus Rs.50,000 to Rs.55,000 crores in legacy ash accumulated in power plant ponds.

Wind Energy Business Development

The wind energy vertical, operating through Venwind Refex Private Limited, has secured orders worth Rs.1860 crores from prominent clients including Jindal Steel, Torrent, and KP Green. The business manufactures 5.2 MW wind turbines using German technology from Vensys Energy, with deliveries scheduled to commence from February 15th onwards.

Key features of the wind turbines include 130-meter hub height for better wind velocity capture and LIDAR technology for automatic wind direction detection and nacelle positioning. The company provides equipment warranty for 12 months and performance guarantees for five years, focusing purely on supply rather than installation or execution.

Corporate Restructuring and Future Outlook

The demerger of Refex Green Mobility Limited is progressing according to the approved composite scheme, with completion expected by end of April 2026. This will result in Rs.220 crores of net assets being transferred to the mobility business, which will operate as a separate listed entity.

Looking ahead, management expects operational momentum to continue with multiple new ash projects commencing site activities and stabilizing operations across regions. The company remains well-positioned with its strong order book, disciplined execution capabilities, and strategic focus on high-margin core businesses.

Refex Industries has announced plans to substantially reduce its promoter pledged shares over the next six months, according to guidance shared during a recent conference call. The initiative targets the current pledging levels, which stand between 25% to 26% of promoter holdings.

Pledging Reduction Strategy

The company's management outlined their commitment to significantly lower the proportion of pledged promoter shares during the conference call discussion. The current pledging levels represent a substantial portion of promoter holdings that the company aims to address systematically.

Strategic Implications

The planned reduction in promoter pledging typically indicates several positive developments for a company. Lower pledging levels generally reflect improved financial position and reduced leverage pressure on promoter holdings. This strategic move often enhances investor confidence by demonstrating management's commitment to strengthening the ownership structure.

Timeline and Implementation

The six-month timeline provided by the management suggests a structured approach to reducing the pledged shares. This timeframe allows for systematic implementation while maintaining operational stability and financial planning flexibility.

The announcement was made during a conference call, indicating transparent communication with stakeholders regarding this significant corporate development. Such guidance typically reflects management's confidence in their ability to execute the planned reduction within the specified timeframe.