/** Blogpost: Refex Industries Limited Source: Investor presentation (Q4 & FY26) and earnings call transcript (27-May-2026) */

Refex Q4 FY26: Margin expansion, wind execution begins, and the demerger clock ticks

Refex Industries closed FY26 with a clear message to investors: the headline story is no longer about chasing revenue through low-margin activities, but about improving the quality of earnings through execution-led services and new platforms. In standalone continuing operations, Q4 FY26 revenue rose to INR701 crore from INR594.5 crore, a year-on-year growth of 17.9%. EBITDA more than doubled to INR141.1 crore, and EBITDA margin expanded sharply to 20.1% from 10.4% a year ago. PAT came in at INR93.7 crore, up 66.9%, with a PAT margin of 13.4%.

The full-year picture looks different on the topline, but stronger on profitability. FY26 standalone revenue from continuing operations declined 9.7% to INR2,039.2 crore. Yet EBITDA rose 68.5% to INR350 crore and PAT grew 34.7% to INR247.2 crore. Management attributed the revenue moderation to business transitions and restructuring and emphasized that the portfolio is being reshaped towards businesses with better margin visibility and scalability.

FY26 performance: profitability up, cash conversion remains a key monitorable

The expansion in profitability is visible across the income statement. Gross profit in FY26 was INR406.8 crore versus INR262.5 crore in FY25. EBITDA margin improved to 17.2% from 9.2%, and PAT margin improved to 12.1% from 8.1%.

However, the cash flow statement shows that Refex remains a working-capital intensive business. Standalone operating cash flow for FY26 was INR30.8 crore versus negative INR254.5 crore in FY25, with a working capital movement of negative INR310.5 crore in FY26. The balance sheet explains part of the pressure: contract assets rose to INR734.1 crore at 31 March 2026 from INR171.4 crore a year ago, and trade receivables stood at INR737.3 crore. On the earnings call, management clarified that contract assets largely represent unbilled revenue where work is completed but certification and approvals are pending.

On capital efficiency, the presentation reported ROCE of 19% and ROE of 16% as of March 2026, with debt-to-equity at 0.10.

Ash and coal handling: order book visibility and a push towards integrated contracts

Ash and coal handling remains the anchor business and the largest contributor to the company’s operating narrative, even though a segment revenue split is not provided in the presentation. Refex highlighted an order book of about INR1,500 crore as on 31 March 2026. The quarterly highlights included a fresh order of about INR78.35 crore for pond ash handling for NHAI road projects and an INR49.22 crore material handling and transit operations contract with a three-year tenure.

The investment case for this vertical, as framed by the company, rests on regulation and execution capability. The presentation cites the MoEF and CC mandate that requires thermal power plants to achieve 100% ash utilization, with penalties of INR1,000 per ton for non-compliance. Refex positions itself as a compliance and logistics partner that can handle evacuation, transport, utilization, and traceability.

A key strategic theme is the move towards an integrated model that combines O&M of ash handling plants with complete utilization of fly ash, bottom ash, and pond ash. According to the presentation, this model enables partner-led investments for system upgrades without upfront capex for the power producer, creates entry barriers by restricting participation from operators without O&M credentials, and supports multi-year tie-ups.

Operationally, Refex repeatedly emphasized technology as a differentiator. The presentation described OCR deployment at APGENCO and NCL, GPS and camera-based monitoring, geo-fencing, mobile app-based field operations, and ERP integration to create a digital audit trail and reduce fake trips. This matters in a business where billing integrity and route verification can directly impact profitability.

On the earnings call, management also addressed cost escalation risk. Diesel inflation is not fully pass-through, with 40% to 60% recovery depending on contract terms.

Wind: execution has started, but margin ramp-up depends on localization

FY26 marked the start of meaningful execution in the wind vertical under Venvind Refex Power Limited. Management stated that deliveries commenced in February, followed by phased dispatches in Q4, and the wind vertical contributed about INR233 crore of revenue during the quarter.

The presentation reported a confirmed wind order book of INR1,860 crore and a secured order book of 406 MW. It also indicated a 1.5 GW pipeline. A milestone for market participation was ALMM approval for the 5.3 MW turbine platform, which management framed as improving execution credibility.

The wind thesis, as presented, is tied to India’s renewable push and policy support. The deck cites a national ambition of 500 GW non-fossil capacity and a wind capacity target of 140 to 150 GW by 2030. Refex also highlighted its technology and supply chain partnerships: Vensys as the exclusive technology license partner and Goldwind as a strategic supply chain partner.

On profitability, management disclosed on the call that current wind EBITDA margin is around 8%. They did not provide a numeric target for steady-state margins, stating that localization of components is a 1 to 2-year journey and is expected to improve profitability over time.

Mobility demerger: structure is defined, timeline depends on NCLT

Refex Green Mobility Limited is positioned as a tech-driven premium corporate mobility platform operating across Delhi NCR, Mumbai, Bangalore, Hyderabad and Chennai, with 1,750 plus vehicles as of 31 March 2026.

The company’s key corporate action is the planned demerger. As per the presentation, the structure involves Refex Green Mobility Limited merging into Refex Industries, and the mobility undertaking being carved out into a new company, Refex Mobility Limited, which will issue shares to all Refex Industries shareholders at a 1:1 swap ratio and list as an independent entity.

Management updated that approvals from BSE, NSE, and lenders have been received and that the NCLT application was filed on 26 March 2026. On the call, management indicated that completion could take roughly 60 to 75 days depending on the court process.

Takeaways

Refex’s FY26 results show a meaningful shift in the earnings profile of the standalone business. Revenue is lower year-on-year, but margins and profits expanded sharply, consistent with management’s commentary about moving away from trading-like activities and focusing on value-added execution services.

The next year’s narrative will likely be shaped by three operating variables that investors can track directly from disclosures: execution and working capital discipline in ash logistics, completion pace and margin stabilization in the wind business, and progress on the NCLT-led mobility demerger timeline.