Refex Industries Ltd. expands into green mobility and ash processing

Refex Industries Ltd has established itself as a multi-faceted company with a diverse portfolio of refrigerant gases, energy trading, green mobility, ash and coal processing. Since its inception, the company has focused on refilling refrigerant gases that serve as replacements for harmful chlorofluorocarbons or CFCs and hydrochlorofluorocarbons or HCFCs.

The refrigerant gases are of crucial importance in various applications such as air conditioning, refrigeration, blowing agents in gutters and propellants in aerosols.

The company has operational refilling facilities in Chennai, Tamil Nadu. In 2018, Refex diversified into the ash and coal processing sector, estimating that the market value of this industry was over Rs 25,000 crores and could be a viable business proposition.

Refex has grown in a short time to become an important, organized player in the disposable ash sector. The company is actively engaged in reducing the environmental pollution caused by the production of ash during the combustion of coal in thermal power plants.

Refex Industries reuses the ash that is released for the construction of roads, highways and loading and unloading areas, but also for filling mines. In this way, Refex Industries contributes to the sustainable development of the infrastructure.

Refex is today the largest organised ash processing company in the country with major operations in the energy producing states of Chandigarh, Maharashtra, Madhya Pradesh, Bihar, Odisha, Tamil Nadu and Karnataka.

The company currently manages 35,000 metric tons of ash per day with a plan to expand available capacity to 60,000 metric tons by the end of FY 2025. The company has a fleet of 800 vehicles of which 39 are company owned. The company plans to add 80 company owned vehicles by the end of March 2025.

The company reported total income for Q4 FY 24 at Rs 345 crores with an EBITDA margin of 12.89% at Rs 148 crores. Quarterly profit after tax stood at Rs 35 crores, resulting in improvement in profit after tax and EPS, demonstrating the company’s strong bottom line performance and commitment to creating shareholder value.

The main factor contributing to the year-on-year decline in revenue is a significant drop in coal prices, which fell sharply by around 45% this year, leading to a sharp decline in top-line financials. Despite the tough, unfavorable market conditions, the company has taken proactive measures to maintain stable EBITDA margins.

The company has been able to adapt to market dynamics and effectively optimize operational efficiency, focusing on improving coal processing. At the same time, the company has been able to limit the impact of falling coal prices through prudent cost management.

Refex Green Mobility Ltd RGML, a subsidiary of Refex Industries Ltd, started transporting employees using electric vehicles in Bangalore and Chennai this year.

RGML offers an advanced technology platform by enabling employees to book electric vehicles and trained drivers for pick-up and drop-off at various locations.

The services will be branded Refex eEeelz and will be provided to software companies, large banks and corporates with large employee bases. Recently, RGML has also started operations at Bangalore airport as a preferred airport taxi partner, where it will operate 660 electric vehicles and hopes to start operations in Pune and Hyderabad by September this year.

While the company currently has 480 vehicles for this business, it has plans to expand the fleet to 2,000 vehicles by the end of March 2025. Stockbrokers and portfolio investors are bullish on the company and have been actively buying the Refex stock at the current price of around Rs 230 from a medium-term price appreciation perspective. Investors can check the fundamentals of the Refex scrip with their financial advisor and take a decision based on their risk appetite.