🚛 At a Glance
Refex began life trading green refrigerant gases. Then pivoted into ash handling (yes, actual ash from thermal power plants). Now, it’s India’s largest organized player in that space. Business is booming, but working capital is burning, and cash flow? Missing in action.
1. 🚦 Introduction with Hook
You start off cooling rooms. You end up managing ash pits of India’s dirtiest power plants.
Welcome to Refex Industries — the pivot champ.
From refrigerant gases to ash & coal handling for NTPC, Adani, UltraTech, this smallcap has quietly become a cash-rich chaos machine.
But behind the 3x stock rally in 3 years lies one big question:
Can a business that handles ash deliver long-term gold?
2. 🏭 Business Model (WTF Do They Even Do?)
🧊 Old Biz (Deadweight now):
- Trading eco-friendly refrigerant gases
🔥 Current Core (93% of revenue):
- Ash and coal handling, processing, and disposal
- Largest organized player in India
- Handles 50,000 MT of ash daily
- 19+ thermal plants, clients include:
- NTPC
- Ultratech
- Adani Power
- ACC Cement
🛠️ Scope of work:
- Logistics + disposal + operational & maintenance (O&M) of ash plants
3. 📈 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 1,629 | 1,371 | 2,430 |
| Net Profit (₹ Cr) | 116 | 101 | 189 |
| OPM | 11% | 11% | 9% |
| ROE | 22% | 21.9% | 22% |
| EPS | ₹10.5 | ₹8.7 | ₹14.7 |
⚡ Profit doubled in FY25, but margins contracted.
⚠️ Low margin business, high volume dependency.
4. 🔍 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 31x
- P/BV: 4.68x
- Market Cap: ₹5,860 Cr
- Fair Value Estimate: ₹340 – ₹390
📈 Assuming 20–23x FY26E EPS of ₹17
Yes, growth is real. But margins aren’t sticky, and debtor days are looking wild.
5. 🧨 What’s Cooking – News, Triggers, Drama
🚛 ₹250 Cr 3-year tender win:
- Ash disposal & O&M contract from a State GENCO (July 2025)
💳 Credit Ratings:
- SMERA reaffirmed A-/Stable for ₹300 Cr loan (July 2025)
🚀 Business Mix:
- Ash handling = 93% of Q1FY25 revenue vs 72% in FY22
- Refrigerant gas division barely exists now
🔎 Concerns:
- 📉 Debtor days up from 81 → 101
- ⛔ Negative operating cash flow in FY25
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| FY | Net Worth (₹ Cr) | Debt (₹ Cr) | Net D/E |
|---|---|---|---|
| FY21 | ₹119 | ₹74 | 0.6x |
| FY24 | ₹450 | ₹161 | 0.35x |
| FY25 | ₹1,224 | ₹158 | 0.13x ✅ |
🧠 IPO-era liquidity, high PAT → Equity base has exploded.
7. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex (₹ Cr) | FCF |
|---|---|---|---|
| FY24 | ₹10 | ₹30 | -₹20 |
| FY25 | -₹262 | ₹74 | -₹336 ❌ |
🚨 FY25 operating cash flow went deep red.
📦 Receivables + higher working capital = major strain
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 48% | 29% | 25.3% |
| ROE | 22% | 21.9% | 22% |
| Debtor Days | 55 | 81 | 101 😬 |
| CCC | 8 | 63 | 66 ⏳ |
Cash conversion cycle is deteriorating fast.
This is not a business where cash moves quickly.
9. 📈 P&L Breakdown – Show Me the Money
FY25 Q4 (Mar 2025):
- Revenue: ₹612 Cr
- Net Profit: ₹57 Cr
- OPM: 10%
- EPS: ₹4.42
Quarterly growth is real, but margins continue to hover around low double digits.
10. 🧑🤝🧑 Peer Comparison – Who Else in the Game?
| Company | OPM | ROCE | P/E | ROE | CMP/BV |
|---|---|---|---|---|---|
| Refex | 9% | 25.3% | 31x | 22% | 4.7x |
| Linde India | 30.8% | 17% | 129x | 12.4% | 15.3x |
| Ell. Ind Gas | 35.2% | 18% | 108x | 17.8% | 16.3x |
| Gagan Gases | 6% | 10.6% | 36x | 8.5% | 3.0x |
🧯 Refex isn’t really comparable to industrial gas giants anymore. It’s now closer to infra-O&M/logistics companies in operations.
11. 📦 Miscellaneous – Shareholding, Promoters
| Category | Mar 2025 |
|---|---|
| Promoters | 53.4% |
| FIIs | 2.0% |
| DIIs | 0.1% |
| Public | 44.5% |
📈 Promoters increased stake from 50.2% → 53.4% in 2 years
🧾 FII entry is slow but visible
📢 No dividend yet – all earnings reinvested
12. 🧑⚖️ EduInvesting Verdict™
“India’s largest ash handler… but is the cash ash too?”
Refex went from refrigerant trader to an infra utility micro-monster. Growth has been solid, returns attractive, and government biz sticky.
But FY25 has made one thing clear:
- Margins = capped
- Cash flow = wobbly
- Receivables = ballooning
🧮 Fair Value Range: ₹340 – ₹390
Unless it improves cash flows and stabilizes working capital, we’re in “good business, okay valuation, scary liquidity” zone.
✍️ Written by Prashant | 📅 11 July 2025
Tags: Refex Industries, Ash Handling, Coal Logistics, Infra O&M, Thermal Power, NTPC Contracts, Adani Power Vendors, Smallcap Utility, Infra Services, Refrigerant Gas to Ash King
