Operator: Ladies and gentlemen, thank you for the patience. The call for Refex Industries Limited will begin shortly. Ladies and gentlemen, good day and welcome to the Q2 FY27 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 Intime. Thank you and over to you.
Vidhi Vasa: Thank you, Nashua. On behalf of MUFG Intime, I welcome you all to the Refex Industries Limited Q2 and H1 FY27 earnings conference call. On the management side, we have Mr. Dinesh Kumar Agarwal, full-time Director and Chief Financial Officer, and Mr. Sonal Jain, Head – Accounts and Taxation. I hope everybody had an opportunity to go through the investor deck that we have uploaded on Exchange 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 Aggarwal. Over to you, sir.
Dinesh Kumar Agarwal: Thank you very much, Vidhi. Good morning, and thank you for joining us for the Refex Industries earning call for the Q2 and H1 ended 30 September 2026. The quarter reflected solid executions 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 generations, and plan for further increase of the capacity to 150 gigawatts in the coal-based power plant by 2035 compared to earlier envisaged 97 gigawatts, continue to provide strong structural growth opportunity for our business.
Dinesh Kumar Agarwal: Stricter environmental compliance requirement and financial consequence of non-compliance are also making the ash management and complete ash utilization a critical operational necessities for the thermal power plant, and accelerating the shift towards outsourcing to organized player with proven execution capabilities, strong logistic infrastructure, and robust compliance credentials. This quarter of the year has always been tough for us with monsoon conditions in north, east, and central part of India, directly impacting our execution volume and consequently impacting the revenue due to rainfall, water logging, and transportations constraint 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.
Dinesh Kumar Agarwal: 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 Q2 FY2027, and PAT up by 56% in H1 FY2027 on year-on-year basis. This reflects the strength of our underlying business execution capabilities and growing our order pipeline. As conditions bounce back, our focus remains on accelerating the executions, mobilizing new secured orders, 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 will continue to exercise discipline our billing, and pricing and commercial arrangement with the gencos, with an emphasis on the sustainable margin, operational efficiency, and timely realization of revenues.
Dinesh Kumar Agarwal: 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 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 complementary avenues for the growth while leveraging our existing expertise in logistics and material handling and industrial operations to build an 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: Industry estimate indicates the market is expected to grow approximately 240 million cubic meter valued at ₹1.25 lakh crore in 2025 to 317 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 Chdavale, Pune commenced the operation on 25 September 2026, followed by Hoskote in Karnataka and Kalyan near Mumbai. We are progressing with a phased rollout across Mumbai, Bangalore, Hyderabad, Kolkata, and Chennai. The business is being led by 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 solutions, advanced technology, and customer-centric innovation.
Dinesh Kumar Agarwal: We are promoting green concrete through greater fly ash utilization, supporting the cement industry 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 plant to address labor shortage, improve operational efficiency, and ensure consistent quality. Alongside this, we intend to move beyond commodity-based raw material supply towards solution-led customized concrete offerings tailored to specific customer needs, construction application, and project requirements, creating greater value through product performance and application expertise. To support this ambition, we are building an integrated technology platform covering batching, logistics, procurement, and financial reporting alongside stronger capability across sales, quality, and operations in the RMC business.
Dinesh Kumar Agarwal: We intend to create a scalable operating model with a commitment to 100% on-time delivery and zero cube failure, and not just individual RMC plants. Importantly, we are adopting a capital-light, lease-based model that enables us to scale without significant investment in fixed assets. We believe this is the right way to build the business, scaling the operation, expanding selectively to attractive markets, maintaining financial discipline as we grow. While this new business will require disciplined execution and a clear focus on unit economics, we will balance growth opportunity with capital efficiency, working capital discipline, and sustainable profitability. Overall, we remain focused on strengthening our 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 creation to our shareholders.
Dinesh Kumar Agarwal: Moving to our next business, next subsidiary of the business is the wind turbine manufacturing business. The industry continues to witness strong momentum supported by India's renewable energy ambitions and improving project execution environment. India added approximately 1.8 gigawatts 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's total installed wind capacity reached 59.2 gigawatts as on September 2026. Looking ahead, the growth outlook remains favorable with the Ministry of New and Renewable Energy indicating that India could add up to 8 gigawatts of wind capacity during financial year 27, compared to 6 gigawatts during financial year 26. This strong pipeline is expected to support increased equipment demand and project activity across the wind energy value chain.
Dinesh Kumar Agarwal: With the structural tailwind, we see early and positive signs of customers with positive progress towards our order conversations and execution, and getting the new order. We remain focused on delivering our existing order book while strengthening our manufacturing and indigenous capability. The business continued to make steady progress during the quarter with the delivery gaining momentum and initial supplies completed all 3 customers, Torrent Power, KP Energy, and Jindal. Project execution is advancing across the customer site with foundation and erection activity underway in line with the delivery schedule. In parallel, the company is progressing on technology transfer, indigenization of initiatives, including the development of domestic manufacturing capability while strengthening its leadership and execution team with experienced industry professionals to support the next phase of growth. Coming to our green mobility business, our priority is profitable growth. We are pursuing it through core initiatives. First, vendor attached supply.
Dinesh Kumar Agarwal: We are moving from 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 costs into variable payout, increasing the skin in the game for the drivers. Second, contract discipline. We are taking up only margin-accretive contract, and existing legacy contract that lost money historically for Farad. Third, operational density. As our vehicle network grows denser in each city, our fleet utilization is improving, in turn increasing our earnings. Automation. We are automating across the operations from billing, collection, driver payout, and maintenance to reduce the leakage and keep overheads from growing as fast as volume. On the revenue side, we are scaling the corporate rental segment alongside the employee transport segment, which anchor steady long-term demand. We are also adding demand channel partnerships and integration with the technology-enabled fleet management, tying this together.
Dinesh Kumar Agarwal: On the demerger process, we have completed key procedural milestones, and the final approval from honorable NCLT is currently awaited, and the matter is listed on 11 November in the coming month. Subject to the necessary regulatory approval and completion of the remaining formalities, we expect this demerger process will get completed within next 2 to 3 months' time. I will take you through the financial performance of the company for the quarter ended 30 September 2026. On a standalone basis, revenue from the continuing operations is INR 560 crore compared to INR 411 crore on a year-on-year basis, which represents a 36% growth. EBITDA stand at INR 91 crore compared to INR 74 crore on a year-on-year basis. This EBITDA growth of 22% on a year-on-year basis, and the current year EBITDA margin is 16%.
Dinesh Kumar Agarwal: Profit after tax is INR 60 crore compared to INR 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, standalone revenue is INR 1,179 crore compared to INR 760 crore in the previous half-year on a year-on-year basis, which represents a 55% growth in the revenue. EBITDA INR 196 crore compared to INR 114 crore on a year-on-year basis for the half year, which is growth of 17% on a year-on-year basis. Profit after tax INR 133 crore compared to INR 86 crore on a year-on-year basis, which represents 55% growth on a year-on-year basis. And also there is an increase in the 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 the growth opportunity across our business.
Dinesh Kumar Agarwal: For wind energy business, revenue for the quarter is ₹201 crore compared to ₹297 crore in the previous quarter. EBITDA of ₹111.32 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 to the previous quarter. We have achieved the positive EBITDA in the mobility segment in this quarter. We have done an EBITDA of ₹1.3 crore compared to ₹0.8 crore in the previous quarter. In this business, we can see the profitability path in the business. Our leadership team is fully committed to bring a PAT-level profitability in a year's time. With this, I will request the operator to open the floor for the question and answer. Thank you.
Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while a question queue assembles. The first question is from the line of Udit Sehgal from PinPoint X Capital. Please go ahead.
Udit Sehgal: Results. Regarding the wind energy business, sir, we have been talking of the orders getting finalized soon. What exactly is the pipeline for next year, and how soon would the orders get finalized? I mean, are there ROW issues or some price negotiations, or what stage are we at?
Dinesh Kumar Agarwal: We are in the final stage of price negotiation. Project execution, ROW issue or land issue, will not come to us because we are only the equipment supplier. We are in the final price negotiations closure stage for the large volume of the order. We should close within next 30 days to 45 days' time, and we will announce the same, Udit.
Udit Sehgal: Okay, sir. Thank you. Regarding, sir, the backward integration in this wind energy business, what are the steps we are taking and from when can we see the margins coming in and what would we say the ideal margins we are targeting 2, 3 years down the line?
Dinesh Kumar Agarwal: Backward integration, or we can call as a setting up a manufacturing plant. Indigenous manufacturing plant is in full swing. Manufacturing plant should be operational between 12 to 14 months. The real impact of that will take another 6 months after that on the profitability. Certainly, there will be good impact on the profitability after a year and a half in the books of account.
Udit Sehgal: Okay. So sir, we see Inox and Suzlon, they make 17%, 18%, 20% kind of margins. Is that our aspiration as well? Since we are doing-
Dinesh Kumar Agarwal: That is the aspiration, but they are mature in the localization. For achieving that, it will take certain time, but that's the aspiration.
Udit Sehgal: Thank you, sir. With respect to the RMC business, sir, that is a new segment we have come up with. What is the thought process? What would be the potential revenue or EBITDA margins we are looking at? Won't we be facing competition from the cement players? What is our edge and outlook for it?
Dinesh Kumar Agarwal: Already we work as suppliers to the infrastructure company currently. Also we supply to the existing RMC plant in India. This is more of a forward integration for us. We will have a better margin compared to whoever currently is present in the RMC business. We are purely going with a zero CapEx model, asset-light model. Also with respect to the people, we will be more of a tech-driven approach to the people-driven approach in the RMC. We will have an edge over the existing player in terms of the operational execution capability. It will take another 3 months to 5 months to show the impact in the profitability, because it takes time for the setting of the new plant.
Dinesh Kumar Agarwal: We see a very good growth in this segment, because it is a natural forward integration or natural compatibility for us into the same business. Though it is a new business, operationally we are already working with the RMC plant for last one year and also with the infrastructure company for last several years.
Udit Sehgal: Okay, sir. Thank you. Sir, potentially, say 2, 3 years down the line, could this be as big as the coal ash business?
Dinesh Kumar Agarwal: It should be. It should be. We are working towards that.
Udit Sehgal: Great, sir. With respect to the coal ash business, sir, the core business, how do we see the growth going forward? I think we had a good growth aspiration for this year. How is that shaping up and what about the coming year as well?
Dinesh Kumar Agarwal: As we have spoken in the earlier call also, we will have a 20% to 25% of the revenue growth in the year to come.
Udit Sehgal: Okay. We can take that for this year as well as next year.
Dinesh Kumar Agarwal: Yes.
Udit Sehgal: Okay, sir. Thank you. Thank you, and best of luck, sir. I will come back in queue.
Operator: Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Deepak Poddar: Yeah. Am I audible, sir?
Dinesh Kumar Agarwal: Yeah.
Operator: Yes.
Deepak Poddar: Yeah. Thank you very much, sir, for this opportunity. Just wanted to understand first up on the wind side, that price negotiation that you were saying. What is the quantum? Any rough range of that order we are looking at?
Dinesh Kumar Agarwal: It is a very, very good quantum. We expect it will have a substantial good quantum in the placement.
Deepak Poddar: Good. Higher than your existing order book? I think our existing order book is close to what, INR 1,100 crore?
Dinesh Kumar Agarwal: Somewhere close to the existing order book.
Deepak Poddar: So INR 1,100 crore is our existing, right? In wind?
Dinesh Kumar Agarwal: Yes.
Deepak Poddar: Okay. Understood. Is there any more pipeline in your ash and coal business order book as well? Currently it is about ₹1,700 crore.
Dinesh Kumar Agarwal: Yes.
Deepak Poddar: Can you throw some light there?
Dinesh Kumar Agarwal: Yeah. It is more of a tender way compared to wind. We have already participated in a large tender. We expect all that tender to open in the coming next one month to two months.
Dinesh Kumar Agarwal: It is actually every week, every 10 days, new tender keeps opening, and we keep submitting it. Any small order of ₹50 crore, ₹200 crore, we will keep announcing every week.
Deepak Poddar: Okay. Do we have a benchmark? Every quarter we look to add around what, INR 400 crore to INR 400, 500?
Dinesh Kumar Agarwal: No, it is pure tender driven.
Deepak Poddar: Okay.
Dinesh Kumar Agarwal: Pure tender driven, though we have a target, but it is very difficult to predict the value of total tender. Whatever we execute, we try to add more than that.
Deepak Poddar: Understood. Got it. On the wind side now, on the margins, I think we had earlier said by year-end we will look to have maybe what, 4%, 5% PAT margin. Now the scale is also kind of increasing. We have done in the first around INR 500 crore of execution. So where are we there? Are we still looking by FY27 end we can be PAT margin of what, 4%, 5%?
Dinesh Kumar Agarwal: PAT margin, we have EBITDA margin of 4% to 5%. PAT margin of 2.5% to 3% over there for in the current financial year and in the coming financial year till half year. After that, margin will further improve due to indigenization. It will improve further.
Deepak Poddar: This year we are still targeting FY27, EBITDA margin of 5% to 6% and PAT margin of 2% to 3% in wind business?
Dinesh Kumar Agarwal: Yeah. 4% to 5%.
Deepak Poddar: 4% to 5% EBITDA?
Dinesh Kumar Agarwal: Yeah.
Deepak Poddar: Okay. Understood. Execution, we have earlier said on ₹1,800 crore kind of execution in wind this year, right?
Dinesh Kumar Agarwal: No. We have earlier told that we will complete the complete order book. As of now, it is around ₹1,100, ₹1,200 crore. We will do a business of ₹1,300 to ₹1,400 crore in the current financial year.
Deepak Poddar: I mean, H1, we have already done around close to ₹500 crore, and we have got ₹1,100 crore more order. So we do not expect this ₹1,100 crore to get executed by
Dinesh Kumar Agarwal: Part will get spill over to the coming financial year.
Deepak Poddar: Okay.
Dinesh Kumar Agarwal: Large part will get executed in the current year.
Deepak Poddar: Current year. So INR 1,300 to INR 1,400 crore execution we are targeting.
Dinesh Kumar Agarwal: INR 1,300 to INR 1,400 crore in a complete financial year.
Deepak Poddar: Got it. And maybe just last thing on the coal ash business. You mentioned to the previous participant we are looking at 20% to 25% CAGR, right, in terms of growth. I mean, in the H1, we have to see, we have grown this business by about 53%, right?
Dinesh Kumar Agarwal: Yes.
Deepak Poddar: This year, we expect a higher growth for coal. Already in the H1, we have done quite well.
Dinesh Kumar Agarwal: That's the target, but on a guidance side, we will be maintaining that 20% to 25%. For us, in this quarter, Q2 is always lesser due to monsoon. But we were able to execute in the new geography where rain is less, especially the south, and which has impacted our revenue and the profit.
Deepak Poddar: Still we grew very well. I mean, in the first-
Dinesh Kumar Agarwal: Well, we have done well. We have done well on a year-on-year basis, and we expect this growth momentum to continue.
Deepak Poddar: To continue. So ideally that range, we can beat that range in this year, FY27. I am not talking about FY28 as such, but this year. Because H1, we are so much higher, I mean, 53%. So this range of 20-
Dinesh Kumar Agarwal: But if you see absolute term, last year, H2 had a very substantial compared to H1 of the previous year.
Deepak Poddar: Correct.
Dinesh Kumar Agarwal: I mean, in absolute terms. So that is the reason we can safely assume a 20% to 25% of a growth on a year-on-year basis.
Deepak Poddar: Understood. And what is the volume we are doing right now? 70,000-
Dinesh Kumar Agarwal: This Q2 was quite less.
Dinesh Kumar Agarwal: It was around 35,000 to 40,000.
Dinesh Kumar Agarwal: Volume started going up. Though there is some part, there is a tsunami or the rain going on for last one week. Volume started going up.
Deepak Poddar: By Q4, 90,000 that we have been targeting.
Dinesh Kumar Agarwal: Yeah, that is the target.
Deepak Poddar: That remains the target, right?
Dinesh Kumar Agarwal: Yeah, that remains it.
Deepak Poddar: Okay, got it. That would be it from my side. Wish you all the best. Thank you so much. Yeah.
Operator: Thank you. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Saket Kapoor: Yeah. Namaskar sir. Hope I'm audible.
Dinesh Kumar Agarwal: Yes, Saket.
Saket Kapoor: Sir, firstly, when we look at our balance sheets, we have cash and cash equivalent to the tune of ₹322 crore and bank balance to the tune of ₹153 crore. Whereas our finance costs have gone up on a QoQ basis from ₹13 crore to ₹17 crore, and other income has declined. Can you please explain, sir, where I'm missing something or?
Dinesh Kumar Agarwal: Yeah. Finance cost has gone up, but there is an impact on the gross margin. We have started paying all our vendor through the TReDS platform with a certain cost, which is benefiting the vendor, and we are also getting a decent discount in the direct cost. Which is also, there is a good impact on the gross margin at a COGS level. Whatever the finance cost increase is getting offset or we are getting more benefit in the COGS level. There is a new platform that is a TReDS scheme for the MSME vendor, which is we are taking the benefit rather than utilizing the cash balance available in the bank.
Saket Kapoor: Didn't get the point, sir. Why would then the finance cost go up when we are getting it, when we are
Dinesh Kumar Agarwal: There is
Saket Kapoor: Balance sheet.
Dinesh Kumar Agarwal: Yeah. Finance cost is a separate line item in the indirect cost, will show increase because of the payment through the TReDS platform. Whereas the vendor cost in the COGS is a separate line item in the direct cost, which is showing a decrease in the cost.
Saket Kapoor: Okay. But as we are making the payment, sir, our cash and bank balance should be lower on that front. Why have that moved up and yeah.
Dinesh Kumar Agarwal: Because that limit is being paid through the TReDS platform rather than utilizing the bank balance. And bank balance is a subject to the collection. The day the quarter end bank balances has gone up, over a period of time, it is a fungible, it keeps growing. I mean, balance is less increasing. That is not the uniform across the quarter.
Saket Kapoor: Okay. Because on the trade receivable front also, that has also ballooned to INR 1,251 crore.
Dinesh Kumar Agarwal: That is because the turnover also has increased.
Saket Kapoor: Yes. That is correct, sir. But our H1 revenue is INR 1,677 crore, and trade receivables are to the tune of INR 1,250 crore.
Dinesh Kumar Agarwal: Yes, sir. It is the same receivable cycle of 120 to 130 days.
Saket Kapoor: Okay, sir. Sir, coming to the other expenses also line item. When we look at on a QoQ basis, that has gone down from INR 23 crore to INR 11 crore. Sir, what explains this QoQ movement in the other expenses?
Dinesh Kumar Agarwal: If you remember, on the Q1 call we have explained. That is in the Q1, there is a one-time expense that has been given for the banks processing fees. We have changed from HDFC Bank to Indian Overseas Bank and Canara Bank. For that, prepayment charges and the processing fees impact was there around INR 4.5 crore in the Q1, which is not there in the Q2.
Saket Kapoor: Okay. Even eliminating that also, the expenses have gone down. That is because of the lower volume or any proportionate to it that results in other expense, the key elements?
Dinesh Kumar Agarwal: No. Travel goes down in the Q2.
Saket Kapoor: Okay.
Dinesh Kumar Agarwal: No expense in the South. These are the few impact.
Saket Kapoor: Sir, can you outline how H2 should look up? I think you just alluded to earlier trends that we have a better Q2 in terms of higher revenue from the coal handling part and also ash handling part and also on the wind energy, wind order also getting executed. So on a conservative basis, how should H2 look like and what should be the EBITDA margin trend because of the higher operating leverage kicking in? Can you outline to us how on last year basis, how does the current H2 look like?
Dinesh Kumar Agarwal: Our EBITDA margin in the standalone basis will be between 15% to 18%, which we have spoken during all the previous calls. This year, growth will be between 20% to 25% in terms of the revenue. With respect to the wind energy, which I have told in the earlier call, we will be completing the majority of the order. Few orders will get spill-over to the next year first quarter. We will have 2.5% to 3% PAT and 4% to 5% EBITDA margin.
Saket Kapoor: Okay. Lastly, sir, on the green mobility part. Sir, how does this business fit into the realm of things that the company currently does? How do they complement our existing businesses or in terms of the critical mass and the scale that we may be looking into and the key rationale, although we are demerging it, but still the management bandwidth and all will be there. So what is exactly the thought process, firstly, for the green mobility part and also pertaining to the RMC part, sir, if you could just outline to us the largest player in the RMC segment. How are those cement player margins currently because whatever reporting my understanding is, none of them make good money on the RMC part of their story. It is more of the branding that goes into, rather than the pure RMC play.
Saket Kapoor: I am talking of the likes of ACC and even Birla Corp and all. I may be incorrect also on my book. Correct me there on these two parts because these may act as anti-EPS dilutive in the way forward pertaining to the growth that we are seeing in the remaining business. That is only the thought process. Kindly correct me.
Dinesh Kumar Agarwal: See, RMC, if you read the UltraTech balance sheet and the RDC Concrete balance sheet well, they are also making a profit of 10%, which is very much possible. They are making a 10% profit in spite of there is a majority of the unit level, there is a loss. You can see what kind of a profit can come from RMC. It is not as a branding game. If you see their sales volume in a cement business, they actually sell more through the RMC than a direct sale. This is a separate line of business for the cement company, and they make good money out of it.
Saket Kapoor: Okay.
Dinesh Kumar Agarwal: Coming to the green mobility business. First of all, from the management bandwidth perspective, this business, there is a CEO, Anirudh Arun, and he has a very strong team. Meet Goradia, Ankit, Rohan, Pashupati, they manage this business independently with a very strong domain expertise. Once the demerger happens also, they are going to continue managing this business. Anirudh Arun has very great credentials in the same segment of the business. He is the CEO for this business. With respect to the complement, in ash business also and also the RMC business, one segment which is one of the item in this both business is the logistic, which plays a major role in delivering the service for this business. Mobility is also more of a logistic business with a tech-driven approach.
Dinesh Kumar Agarwal: This complements the business and also going to be separate since the customer segment will be completely different. That is the reason it will get demerged, and it will be a separate listed company. Every shareholder of Refex Industries Limited will get the proportionate share in the green mobility business. There are strong credentials. You can see the team who is leading the mobility business.
Saket Kapoor: Sir, just to add one point, one question regarding this to Mr. Jain, that over a period of time, sir, we have seen the valuation which the company used to command, say, a year or 18 months ago, that has now degraded, and we are trading at a lower PE in spite of delivering on promised set of numbers and taking the initiatives of growth. What is the understanding of the management being the largest shareholder on the type of forward PE that is being currently depicted by your minority shareholders? On the pledge part also, how are we progressing? I think so every quarter and all, we get an update of how things are going to move ahead. On these two aspects, what is the thought process of this from Mr. Jain's side? If you could just apprise us.
Dinesh Kumar Agarwal: Anil Jain is not there in the call today.
Saket Kapoor: Okay.
Dinesh Kumar Agarwal: Just to answer, valuation is a matter of market-driven, market-determined value. Our focus is only building the business. We continue focus and building the business with a great profit reporting, creating a shareholder value. Market is not under anybody's control. It works with a different, not only the results, it also various geopolitical things we consider. I will not like to comment on the market. To comment on the share pledge, we need to divide the share pledge into two things. What has been borrowed for and utilized as a business, and another segment, large, which is close to INR 400 crore, INR 450 crore, has been only given as a secondary pledge for the acquisitions of another business. That large amount of the pledge will get removed within 3 to 5 months completely, where you can see a significant drop in the pledge percentage.
Dinesh Kumar Agarwal: That is only a secondary pledge. There is no challenge to that. That business is doing really well. So there is no money per se has been taken and used any other places, only a very, very small, close to INR 100 crore only borrowed. Rest of the is just a secondary pledge which will get removed. For an acquisition stage it has to be given, business is stabilized, and it will go out in 3 to 5 months time.
Operator: Sorry to interrupt you, sir. I would request you to rejoin the queue for a follow-up question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Suhani Singh from ROS Capital. Please go ahead.
Suhani Singh: Hi, sir. Good afternoon. I just had two questions. With the company entering RMC business, how
Dinesh Kumar Agarwal: Suhani, can you be louder?
Suhani Singh: Hello, can you hear me now?
Dinesh Kumar Agarwal: Yeah, better.
Suhani Singh: Yeah. With the company entering the RMC business, how does the management expect this new vertical to contribute to overall profitability and EBITDA margin?
Dinesh Kumar Agarwal: RMC segment will start contributing to the overall profitability from the coming financial year, and it will contribute a good amount to the total profitability. In the current financial year, it will go towards the setting up of the new plant and establishing the team across the location. But we expect from the coming financial year to have a real impact on the business.
Suhani Singh: Okay. How much of the existing wind energy order book was executed during Q2 FY2027? If you could let us know what is the expected execution trajectory for the remaining order book.
Dinesh Kumar Agarwal: I have answered this question in the last two previous participants. But we will be executing a large part of the order in the current financial year. A small spillover will happen to the, as per the contract terms only, to the next financial year. This business will grow year-on-year with it substantially because it is a new business. We are delivering as per the contract. We are in line as per the contract within the scheduled time, we are delivering all the order. We have delivered part of the order to all the KP Energy, Torrent, and the Jindal, and the balance also will get executed as per the customer schedule in the coming quarters.
Suhani Singh: Okay, sir. That helps. Thank you very much.
Operator: Thank you. A reminder to all the participants to please limit your questions to two. The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar: Hello, sir. Thank you for taking my question, and congrats for a good set of numbers. Sir, in terms of this standalone business of ash and coal handling, you are saying it is like 20% to 25% growth, but this H1 we have done really well. So for this second half, what kind of growth should we expect in terms of this segment?
Dinesh Kumar Agarwal: We expect from the last year H2 will maintain the same and also will have a certain more growth. On a year-on-year basis, we will have 20% to 25% growth, and we are trying to do better. As of now, its commitment is 20% to 25% growth. But we will have better numbers than the last financial year. Business is doing well. It also has certain factors, rain, other disturbance in the ground. We have established at more geography compared to the previous financial year, which is helping us to get the good revenue number and delivering to the client service. We expect a good growth momentum in the remaining part of the half year in the current financial year.
Ankur Kumar: Sir, actually, 20% to 25% growth would mean not much growth in H2. If 20% to 25% is for full year, then H2 will not be much growth. That is why I wanted to ask on this.
Dinesh Kumar Agarwal: Ankur, we will have a very good growth. I do not want to commit anything on a number term, but to tell you, we will have a good growth in the H2.
Ankur Kumar: So 20% to 25% would be H2.
Dinesh Kumar Agarwal: We have a good order book. We have strong execution team and RMC getting added. The team got added into the RMC. It is complementing the business into the newer geography, especially like Karnataka, Maharashtra, where our presence was very low. It is helping us. Both the teams are syncing really well, complementing each other, helping each other. We will have a strong growth in the H2 financial year 2025.
Ankur Kumar: Sure, sir. Thank you, and all the best.
Operator: Thank you. The next question is from the line of Sajal Raj from Zenflow Finance Private Limited. Please go ahead.
Sajal Raj: Good afternoon, sir. Am I audible?
Dinesh Kumar Agarwal: Yes, sir.
Operator: Yes, sir.
Sajal Raj: Yeah. Sir, actually, my question is on working capital management. As we are looking in H1, a lot of cash is getting stuck in the working capital. So what kind of measures you are taking to improve the working capital?
Dinesh Kumar Agarwal: See, this is more of a working capital intensive business. One of our USPs is the working capital for the vendor or the partner who works with us. Another area where the receivable looks high, especially the contract, shall I say, is the retentions money. Retention percentage differ from contract to contract, and there is a cycle and due dates to it, which takes time for the collections to come and getting added into the receivable and contract assets and showing high. Whereas the regular cash generation, if you see the cash flow, our very good positive operating cash flow. Business is doing well in terms of the cash flow. We manage the working capital very tightly. Considering the borrowings, we maintain a very low compared to the industry, much lesser than the industry, our borrowing cost.
Dinesh Kumar Agarwal: Compared to the turnover, revenue, locations, our working capital cycle is well within the controlled limit with a zero bad debt. No NPA, no bad debt.
Sajal Raj: Okay. And sir, what will be working capital days for FY27, 28? Any kind of ballpark number you are targeting?
Dinesh Kumar Agarwal: It will be the same, 130 days. Breaking that cycle is not easy. That is where we are trying to bring some level of automations more, so that billing and certification work happens faster, where that cycle is only under our control, rest is not under our control. Which is taking some time from 30 days to 60 days. If we break that cycle, further working capital cycles can be brought down. Especially this billing and certification, which sometimes goes to 70 days, is impacting the overall receivable cycle.
Sajal Raj: Okay, sir. And sir, yesterday, we had NCLT hearing on the demerger. So what is the status on that?
Dinesh Kumar Agarwal: It is got adjourned to 11 November. There was no sitting. Honorable judge was on holiday, and it is on 11 November 2026.
Sajal Raj: Okay, sir. Thank you so much for taking my question. All the best.
Operator: Thank you. The next question is from the line of Sarthak Jain from Destilado Advisory. Please go ahead.
Sarthak Jain: Hello, am I audible?
Operator: Yes.
Sarthak Jain: Good afternoon, and thanks for the opportunity. Sir, you have entered
Dinesh Kumar Agarwal: Sarthak Jain, can you a bit louder, Sarthak Jain?
Sarthak Jain: Am I audible now?
Dinesh Kumar Agarwal: Yeah, better.
Sarthak Jain: Good afternoon, sir, and thanks for the opportunity. So, sir, you have entered the ready-mix concrete business with the Pune plant starting operation in October. So, sir, could you share the plant's current capacity and utilization, and what level of volumes would be needed to make it profitable?
Dinesh Kumar Agarwal: Yeah.
Sarthak Jain: Also, as you expand the business to other locations, should we expect significant additional investment or working capital requirement?
Dinesh Kumar Agarwal: Yeah. I will hand over the call to Mr. Anil Kulkarni, who is the Chief Business Officer for the RMC segment. He will take up this question.
Anil Kulkarni: Sure.
Anil Kulkarni: First question is, Pune we have started on 1 October. What is the current volume we are doing? What is our future CapEx? Anything is there. Mr. Sarthak Jain, see, this is a satellite plant, so there is no CapEx as such in the plant. This is going to be our model for all ready-mix plants that we put up across the country. As far as the capacity is concerned, the plant capacity is 60 cubic meter per hour capacity. Not very high, not very low. We should anticipate volumes of almost about 4,000, 4,500 cubic meters per month from this plant alone.
Sarthak Jain: Okay. Thank you so much.
Operator: Thank you. The next question is from the line of Smit Jain from Flawless Family Office. Please go ahead.
Smit Jain: Yes. Thanks for the opportunity. Just two things. One is on the promoter pledging. As the market is falling downwards, the collateral value, which is the share price, is also falling with it, right? It can potentially trigger additional pledging or forced selling by the lenders, which can cause severe distress to even fundamentally strong companies. 50% of the promoters holding close to 50% is still pledged. As shareholder, how should we assess the risk associated with it? Suppose you can give some light on the entire picture about why is it being pledged and what is the structure?
Dinesh Kumar Agarwal: Yeah. Mr. Smit, you must have seen, in spite of shares falling down, there is almost nothing additional pledge has been done. That is the confidence lender has with the promoter. Second thing, it is not a borrowings as such. We have to divide the pledge into the three bucket. One where there is a borrowing company. Second bucket where borrowings has happened, pledge has been given to acquire additional share from the market, which we have disclosed during the last quarter. Third bucket is only a secondary pledge for the acquisitions of a new business. Acquisition of new business, which is the substantial pledge, which I have clarified in the earlier call. It will get removed. We have started repaying the principals there. A small amount of principal is already being paid. Some more part will get paid in the coming months.
Dinesh Kumar Agarwal: Over a period of time of three to five months, that part will get completely removed. With respect to the borrowing, every month there is a due date, it is being paid, all installment amount, it is getting reduced month on month, though the pledge is there, but it is getting reduced. We expect the third bucket, which is borrowed money, also to get completed over a period of 12 months to 24 months completely. I mean, large part will get closed between three to five months. Balance will get closed between 12 to 24 months.
Smit Jain: Okay.
Dinesh Kumar Agarwal: There is nothing to worry. In spite of share falling down, lenders are with us, and they know that we are paying on time every month.
Smit Jain: Fair enough. Just for our comfort, that is what I wanted to understand. Even if, suppose, because market valuation is not in our control, even if it falls further by 20%, 25%, 30%, there is not a risk of forced selling by lenders, which can again trigger a downfall.
Dinesh Kumar Agarwal: That will never happen with Refex. As a business, this is going good. At a group level also, we are well capitalized, well cash, sitting at a holding company nicely. That is the reputation we carry as a group. There will not be a single share of any forced selling at any point of time in spite of any fall in the share price, which is not under our control. But in spite of that also, rest assured, there will not be a single share. Forget about any pledge selling. Any single share sale from any of the lender. We are really sitting with a very good business across the group, and we are confident about this, our listed company also, that it will do well.
Smit Jain: Perfect. Thank you so much. I think that gives comfort. The second point, again, although you have addressed this, was on the receivables front. You have shared that 120 days is a typical credit cycle that we extend to our debtors. Is there a percentage of current receivables which are overdue beyond the normal credit period that we usually extend to our customers, or everything is within line at this point? If you can just throw some shade there as well.
Dinesh Kumar Agarwal: There is zero amount overdue. Second thing is there is a zero amount at risk also, where there is a possibility of any bad debt. All the collection is coming within the time. Today's challenge is only billing on time, which is the certifications takes time, because that has to be foolproof with all supportings, which is taking time. We are bringing some automation, some documentations to do faster. Otherwise, not ₹1 also overdue, not ₹1 also there is a possibility of any bad debt. So business collection is watertight and doing really well. You can see it from cash flows.
Smit Jain: When we say that there is no risk of an overdue, is it because these are government-backed institutes that we are going to collect from? Or what exactly is giving us the confidence that there won't be a case of overdues?
Dinesh Kumar Agarwal: That confidence is the delivering the executions on time. We are not delaying our execution, which is giving us the confidence that our collection also will not get delayed.
Smit Jain: Okay, perfect. These are all reputed parties wherein the amount which is in discussion is not going to be a hassle for them to pay.
Dinesh Kumar Agarwal: Yes.
Smit Jain: Perfect. Okay, sir, thank you so much. I will fall back into queue. Thank you.
Operator: Thank you. Due to time constraints, we take this as the last question for the day. I now hand the conference over to the management for the closing comments.
Dinesh Kumar Agarwal: Thank you so much for the time, and thank you so much for coming into the call, asking us all the questions, and we are here to answer all the questions. Mr. Gautam Jain, who is the Vice President, our Investor Relations, supported by Pankti, both of them are based out of Mumbai. Anybody can reach out to them at any point of time for any further questions, any clarifications. Their numbers is also there in the investor presentation, and anybody can reach out to them. Thank you so much for the time.
Operator: On behalf of MUFG Intime, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
