Refex Industries Limited (532884) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Refex Industries Limited Q4 and FY '24 Earnings Conference Call, hosted by Kirin Advisors. Please note that the duration of this call is 60 minutes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Chandni Chande from Kirin Advisors. Thank you, and over to you, ma'am.

On the behalf of Kirin Advisors, I welcome you all to the conference call of Refex Industries Limited. From management team, we have Mr. Anil Jain, Chairman and Managing Director; Mr. Dinesh Agarwal, Whole Time Director and CFO. Now, I hand over the call to Mr. Anil Jain. Over to you, sir.

Thank you so much. Good afternoon, everyone. I would like to extend a warm welcome to all of you, and thank you for joining us on this first earnings conference call of Refex Industries. Today we'd like to intimate you about our performance in the recent quarter and provide insights into our strategic initiatives and future outlook. Before we turn into the numbers, let me take a moment to highlight our core business areas and recent developments. Refex Industries was incorporated in 2002 and headquartered in Chennai. It has established itself as a multifaceted company with a diverse portfolio including ash and coal handling, refrigerant gases, green mobility and power trading. Our involvement and commitment to these sectors place us at the forefront of combating climate change and promoting sustainable development. Since our inception, we have been dedicated to refilling refrigerant gases that serve as replacements for harmful chlorofluorocarbons, or CFCs, and hydrochlorofluorocarbons, or HCFCs. We have emerged as a leading supplier of environment-friendly hydrofluorocarbon, or HFC refrigerant gases in India. These refrigerant gases are crucial in various applications, including refrigeration, air conditioning in residential, commercial and automobile sectors, flume blowing agents and aerosol propellants. We pioneered the introduction of refrigerants in a disposable can directly accessible to end-users, branded as Refex cans. We are currently operating of refilling facilities in Chennai, Tamil Nadu and along with warehouses in Delhi and Mumbai. In 2018, we expanded into ash and coal handling business. Our assessment of this sector suggests that market size exceeds INR 25,000 crores annually nationally for ash handling alone. Traditionally, ash handling has been managed by unorganized sector in this country. In a short span, we have emerged as a major organized player in ash disposal sector, actively mitigating environmental pollution caused by generation of ash during coal combustion in thermal power plants. Utilizing advanced technologies, we ensure safe ash collection, transportation and disposal with a strong emphasis on sustainability. We repurpose the ash generated for the construction of roads, highways and embankments, as well as for filling mines and low-lying areas, thereby fostering sustainable infrastructure development. Our presence extends across key power generating states, including Chhattisgarh, Maharashtra, Madhya Pradesh, Bihar, Odisha, Tamil Nadu and Karnataka, establishing us as the largest organized player in ash handling in the country. As on date, we manage 35,000 metric tonnes of ash on a daily basis with a plan to scale up to 60,000 metric tonnes daily disposal by year-end, utilizing a combination of both owned and leased fleet vehicles. Presently, we operate a fleet of 800 vehicles, of which 39 are owned by Refex, and this number is set to expand to nearly 119 owned vehicles by the year-end. As a part of our dedicated effort towards digital transformation, we prioritize harnessing technologies to boost operational efficiency and profitability, thereby fostering continuous value creation and expansion. At our headquarters in Chennai, we implement centralized data collection and analysis processes. To optimize our fleet management, we rely on centralized GPS tracking, partnering with reputable service providers like Loconav, TATA Fleet Edge, and iAlert. Through this innovative tracking system, we can closely monitor volumes, GPS location, and other vital metrics, positioning us as pioneers in this field. In 2022, we ventured into power trading and obtained a Category 1 Power Trading license. Most recently, Refex Green Mobility Limited, a wholly owned subsidiary of Refex Industries, commenced operation of employee transportation using electric vehicles in Bengaluru in March '23 and Chennai thereafter. RGML provides bundled offerings that include electric vehicles, trained and background-verified drivers, a sophisticated technology platform that helps employees book their pick-up and drop on time. We provide these services under the brand name Refex eVeelz to corporate customers like software companies, large banks, and companies who are into back-office services with large employees on board. As of yesterday, our fleet has run 73 lakh e-kilometers, and in the process, it has abated approximately 4.38 lakh kilograms of CO2, showcasing our commitment to reducing carbon emissions. We are also committed to help our customers achieve their ESG goals. I'm happy to share some of our recent developments that highlight our progress and strategic initiatives. Our step-down subsidiary in the green mobility vertical, along with employee transportation, has commenced operation at Bengaluru airport as a preferred airport taxi, where we'll be operating 660 electric vehicles at the taxi pick-up bay. This marks a significant milestone in our green mobility efforts, where we'll cater to B2C customers. Additionally, we are expanding geographically and increasing our fleet size, forging collaborative sustainability initiatives that align with our commitment to reducing carbon emissions. We plan to start operations in Pune and Hyderabad by September 2024. We are currently operating 479 vehicles for this business and plan to grow up to 2,000 by the end of this year. Our order book for other businesses also remains robust, with the ash and coal handling segment totaling about INR 1,000 crores and power trading segment at around INR 500 crores as of 24th May 2024. Bolstered by a strong presence in ash and coal handling and power trading, alongside our expanding footprint in the refrigerant gas vertical and advancing operation in green mobility, we are poised for sustainable growth. Coming to our financial performance. For the fourth quarter ended FY '24, we reported robust stand-alone financial results, highlighting the success of our strategic initiative and operational efficiencies. Our total income for Q4 '24 was INR 345.7 crores, contributing to an annual total income of INR 1,388.84 crores. This growth underscores the effectiveness of our diversified business portfolio. Our EBITDA for Q4 '24 was INR 43.50 crores with an EBITDA margin of 12.89%, while the annual EBITDA amounted to INR 148.75 crores with a margin of 10.85%. Our quarterly PAT was at INR 35.76 crores, resulting in a PAT margin of 10.34%. And for the full fiscal year, PAT reached INR 100.95 crores with a PAT margin of 7.27%. These results translated into an EPS of INR 3.23 for Q4 and INR 9.12 for FY '24. The improvement in PAT and EPS demonstrates our strong bottom-line performance and commitment to creating shareholder value. Our standalone revenue composition for FY '24 was as follows: Ash and coal handling at INR 945.58 crores, power trading at INR 280.9 crores, refrigerant gases at INR 72.31 crores, sale of other services at INR 55.64 crores, solar power at INR 10.36 crores and others at INR 5.77 crores. On a consolidated basis, our total income for Q4 '24 was INR 350.31 crores, culminating into an annual income of INR 1,401.13 crores. Our consolidated EBITDA for Q4 '24 was at INR 41.25 crores, representing an EBITDA margin of 12.05%; and the annual EBITDA at INR 146.1 crores with a margin of 10.57%. Highlighting our consistent operational efficiencies across all business segments, our consolidated PAT for the fourth quarter was INR 33.37 crores with a PAT margin of 9.53%, while the annual PAT reached INR 92.98 crores, reflecting a PAT margin of 6.64%. The consolidated EPS was INR 3.02 for Q4 and INR 8.40 for the full year. These figures illustrate our comprehensive growth and profitability even as we navigate through dynamic market conditions. The main factor contributing to the decrease in our revenue stems from a significant drop in coal prices in the current year, which plunged by approximately 45% compared to the previous year. This sharp decline has directly impacted our top line figures. While the prices have plunged, we have ensured that the volume was always the same, and we have increased our coal handling volume by 3,138 metric tonnes this year. Despite facing adverse market conditions, our proactive measures have allowed us to maintain stable EBITDA margins. We have seen a remarkable growth of 112 basis points in EBITDA margins and 236 basis points in PAT margins from Q4 FY '23 to Q4 FY '24. This highlights our ability to adapt to evolving market dynamics and optimize operational efficiencies effectively. Our focus on enhancing coal handling capabilities and prudent cost management has allowed us to mitigate the impact of declining coal prices on an overall financial performance. The financial performance of both our standalone and consolidated operations indicate a solid foundation and a positive trajectory for Refex Industries. We firmly believe that aligning economic prosperity with environmental stewardship creates lasting value. As we continue on this path of sustainable growth, we remain steadfast in our commitment to making a meaningful difference in the fight against climate change and fostering a greener, more sustainable future for generations to come. Our strategic focus on sustainable and diversified business practices, coupled with technological advancements and operational efficiencies, has contributed to these impressive financial outcomes. We remain committed to driving further growth and delivering consistent value for shareholders. Thank you so much.

[Operator Instructions] The first question is from the line of Yashwanti from Kojin Fin.

Thank you, sir, for the opportunity. Sir, by going through your results, we have seen that your revenue has been dropped as compared from FY '23 to FY '24, and mainly from your coal and ash handling business, which is a major contributor, even the decline has been seen there. So one thing I just wanted to understand from you is, what is the reason for this scene? And you had combined the coal and ash handling. So if you can give on a volume and price as data for both the businesses individually now, even going forward, if you can include this data in your presentation going forward?

Yes. To answer this question, the drop in revenue was mainly due to the fall in coal prices by almost about INR 5,198 per metric tonnes on an average in the year. While the quantity has increased by INR 3,137 metric tonnes, the prices have fallen. That's why there's a fall in revenue. Second, yes, the reason why the coal and ash handling has been combined, because the logistics used for coal and ash is almost common logistics. That's why this has been combined. But yes, we will try and see if we can split from the next time and share this data.

If you can just give the -- on the volume-wise, what was the ash handling and what was the coal handling, that can also help us understand it where the things are coming forward or what has gone...

Approximately, we have handled about 1 million tonnes of coal and about 60 lakh tonnes of ash.

So that is your average capacity for the year?

Sorry?

That is your capacity whole year, right?

That's the commodity handle. Coal handle through the year is 1 million tonnes, and ash was about 60 lakh tonnes for the year.

Okay. And sir, in one of your phone calls and one of your communications with the investors, you also mentioned that there is a lot of...

Your voice is not clear. Can you please try and speak inside the handset?

Yes, it's in handset only. Am I clear now?

Yes, it's better now.

Yes. Sir, you were also talking about there was a lot of dump ash has been put in a pond over the years when the regulations were not strict or maybe the users were not accepting a couple of years back. So what is the quantum you can guess? What is the quantum that is lying in that pond -- the dump ash? And what you as a company or what as a government are taking the initiatives to clear that as again it is hazardous for the environment?

Yes. To be very honest, this data is not available across the thermal power plants in the country. But most of the -- all the thermal power plants have created ponds within the thermal power plant where when this fly ash does not get disposed in an environmentally safe manner, they put this fly ash into pond for disposal in a future date. So there could be millions of tonnes of pond ash lying in ponds in thermal power plants, but there is no data which is available.

And sir, like you, is there any other company maybe organized or maybe not listed one who is also in the same business?

Most of this business is by unorganized sector. Our closest competitor would be a company by name Ashtech.

Ashtech Technology Private Limited.

Okay. And coming down to your mobility business, sir, can you please guide us more on your mobility business? We acquired the business from the...

Sorry, your voice is again going feeble. Can you be a little loud please?

Yes. I just wanted to understand more on your green mobility services, where you are giving couple of services, pickup and drop services for a couple of corporates. And you also mentioned in the opening remarks, which we have started with the Bengaluru airport. So can you just give us the outline or the business prospect for this line of business?

Yes. So if you look at the employee transportation using electric vehicles, when a lot of these -- most of these corporates want to fulfill their ESG compliance or Scope 3 ESG, they will all have to shift from ICE vehicles to electric vehicles over a period of time. And today, we are providing these services. So the market for this also is very huge. Every large corporate, software or a back-office company, provides transportation of their employees from the house to office. So this market is potentially going to grow -- the electric vehicle market is going to grow a lot. And on the Bengaluru airport, we acquired a company which had won a tender for providing airport taxis for Bengaluru airport. So the number of vehicles which are going to be deployed there is about 660 vehicles, of which we have already started deploying some of these vehicles. And by end of July, we would have deployed all the 660 vehicles there. And that is more for B2C where the passenger coming out of the airport, this is the first lane outside the airport where they can book the airport taxi.

Okay. So we are providing B2B to the corporate and B2C for the Bangaloreans, and this will happen through the acquisition. So when we acquired a company for this Bengaluru taxi services, what was the fees acquired by us from them?

Zero. It was a tender which they had won and they were not able to execute. So we acquired this to execute this project.

Okay. So did we hardly paid anything to them?

No.

Okay. So considering this Bengaluru taxi services and considering this corporate taxi -- the corporate mobility services, what would be your total fleet size as on date?

The total fleet currently is about 479 for the electric vehicles, which are operational both at Bengaluru airport and the corporate customers.

Okay. And they are all owned by us or it is only like owned-and-operated by the driver model?

Currently, most of them are owned by us. We have about...

Hello?

Yes, can you hear us? Roughly about 70% is on the books of the company, the vehicles, and 30% is on the lease.

Okay. And what is your plan increase in the fleet size for current year or maybe even for FY '26?

Currently, we are trying to reach 2,000 vehicles by March 2025. And our internal target to reach 5,000 vehicles is by March 2027.

And that will be completely own or it is an owned-and-operated by the driver model also?

Leased and owned vehicles together.

Both together. And sir, what is our fleet size in the ash handling business?

Sorry, your voice is feeble again. Can you repeat?

What is the fleet size in the ash handling business?

Currently, we are having 800 vehicles in ash, of this, 39 is owned by us, and we plan to add about 119 in the current year.

Okay. Sir, can you also help us understand how the fleet structure happens as well from the ash handling business? Is the power company pay us or the suppliers to whom we supply ash, they pay us?

Mix. That depends on the state to state. This is Dinesh Agarwal. That depends on the state to state. Few states, there is a surplus of ash where our company pays. There is in India, few states, there is a shortage, demand is high where the customer pays us. I mean -- or the consumer who is using the ash, they pay us. In an overall scenario, all over India, largely power plant pays us for the disposal.

So that is in the traveling charges, the transportation charges is paid by us?

Yes. We not only do the logistic transport charges, we do certain value additions on the compliances, permissions and certain technology we have deployed, and we charge over and above the only transportation charges.

Sir, if I may, we are helping the government, we are helping the environment from the sustainability perspective, taking this hazardous material out from the industry. So in that case, do we get any kind of a subsidy, any kind of a credit, or like any kind of a carbon credit kind of a thing by doing both these businesses? One is the tax funding, and the other is having a fleet in each site?

Yes. So currently, we are not doing that, but yes, there is a scope of, because there is a carbon abatement which is being done, CO2 abatement, so there is a scope of that also, which we'll look at in the next year.

Yes, because that I can see that there was the quantum of the carbon abated done by us by using this fleet size. So we can expect some kind of a revenue going forward. That is what you wanted to guide us?

Not in the current year, but maybe next year.

The next question is from the line of Aniket Nerkar from SEBI Registered Research Analyst.

This is Aniket Nerkar here. I'm a SEBI Registered Research Analyst.

Sorry to interrupt you, sir. May I request you to please use your handset?

Yes. Can you hear me?

Yes, sir. Please continue.

Yes. So I have a question pertaining to the investment done in RKG Fund-I. This was in 2021. Could you share some details about that investment?

RKG Fund is an alternate investment fund, Category 2 fund. And they specialize in investing into stress assets, and we have invested into that fund for a better return.

Could you give me some details about how could this fund be otherwise invested in your green mobility or any other business in order to grow the business in the first place? I mean what was the rationale behind investing in the fund?

The investment was done 3 years back, much before the green mobility business. And this is looking into -- we have seen this and we see a better return compared to any other investment, and that is the reason we have invested.

All right. Is there any maturity to this investment?

There is no maturity period, but we expect this to get liquidated over the next 18 months.

Sorry, over the next?

18 months.

All right. 18 months. The other question I have is the profitability margin on the ash handling business. Could you share some details related to that?

Profitability in coal and ash handling business is close to 12% net profit, and that is...

My question is that segregating the coal business and the ash business in terms of value.

Coal and ash business, as Anil has already answered this question in the previous one, this is both are interrelated, where interdependent logistics are there and that is the only reason we are keeping it as one business -- one identifiable segment.

Like I said, maybe going forward, we will try and split that because most of the logistics are cross-utilized between both the segments. So that is why, splitting the profitability is very difficult. But going forward, we will try and put a value to both of that and try and share that.

All right. Thank you. Could you give some revenue guidance for next year -- for this ongoing financial year for the coal and ash handling business?

We expect a better growth this year compared to the last year. We are growing at a CAGR of 30% in this segment, 30% to 40% in this segment. And we expect to repeat in coming 2 to 3 years the same CAGR.

The next question is from the line of Vijay Chavan from NCHP.

Actually my question is, what is the capacity of refilling of gases -- supplies of gases arrangements for refilling? Revenues and margin from this segment?

The current capacity is 3,000 metric tonnes per annum. And the total market size of refrigerant gases is about close to INR 1,000 to INR 1,200 crores across the country. And we don't see a large growth in this sector as such in the coming years because the whole market itself is very -- I mean, compared to the total overall revenue which the company will be doing, the percentage will be very, very less.

Okay, okay. So can you elaborate more on coal trading and power trading businesses?

On the power trading, currently what we do is we are a licensed power trading from -- we have a Category 1 power trading license from CERC by which any generator or a consumer of power or a DISCOM will have to buy and sell short-term power through this trading license. So currently, we have been doing some banking transaction for these DISCOMS. We work with various DISCOMS for this power trading. And we are also working with some of the generators to see if we can book some capacities for bidding or selling during the short-term power requirements for various DISCOMS. And on the coal, we have already explained that it's a trading business where we supply coal to some of the DISCOMS and thermal power plants in the country. The reason for that is more of doing both coal and ash handling in the similar -- in the same company.

[Operator Instructions] The next question is from the line of [ Jignesh Dayal ] from Jiva Capital.

Sir, I wanted to understand our -- we have different segments. So what kind of vision the company has in the next 3 years to 4 years? How our revenue will be reflecting division-wise -- percentage-wise, if you can throw some light?

Yes. So, if you look at the businesses except refrigerant gases, most of the businesses are linked to the logistics. The ash handling is also advanced logistic business. The e-mobility is also advanced logistic business, including electric vehicles. And coal trading is more of a business where we're able to utilize -- cross-utilize the logistics for ash. So going forward, we see refrigerant business growing at about 10% to 12% CAGR, and the ash handling and coal handling roughly about 30% to 40% CAGR. EVs, like we said, we are looking at almost about 4,000 to 5,000 electric vehicles by 2027.

Okay. So -- and what about power trading?

Power trading currently is more a licensed business. So it's more depending on government tenders for banking and trading of power. So very difficult to give an outlook for this currently because these are just starting to mature now.

Okay. And what kind of -- in coal and ash handling, what kind of last past year profitability have we seen? Is it constant or there is lot of variation every year?

It is constant. It is only -- I think we'll only be growing the profitability because of our more knowledge and deeper understanding of the business as we proceed forward and use of more technology towards tracking of vehicles and better utilization of ash disposal. So we might see a little bit of a bump in the profit -- in the percentage of profit going forward.

The next question is from the line of Pranay Jain from DealWealth.

My question is with regards to the trends that we are seeing near term. Is this generally a period of good seasonality or we are seeing that things will only pick up from Q2 onwards overall across the segments?

Yes. Till about last year, I would say a lot was seasonal dependent. But I think with a diverse business which we are doing in various segments, I think we're trying to mitigate that by ensuring more businesses happen which are not seasonal -- season dependent. And we see that refrigerant gases will always be seasonal because most of the demand comes during summer. And in ash handling, there could be a little bit drop during the rain season when there are heavy rains in some of the states. But by expanding our work in various different states, I think we would be able to mitigate that seasonal risk.

So as we expand our footprint and utilize our capacities better, is there anything that you can guide for the next 1 or 2 years in terms of how the scale-up is going to look on top line and bottom line?

Yes. On the numbers, we can't comment the numbers. But like we did say that the ash and coal handling will grow at 30% to 40% CAGR, refrigerant roughly about 10% to 12% CAGR. And on the EV business, we think we'll reach about 5,000 vehicles by end of 2027.

Okay. And anything on the return ratios or margins that we are aiming?

Yes. Like I said, the margin currently, the EBITDA numbers will definitely get better from 12.5% -- like earlier, the ‘'22-'23 was about 10.04%, ‘'23-'24 is about 12.77%. I think it should go a little bit better and maybe we might have a few basis points higher in the current year with our efficiencies and learning of the industry.

All right. And lastly, anything as a tailwind we are expecting on the policy front or things are as good as they get presently?

No, things are good. We don't see any change in the policy. If it is, it is going to be the -- which everybody is going to talk about. So I think will always be good.

The next question is from the line of Nishant Sharma from Nuvama Wealth Research.

Just one question on -- a couple of questions from my side. One on the coal and ash handling. When you say the growth of 30% to 40%, this will be volume-led growth, right?

Yes, volume-led growth. We see that the prices are sustained now and, at these prices, we don't see big changes in the prices. In the ash handling, the contracts are more so increasing in prices only. Coal, we don't see a big, large difference in the prices from current prices. I think they've already bottomed out.

Okay. And if I look at the segmental margin from last year to this year, like on coal and ash handling, at the end of last year, we had done about INR 1,300 odd crore of sales and about INR 130 crores kind of EBIT. The same number, if I look at this year, over INR 945 crore of top line in coal and ash, we had done around INR 121 crores. So margins have expanded despite a correction in the prices. So is there any change from a contract point of view or this is purely led by what we call the operational efficiency or the mix change that has helped for the margin expansion?

That's majorly because of product mix, this one. Previous year, the coal part was more, I mean the 2023, and the ash was less. And 2024, the ash segment is more and coal is reduced. So coal -- this is again because of product mix, one of the major contributions. And again, the learning, which we are increasing our efficiency. We are correcting much more, increasing the efficiency. There are various other reasons. These are the 2 primary.

Sir, then how do we decide whether we should go for more on coal or go more for ash?

So the group's vision is also to move a lot more towards ash. Like I said, coal was more so because of cross-fertilization of logistics, the clearing of coal. But our focus is going to be more on ash because that's where we see large margin growth for the company. And also volume-wise, like I said, the current market for ash handling is upwards of INR 25,000 crores, which is completely unorganized. So the whole market opens up for us to look at our growth.

And how do we differentiate from, say, unorganized to organized? I mean, why one would go towards organized? Possibly because we will be charging a little bit higher compared to unorganized? Or what are the modes that we see that our company should come towards a company like us -- or customers should come to us?

What has happened over the years is most of this ash disposal has been through unorganized sector, and there's been no tracking of these ash where it is being disposed. What we bring on table to large companies and large corporate like NTPC, et cetera, is we bring a lot of tech on the table. Like we have a complete monitoring of vehicles, including using GPS. Every vehicle which is loaded is measured, how much of ash is loaded, where it is disposed, how much is disposed. And all this data is given back to NTPC. And for them, they need to file it back with the environment ministry. So this is what we bring an advantage. And obviously, being a more organized player, we provide processes and systems for which there are minimum accidents, minimum casualties in all this transportation, because they involve large trucks, et cetera. Safety and health is one thing which we always insist and take care of. I think these are all the major reasons why we have been working with them.

When you say dumping, where do we dump this ash? I mean as one or the other cement companies take the ash as a raw material, if I am not wrong. Where else...

There are multiple ways of disposing this ash. One is the, yes, like you said, cement companies are the major consumers of ash. The second is for highway construction, road construction, embankments on highways, mine filling, et cetera. These are all the various uses. Depending on the location of the thermal power plant and the amount of ash generated, it gets split into any of these disposal avenue, depending on what is happening around the power plant. Some of the ash also goes for brick-making, which is a very small value.

Right. So here, we make money from NTPC giving us for our disposing of ash, or we get money from selling this ash to, say, a cement company like UltraTech?

So it's a very interesting thing, like we answered this question earlier. It's a very demand-supply driven business. Sometimes both -- we also get paid from both the sides, cement companies and thermal power plants. Sometimes, it is only the thermal power plants which pays us money for transporting. Cement companies don't pay. So it's a very variable market, depending on the location and the demand and supply. There's no fixed rule for this anywhere in the country.

And is there -- I mean, do we have order visibility for this business wherein we get the one-year order visibility in advance, or is there a contract, or is there a tender which they run it and then we have to file those tenders, and then only we get to know what kind of numbers that we can achieve next year or something like that?

Most of the private companies have a 1 to 3-year contracts, and even the tenders which come from NTPC and public sector are between 1- to 3-year contracts. It could be -- most of them are one-year contracts, but some of them are a little longer contracts. So with this current, our order book is about INR 1,000 crores of coal and ash handling as of last weekend.

And this INR 1,000 crores would be executed in what timeframe?

Will be executed in the current financial year.

So generally, when we say, is there a possibility to achieve more than INR 1,000 crores, or this is the more of visibility that we have. During the year, we get more orders or something like that?

Yes, yes, 100%. This is just the order book as of today, and there are much more visibility which we see over the next few months. Every month now, there are a lot of tenders coming up, and they're also targeting new states, new customers. So this is just the order book based on last weekend, and it tends to grow much larger with this.

Moving on to the next one, on the, say, power trading, you mentioned that INR 500 crore kind of order book we have over there. Am I right in that?

Yes, you're right. Currently, we have tied up with a generator for close to about INR 500 crores of commitment of power from them, which we have -- in the power also put in some tenders with some of the discounts which we have currently run those, but that is also over a period of year. And again, this is the order as of today, and there's a potential of growing here also some more business to grow in this segment also.

But if I, again, compare with the last year to this year, though we have over INR 100 crore of incremental revenue, but the margins were almost flat, or rather in terms of percentage, it has declined. So what's the visibility that we see even if we do a INR 500 crore kind of revenue in power trading, our margins will be much better over there or will that be absolute number will go up?

I'll tell you, power trading, because it's a licensed play and it's a commodity, the margins are very, very thin. I think the margins could be less than like 1% in all of these. It is just the volume which could add up. And these are again -- all of these are because we are being -- we're just trying to get into maximum services with a power plant. We are trying to see how we can utilize the power under our power trading license, take care of the ash handling, take care of the coal requirement, and coal handling. All these services, we're just trying to see how we can consolidate into one power plant.

Okay. And this make sense. I mean refrigerated gas, again, the top line was higher, but we incurred a loss in this year. And even as you mentioned that the growth is like 10% to 12% only. So a loss-making business maybe this year might be a one-off, but growing 10%, 12%, will that make sense? Or is there any significant other synergies that we can get from this business, refrigerated gas for the other businesses?

So in this current year, there's a loss mostly because of the very frequent price fluctuation, and there's a 5% additional duty, which was imposed by the customs. So that was a one-time absorption of loss, I would say. But now it has been passed on to the customer. Going forward, we will not have this loss. And the growth about 10%, 12% is a very reasonably achievable number in this business. Similarly, the profit margins also will be upward of 6%, 7% as previous years.

Okay, last question for this, and maybe I'll fall back into the queue. There would be other participants also. There's one more segment, which is sale of services, where we have considerable revenue. What is this? And the margins are also very high in that segment. What does this include?

Sale of services, it is again a complementary business to ash handling, but that's not a focus for us. That's opportunity based. Whichever the plant we work, if we are getting an opportunity, which is helping us to get into the plant, sometimes we undertake to take that project. So current year, whatever done in the last year is going to continue. This is more of an operations and maintenance service for various power plants in India.

[Operator Instructions] The next question is from the line of [ Jignesh Dayal ] from Jiva Capital.

Sir, as you mentioned that you're taking -- giving a lot of services to thermal power plants and trying to get a lot of bouquet of services. But on the other hand, if we have contracts in ash handling with power plants, can we not have kind of confirmed orders long-term from cement companies also? Because they would also like to deal with organized players.

Yes, that is also a work in progress. Some of the cement companies do have long-term contracts with us. But going forward, like while we tie up for the ash with the thermal power plants, we'll also go tie up with cement companies for long-term contracts.

Okay. So is this a new system in the industry or it has been happening, this kind of long-term contracts?

Some of the -- most of them were a yearly contract. We've been trying to see if this could be 3 or 5 years contract. Some of the unorganized players have been doing spot business, I would say. Whichever unorganized player would put maximum number of vehicles, you would take the ash and go from there. It was never - most of the private players are still operating like this. It's only the last few years, last 2, 3 years is when the public sectors have moved to organize tenders and then process by which they want to give out these contracts.

Okay. So maybe we can take from government power companies and give it to big cement players?

It'll again depend on the cement player's location. If a cement player is very far from a government company, we cannot give him. He has to be located near a thermal power plant. Most of the cement companies in the past have been set up near the private power plants, more so because they thought it was easier to get ash from private players than government. So it's a viability. It's always a question of viability whether ash from a thermal power plant will be viable or not. So we take it as, as we get these contracts, we then, based on that, go backwards and work with the cement companies, roads, highways, or embankments. Wherever the best utilization could happen at the lowest cost for us, we need to go back and do that.

Okay. And in the last couple of years, out of total ash handling, the top 3 cement companies would have taken how much of the total ash that we have handled in terms of percentage?

Cement companies in terms of percentage?

Yes, nationally?

See, I think roughly, if you see, just to give some numbers, Gujarat Ambuja does about 5,000 tonnes a day with us, and UltraTech does about 3,000 tonnes, roughly about 8,000 tonnes. Out of our 35,000 tonnes we handle, about 25% is going to cement companies.

The next question is from the line of Vidya Shankar, who is an individual investor.

I'm very happy that during the last AGM when we proposed to [indiscernible] this was much before the next AGM. My questions are pertaining to the mission 2025 and vision 2030. If you can have some kind of a statement in this regard, it will really help us understand the overall direction of the management. And secondly, since we are getting into multiple revenue thrust areas, as a seasoned investor and risk assessment, what is the risk of this deviation from our core competency in terms of coal ash and refrigerating gas?

Thank you, sir. Thank you for this question. On the vision statement, it is very difficult to make statement today, but I'll definitely think and, before the next call, I will make 2 strong statements.

Yes, yes. It will be an ongoing exercise. So if we can have it before the AGM, I think it will be great.

Yes. We'll do that for sure. And currently on this, the question which you asked. If you see, like I said, even the electric vehicle business is more of a logistic business. We are only looking at logistics in a very large, sustainable -- in a sustainable way, where we're trying to see bringing our skills of managing the drivers, vehicles, bringing technology to the vehicles, bringing complete monitoring using a strong back office. I think these are all the strengths we bring into the business. So shift from coal and ash handling to an electric vehicle is not a large divert. It is just the product or the end-customer changes, but the process is very, very similar. And I think today, the way India is growing, the country is growing, every large organization will want to work in a very system driven and process driven manner for any of their activities, even more so from the sustainability and ESG compliance side. So I think we will only be contributing to that. And for us, getting into these various areas of logistics is mitigating risk of revenue from one of the sector itself. Like just for information, a few years back, everybody was saying that thermal power plant is not a great place of business to work, lenders would not fund. But then the whole thing changed over a period of time. So it's more so to mitigate risk we're getting into various of these activities, which are similar in nature, I would say.

True, true. Just like we look at diversification within our portfolio, the overall portfolio from a company's long-term standpoint, we would also like to have a little more diversification instead of single dependence.

[Operator Instructions] The next question is from the line of Nishant Sharma from Nuvama Wealth Research.

My next question is around the EV fleet size that we have.

You're not audible. Sir, you're not audible, sir.

Am I audible now?

Yes, it's better now sir.

So my next question is around EV segment where we have 2 categories if I have to classify them. One is a B2B where we are providing services to the large corporates for their employees from office to home services. So that would be more like a short-term or a longterm contract. What is the fleet size over there?

Just to give you an example, like Bengaluru airport taxi, that is B2C, is about 176 vehicles. The other 2, Bengaluru corporate employee transport is about 196 cars. And in Chennai, employee transportation is about 107 cars. These are B2B businesses. So the B2B contracts are generally long-term contracts, anywhere between 1 to 3 years contract. Large software companies, large companies are looking at a 3-year contract, and they are more advantage and beneficial for us also.

Right. So now getting into B2C airport taxi, because that would be more dependent on the traffic and as well as on the pricing side. And there, the 660 target that you mentioned is only for the airport taxi that we are catering or across all 3 segments that you just mentioned, that is the target?

No, sir, it is only the airport taxi. The tender which had come out from the Bengaluru International Airport Limited Company was to deploy 660 vehicles. They already were having ICE vehicles, the diesel engine vehicle for their airport taxi, which was using the first lane. They had about 660 vehicles over there. And the utilization of all these vehicles are, on an average, about 1.5 to 1.7 trips per day. This is based on the data available from the Bengaluru taxi in the past two years. And we only see -- the airport passenger traffic is only increasing with the new terminals. So I think 660 vehicles will be fully utilized for B2C. And the tariff for these are all -- in Bengaluru, the government comes out with tariff. These tariffs are all fixed by government. So whether it is any other company also will have to work within the same highest tariff given by the authority. The advantage what we have is our taxis will be in the first lane. And as soon as the passenger comes out, the first vehicle he sees is the airport taxis of the Bengaluru Airport, which is currently deployed by us. So the advantage of us getting a business is much more than anybody else who is in Row 4 or Row 5.

Okay, it's not the prepaid taxi that we generally book it from the airport, that is not. It's just directly you can enter and decide on that?

Yes, you can enter and decide. And this will again, most of -- these are again technology driven. We have an app, which you can also download, and pre-book if you want when you come to Bengaluru airport, similar to your other fleet services which you use. It can be pre-booked, it can be booked on the spot, or it can be booked through the app also, or at the counter at the airport also.

So it's a revenue share with the driver or the entire income and saving and the drivers are mostly on salary?

Currently, we are working on both the models where we're also having some drivers on salaries and some we're also working on revenue share. We're just trying to see whichever works the best for us. We're trying to ensure that the yield -- when you give a revenue share to the driver, the yield -- the higher revenue -- there's more potential to generate more revenue because he gets a better share. So we're working on both the models currently.

Okay. And last question from my side is on the CapEx requirement. As we are mostly focusing on expanding capacity across our business verticals. So what would be the CapEx requirements in maybe each of the vertical or at a console level? And how are we planning to fund those capital requirements?

Yes, so the total CapEx requirement for the current year, I would say, is roughly about INR 55 crores. And the INR 55 crores will be for all the businesses put together.

Majorly, it will be bank funded.

Yes, most of it will be bank funded.

Very less, capital intensity business.

Okay. And so...

[indiscernible].

Sorry, go ahead sir?

This is for the holding company and for the electric vehicle which we're talking about, when we talk about 2,000 vehicles in the current year, we're talking roughly about INR 130 crores of CapEx requirement there also.

Okay. And that will also be bank funded?

Yes, yes.

Okay. Even in the holding company, the requirement will be more for increasing the fleet size in ash and coal handling system, right?

INR 43 crores out of the INR 55 crores is going to go for the fleet size increase, INR 5 crores is for refrigerants and another INR 6.5 crores is for other corporate CapEx.

Okay, INR 43 crores plus INR 5 crores plus INR 5 crores.

INR 5 crores plus INR 6 crores. INR 42.66 crores plus INR 5 crores plus INR 6.5 crores.

Okay, and then your new company, Refex Renewables. So are you going to have any comments on this call or we have a separate call for that?

That, we'll have a separate call please.

Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Ms. Chandni Chande from Kirin Advisors for closing comments.

Thank you. Thank you everyone for joining the conference call of Refex Industries Limited. If you have any queries, you can write to us at [email protected]. Once again, thank you for joining the conference.

Thank you, everyone.

On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us and you may now disconnect your lines.