Refex Industries Limited (532884) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '25 Earnings Conference Call of Refex Industries Limited hosted by Kirin Advisors Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Samiksha Ramteke from Kirin Advisors. Thank you, and [indiscernible].

On 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 cum 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 evening, everyone, and a very warm welcome to Refex Industries Q3 and 9 Months FY '25 Earnings Conference Call. Over the years, Refex Industries has transformed into a diversified investment organization, consistently embracing innovation and sustainability at its core. First and foremost, I want to extend my heartfelt greetings to all of you on the occasion of the 76th Republic Day. It's a privilege to address you all as we collectively contribute to India's growth story. Before diving into the financial highlights let me take a moment to reflect on some of the significant milestones that have defined our journey this quarter, including a few material business highlights till today. Performance highlights. Turning our attention to company's financial performance for Q3 and 9 months FY '25, I'm slated to share that we have achieved robust growth across all business segments, underscoring the resilience and strength of our diversified business model. Let me start off with stand-alone results. Total income for Q3 FY '25 stood at INR 733.48 crores, reflecting a growth of 140.71% year-on-year. For 9 months FY '25, the total income increased INR 1,853.44 crores, showcasing a year-on-year growth of 77.7%. Net profit for Q3 FY '25 surged by 200.12% to INR 59.04 crores. For 9 months FY '25, net profit increased by 103.58% to INR 132.31crores. Earnings per share basic for Q3 FY '25 stood at INR 4.7, up 162.56%, while for 9 months FY '25 it is at INR 11, reflecting a growth of 86.44%. Next, we move on to the consolidated results. Total income. Consolidated total income for Q3 FY '25 has reached INR 741.92 crores, a 139.97% growth compared to the previous year. For 9 months FY '25 it grew to INR 1874.14 crores, up 78.38% year-on-year. Net profit. Consolidated net profit for Q3 FY '25 rose to INR 52.05 crores, up 198.1% and 9 months FY '25 it increased by 85.98% to INR 110.46 crores. Overall, the coal and ash handling business segment remained strong force behind the growth of Refex Industries, contributing to about INR 1,643 crores in 9 months FY '25 and INR 683 crores in FY '25 Q3 alone. Green Mobility is contributing to INR 22.2 crores for 9 month FY '25, highlighting the company's focus on sustainable and future-focused business initiatives. Green Mobility has also entered into a strategic arrangement with Gensol Engineering Limited to take over 2,997 E-cars from Gensol and then lease it to Blu-Smart. As we chart the path forward our focus is firmly on capitalizing our core strength with an unrelenting commitment to innovation, sustainability and operational excellence. Refex is poised to lead India's green transformation and drive meaningful change in the industry we serve. Every milestone we achieved stands as a testament to the trust and confidence of all our stakeholders and the unwavering commitment and dedication of our exceptional team. Together, we are shaping a future defined by growth, resilience and a shared vision for a sustainable tomorrow. Thank you for your continued support, trust and encouragement. Today -- together, we are confident in building a path forward for a long-term growth and consistent value creation. Thank you so much. I look forward to engaging in a discussion ahead with all of you. We can now open for questions. Please.

[Operator Instructions] The first question is from Krishan Choudhary, who is an individual investor.

Am I audible?

Yes. Not very clear, but yes, we can try and manage.

Okay. I'll try be a bit more clear, sir. I have a few questions, sir. So first of all, I would like to ask about the ash and coal handling business. In the previous con call, sir, we had mentioned that we had completed about 5 million tonnes of handling in H1. And the full year guidance was 18 million. So that comes to about 13 million for H2. So I would like to know, sir, out of the 13 million, how much have we achieved in Q3, and what is the estimate if you could give for Q4?

See, these are the strategic information. I'll give you -- anyway, I'll give you on -- the data on this. We have completed 8.5 million tonnes of the work, and we'll cross this year more than 10 million.

Okay. So for Q3, we have done about 8.5 million tonnes, right?

Yes.

Okay. And the -- okay, we'll surpass the given target also. That's great. And as I saw your presentation, sir, you have also increased the daily handling capacity from 50,000 to 70,000, sir. So sir, have we added new customers, new sites? And is this sustainable sir, in the coming quarters?

Yes. This current quarter is a peak season, and it is sustainable.

Okay. Great, sir. And sir, I would also like to know that we have been able to increase our revenues in this segment lot, sir, but the margins, sir, they are not increasing as generally when you increase revenues, the operational leverage also kicks in. But in our case, the margin has been stable to a little lower, sir? Is there any reason for that? And can we expect some improvement in the coming quarters?

We have started a lot of new plants, and initially, when we start a new plant, there is a mobilization of team happens before the real work starts in the plant, that is the reason overhead and other expenses will be more in the initial time, which get amortized once the full fledge work happens. Initially, the cost, which is incurred in the setting up of the new plant, I mean starting up the new work at each of the new plant because of that margin is kindly dropping.

Okay, sir. And since you put in initial investments, sir, so these would be long-term contracts, like approach how many years, if you could give a rough idea, sir?

Anywhere between 1 to 3 years.

Okay, sir. And secondly, I have a question regarding EV Green Mobility business of ours. So as we see -- yes, sir. So in this quarter the loss has increased from INR 5 crores to INR 8 crores, sir. So I just wanted to know, sir, when can we expect it to positively contribute to a net profit of this segment?

So I think with the increase of number of vehicles, the time taken to get 100% utilization of each vehicle takes almost 6 months. So as we are increasing the vehicles, we foresee this loss to happen at least for next few quarters. While operating operationally, we are profitable, but PAT level we are making loss. But in the next few quarters, we'll achieve profitability.

Okay, sir. And the recent acquisition about 3,000 EVs from Blu-Smart. So just I wanted to know what is the idea regarding how would we monetize them? Would we rent them out to Blu-Smart or will we use them for our own brand EVs? So what would be the [indiscernible].

They are a very strategic long-term dry operation lease model where we have taken over the vehicles from Gensol and we'll be giving it to Blu-Smart on a drive per month basis lease to us.

The next question is from Nishant Gupta from Minerva Global Capital.

Just wanted to understand what is the rationale of getting more CapEx heavy on the EV acquisition from Gensol? Basically leveraging your company and giving the OpEx benefit to Blu-Smart, so what is the rationale of acquiring that fleet? And what is the kind of IRR that you are expecting? And are these like the new cars that you have received from them or these were used and it has transferred at a lower price than the retail?

So currently, the vehicles are transferred at the book value to us. It's basically an inorganic expansion of our fleet. We're also looking at taking over the operations of these fleet forward. Slowly, we're going to start off with one city in a small number and our long-term aim is to convert this into a completely operational fleet under us. Just looking at the long-term dry, once the financial approval comes, we'll be able to come back on what is the IRR we are making on this. Currently, it is still under negotiation because the financial transfer has to still happen.

Got it, sir. And sir, you have taken INR 315 crores of bank loan for this. So is there any part of internal accruals that will also go for funding this acquisition of 2997EVs?

No. Currently, we're just taking over the loan fully, plus there will be a INR 40 crores of equity infusion in this apart from the debt.

Okay. Got it. And how long is the tenure with the Blu-Smart that you have negotiated in this?

Five years.

Five years. Okay. Sir, the next question is on the Torrent solar power. So this wind power project, what is the total amount that you will be receiving from Torrent Power, you mentioned the megawatt of -- but the contract size is not mentioned in INR crores?

I think that number is -- we are not supposed to disclose that value, only the megawatt is to be disclosed. The -- in this junction it does not allow us to disclose the value.

Okay. That's fair, sir. Sir, but you'll be executing it by 16th April '26. So the invoicing and the receipt of payment, I believe would be by -- maximum by May, June of '26 or that might extend later?

Can you repeat, please?

Yes. Sir, I'm saying from the invoicing point of view, whatever the amount that you'll be receiving. So you will be completing this project by 16th April '26, which is mentioned in the document. When will you be receiving the payments from this?

So this will be completed only by March next year -- April next year, sorry.

Yes, yes sir. I understand. But I'm just trying to understand how will the cash flows look like? Like is it kind of a lumpy payment which will come after the project is delivered in full, or you'll be receiving some milestone payment that is [indiscernible].

So there are multiple milestones. The first payment will start coming in from September this year.

Okay. From September onwards, it will come.But is it like safe to say that the majority of it will come after the project is completed?

Yes, just in a phased manner, I would not say a majority. At every stage wise, there are various payment milestones, there are totally about 7, 8 milestones. But every stage, there'll be payment, which will be coming.

Okay. Got it. Sir, one final question, so more from a long-term perspective, not on a quarterly guidance, but more from a long-term perspective, where can we see the growth rate in the topline and the revenues to -- and the margins to stabilize?

So I think on the ash and coal handling, the revenues will keep growing going forward because we're having a lot of contracts now, and we also see margins getting better over there, sir.

Sir, any comment on the number, because margins have been up and down. So maybe 10%, 10%, 11% is something we can see in the long-term, EBITDA margin to pan out?

Yes, around that.

The next question is from Rahul Gupta, an individual investor.

Sir, my question is, what role does technology play in the research of Green Mobility's operations, particularly in providing the EV services to corporates and aggregator platforms?

So basically, the technology helps us to scale up quickly, and we have our own in-house tech team, which is building this platform. Basically, the telematics is built in-house. So technology plays a very important role in growth, sir.

My next question is, can you provide the insights for the future research and development initiatives under the Venwind Refex Power Limited? And how will it be aligned with our renewable energy focus?

Yes. So we are still in the process of developing a plan for R&D. So hopefully, in the next 2 quarters, we'll be able to give a clear projection on what are the R&D plans for us.

Next question is from Vignesh Iyer from Sequent Investments.

Congratulations on a very strong set of numbers. So my question is on the fleet acquisition that we did from Gensol and give it to Blu-Smart to operate, so a few things I wanted to know. So if I understand, we have our own businesses, right? EVs, which we run. So what is the rationale of giving -- I mean, running the fleet on our own vis-a-vis giving it to Blu-Smart? Is our IRR coming on to be really good when we are giving it on lease to be Blu-Smart?

Sir we are a pure B2B player. Even in our regular EVs, we don't have any -- other than the Bangalore Airport, which we do B2C, all our other fleet is deployed for B2B. So even Blu-Smart is a very strategic B2B option for us where we have taken over the fleet from Gensol and giving it to Blu-Smart on a B2B basis, where we have a fixed revenue from this fleet. It is up to Blu-Smart to get customer acquisition, operate and et cetera.

Next question is from Deepesh Sancheti from Manya Finance.

What are the growth drivers ahead for the company coming for next year.

Sorry, can you repeat, please?

I'm saying what are the growth drivers for the company for the next year?

Yes. Like I mentioned that ash and coal is going to be our focus, where we already have multiple orders on hand, and we'll be growing business over there. And apart from that, EV fleet also is going to grow. As I mentioned earlier, this year, by March, we complete about 4,800 vehicles. So both these sectors will grow for us for next year also.

You said ash as well as EV sector, right?

Yes.

Okay. And I think recently, we raised capital from a number of investors. What has been the utilization so far?

So this is being utilized for the regular business, both in working capital and the CapEx requirement for vehicle EVs, et cetera.

So we haven't reduced any debt or anything with this?

We have reduced INR 150 crores of working capital and...

INR 150 crores of working capital is reduced?

Yes.

Okay. Because the ROE -- and what is the ROE expectation of the company going ahead maybe in FY '27? Will we get back to a 30% kind of levels? Or we will be still in the same -- I mean, right now, what we are saying?

Can you repeat that? I think you're breaking up completely. You said ROE, right?

Yes, I was asking about the ROE.

Yes, you mean for which year, current year?

No. I'm talking about ROE for FY '26 and FY '27? What is the expectation of the company?

I think we will be growing -- around FY '27 we could be somewhere around 20%, 22% ROE.

20%, 22%. So we don't see ROE again coming back to the FY '23 levels of 30%, 35%?

Because the business growth is offset, if you see the PAT levels are growing and the order side -- and the revenue size has also increased a lot. Capital size also has increased a lot, capital base.

And the PAT margins also, we expect at around 7%, 7.5% only going ahead?

I think it will go up to 10% going forward, between 8% to 10%.

Between 8% to 10%. So what are the challenges, which we see going ahead? Are there any particular challenges in terms of environmental clearance or any other things which we see?

No, I think scale is the only challenge for us because with the number of contracts growing, we have to really build a strong team to scale. We don't have any environmental issues, et cetera. Instead we are the company who are helping the power plants achieve the environmental compliances. For us, scale is the only challenge.

Scale is the only challenge. So the orders are there, but only the execution is the main challenge, right?

Yes.

Okay. So I mean, if that is so, what -- in execution, it's only about the team or it's also about the money which is going to be needed?

Currently, we have enough money. It is only the team we need to [indiscernible].

Okay. And what are we doing about that?

We've already hired, we have doubled our number of employees in the last 6 months, and hopefully, we should be able to hire better people and more people by end of next quarter. Currently, we are at 413 people from 296 last quarter.

We've seen a phenomenal sales growth in the ash and coal handling business, do we see the similar kind of growth going ahead next year?

Yes, yes. I think we see better growth going ahead next year.

If you can quantify it in terms of number, I mean what kind of...

We haven't made any number quantification yet, but yes, the growth will be good.

Is an expectation of around 20% to 30% of growth will be reasonable?

We cannot comment on that now.

I mean, anywhere around 20%? I mean, is that okay? I mean -- or we are expecting more?

No, we have not been making any forward-looking numbers yet. But yes, we will see how to formalize this and bring it to shareholders to notice.

Okay. So the growth which we have done up till now, will that be in the same lines? I'm just trying to take it out from you...

Yes, yes, we're growing.

The next question is from Krishnan Choudhary, who is an individual investor.

So I just have a follow-up on the coal and ash handling business. So sir, previously, you had mentioned that there is some push from the government regarding the disposal of legacy ash also in the water bodies if I am right? So is there any update or progress on that, sir?

Sorry, can you repeat your question? We can't hear you.

Sir, previously you had mentioned that there is a push from the government regarding the disposal of legacy ash also in the ponds and water bodies, so is there any...

That rule is the still there, and it is continuing. There is no change in the rule.

So have we seen some on-ground execution of that, if you talk about that...

Yes, yes it is being seriously implemented by all the power plants including all the government power plants.

Okay. So we are currently doing that also, sir?

Yes. Because of that only business is happening.

Okay. And sir, regarding the power trading business, sir, so why is there such variation in the quarterly numbers? Is it because of the seasonality factors in that particular segment or what?

We are not focusing more on that now because the margin is too low and we have a good opportunity in other businesses, and our concentration is there in this businesses where higher margin is there. Power trading agreement will not be a focus further, and we'll be continuing focusing on the other businesses.

Okay, sir. And regarding the newly incorporated subsidiary, when will Refex Power Limited, so how do we plan to use that? Like we have already given 1/3 of the equity to outside partners, so how would that benefit to our main company service?

No, that is a synergy. And we have both -- that is the reason we have brought an expert into the -- as a partner, and we'll be working together for a growth of the business.

Okay, sir. And my last question, sir, like we have multiple businesses. So are we planning some sort of a demerger in the coming years? Or have you looked on that, sir?

No, we have not planned anything now, but we'll come back if we have plan of something.

Next question is from Deepesh Sancheti from Manya Finance.

Just a question regarding your segmented results when I was seen in the segmented results and profit and loss before the interest and tax, there is something mentioned as corporate. If you can just elaborate on that?

Sorry, what? Which one, can you repeat, please?

In the segmented results of the consolidated one. There is something mentioned number 2, of corporate?

That is the corporate overhead, which is not eligible to any of the specific segment.

The corporate overhead, right?

Yes. These are the all corporate expenses, which is not directly identifiable to any segment.

Okay. So I mean, the sudden increase, can I allocate it to the increase on number of people, which you just mentioned...

Yes, multiple factor, number of people, there is a technology advancement is happening, there is a technology expenses because we are -- since we are scaling, there is a development of technology, implementation of new technology is also happening. There is -- I mean, because of the people, there is a multiple offices are being set up. Multiple things are there, which is not directly identifiable to any specific segment.

Okay. Okay. And if I...

Which is directly identifiable, has already been allocated to specific segment.

If I can come to your EV business. I mean, how does your EV business work? I mean you take -- you give the cars to Blu-Smart and Blu-Smart hires it to the corporates? How does that business work?

Blu-Smart is a B2C player. We have a B2B business where we give vehicles to large corporates for their employee transportation. We do more technology and the vehicle for that. Blu-Smart is a dry lease where we've give only vehicles to Blu-Smart. They will have their own drivers and operations, and they will do it for B2C. They will -- customer acquisition will be their scope. So for us, it is a B2B2C for Blu-Smart. And all other customers are also direct B2B.

Okay. So B2B clients are ours, right?

Yes.

And Blu-Smart, we have a stake in them, and that's where all the B2C happens from the Blu-Smart?

No, no. Blu-Smart is also a B2B customer for me. For me, Blu-Smart is a customer to whom I'm giving vehicles on long-term dry operational lease. I have no obligation to get any customer there. And we don't have any stakes also.

You don't have any stake in Blu-Smart?

No, we don't have.

Okay. The company or the promoters don't have any stake in Blu-Smart, right?

Yes, the company doesn't have, yes.

What about the promotors?

Promoters don't have. Promoters through one of their funds have a very small stake, which is very negligible, less than 1% -- less than 0.5%.

And how do we plan to scale this business?

We are continuously getting more and more B2B customers. So we are -- our focus is going to be B2B customers only.

And if you can just mention how -- I mean how -- for how long are these contracts? I mean, does the vehicle life...

Between 1 to 3 years and Blu-Smart is 5 years contract.

One to three years, okay...

B2B contracts are between 1 to 3 years.

One to three years. And what is the margin profile in that?

So it depends. Different customers have different way in which we build them from our trip basis, some are monthly, some are number of hours, number of kilometers. On an average, we have close to about 20% gross margin on them.

Yes. Because -- I mean, something, which was -- I mean, since our coal and ash businesses doing so well, I mean, why would the company actually go into EV business? And that was one of the question that how do we plan to scale it? Because...

It is in a subsidiary company, and this business is growing as a subsidiary company directly. And again, if you look at our coal and ash also, it's a logistics business, where I'm only moving the ash and coal from one place to another, I'm doing logistics work. Similarly, EV is also a logistics business for me. Yes, I mean it's a complete operational. So the expertise of our operational efficiency can be at both the places. I mean, they are in line with our original business.

So all these big corporates which we give, are we giving them with the drivers, I mean, for handling the stuff? Or it's only that we're giving the cars?

No, for all the B2B customers, we have drivers, which -- we have our own driver, and we operate the car for them, we do charging, et cetera, everything for them.

Okay. So basically, it's like a fleet management?

Yes.

Next question is from Swaraj Gandhi, who is an Individual Investor.

My first question is, can you provide insight into your capital...

We can't hear you, sir. We can't hear you.

Hello. now?

You're not very clear.

Now am I audible?

You are not very clear, can you re-dial please.

Mr. Gandhi, if you're on hands free request you to use the handset and try, we can't hear you. You sound very low and muffled.

Okay. Hello now, now it's better?

Can you dial-in again, please? I think we can't hear you, sorry. You voice is very muffled. Yes, Kirin's team, can you ask him to dial again? We can't hear anything.

Mr. Gandhi we request you to rejoin, disconnect and call us back maybe from a different number. We'll go to the next question. The next question is from [indiscernible].

Yes. Basically, I just wanted to know that as you're already answer about this, but then going forward...

You're breaking up, please?

Am I audible?

Yes, you are audible now.

Yes. So I just wanted to understand the scope in the coal and ash handling considering the government focus on clearance and also the need of ash by the construction industry, that is one. And secondly, as my previous colleague maybe asked this question, but then when we can see this margin settling upon 11% or 12% overall?

So as we told earlier also that ash and coal business is something which will continuously happen because thermal power plants are here to stay, the coal will be burnt, ash will be generated. While there's enough legacy ash for the next -- few years. Regularly, ash has been again generated and not being able to dispose of on time, they go back and get filled into those ponds. So this business, I think, will be sustainable and continuously growing from here on for us. The margins, I think, in the next 1 or 2 years will get settled between 8% to 10% for us.

Okay. So we are looking only up to the 10% and excluding beyond 10% as we are already -- in earlier quarters, we have reported, sir?

Earlier quarter it was [ 14% ].

Next question is from Deepesh Sancheti from Manya Finance.

Couple of follow-up questions. One, are we planning to take the EV business pan India?

Yes, we are currently operating in Bangalore, Hyderabad, Chennai. And with Blu-Smart we'll be also at Delhi, we have also started some trial in Pune and Mumbai. Wherever there are large B2B customers, we'll be moving -- we'll be taking our business over there.

Okay. And as far as soda -- sorry, for the coal handling and ash handling, do we have -- I mean, are there any listed competitors? Or are there any competitors for us?

No. There are no listed competitors. There's one competitor by name, Ashtech, which is an organized player, apart from that, most of the players are unorganized.

Okay, Ashtech. And otherwise, there's only unorganized players, which you are competing with, right?

Yes.

So we posed a significant advantage over there?

Yes, we have a lot of advantage over there.

I just wanted to know that?

Sorry?

I mean what is our moat that we have a significant advantage over the competition?

We have multiple [indiscernible], that is the only reason all the power plants prefers to work with us. One, we are 100% compliances, we take care both in terms of the labor compliances and also other safety compliances with respect to the drivers who operate. And also their all medical, ESI, PF, complete compliances. Then on the technology, we provide also the technology like 100% GPA for each of the disposal trip, 100% we have. We have a control center to monitor each of the disposal. We provide all compliances to each of the power plant where we work, under the USP we carry compared to other competitor.

So how big is this market of ash and soda handling? And what's the market share right now, which you're having?

Very, very small. It is one of the large markets. In earlier call also Mr. Anil has spoke.

Yes, I think there are totally over 175 thermal power plants across India, and we are operating in less than about 30 plants currently. And even in these 30 plants, we are like one among those few operators, unorganized players. We are only now entering into these thermal power plants. So the opportunity is very, very large. And again, I think close to about 1.7 million metric tonnes of legacy ashes available which has to be disposed of. And every year, we are generating close to about 800 million tonnes of coal is being burned. So close to about 300 million tonnes of ash is being generated every year.

Next question is from Mehul Shah from Samarth Capital.

My question is could you provide insight into your capital allocation strategies...

Can you be a little louder please?

Hello, now it's louder?

Yes.

My question is could you provide insight into your capital allocation strategies especially with ongoing and upcoming investment in Green Mobility and Power Trading?

So for Green Mobility, we have assumed we'll be investing close to about, just one second. Can you hear us? Hello?

Yes.

So currently, I think we'll be investing close to about INR 200 crores in our subsidiary for electric vehicles and green mobility business. And we require close to about INR 300 crores, INR 350 crores of working capital for our ash handling business.

Okay. And how it reflects the green mobility operationally preparing to integrate the newly acquired like to 2997 EVs, and what challenges do you anticipate during this transition?

It's a very clear dry lease -- long-term dry lease by operation lease with Blu-Smart. We don't foresee any challenges in this. It's a clear monthly fixed payment, which we'll receiving, and it is waiting for financial and regulatory approvals.

Okay. And my last question is, what measures are being taken to improve the efficiency and sustainability of the ash and coal handling segment?

We have become one of the largest organized player in the country today. So I think this business is only going to grow from here. If you can see from earlier last year, we were operating in 4, 5 power plants to 36 power plants, that itself can show the kind of growth we have seeing and the opportunity lying in front of us.

The next question from [ Dipen Parekh ], who is an individual investor. There seems to be no response from the line of [ Dipen Parekh ]. The next question is from [ indiscernible], who is an individual investor.

Am I audible?

Yes, you are audible, sir.

Yes. First of all, I'd like to congratulate the management for giving a spectacular result. I've been an individual investor in this country since the last 3, 3.5 years, so I'm very thankful to you all for creating abundant wealth. I have a couple of questions. Firstly, I wanted to know the breakup of coal and ash handling. Like how much percentage of revenue goes for coal handling? And what is the percentage for ash handling?

Because most of our logistics have done in 2 ways, we're not able to exactly break the exact revenue from each of this, but we are working on that. Hopefully from -- maybe 1 or 2 quarters down the line, we'll be able to separately segment this also [indiscernible].

Right, right. Because in one of the filings, you had mentioned that you are more trying to increase your dependency on ash handling and slightly reduce the coal handling. Is that right or...

Yes, you're right.

Okay, fine. And one more thing. The -- in the last investor PPT, the number of daily tonnes per day was 50,000. Now it has been increased to 70,000 metric tonnes per day. So I'd like to know whether the same kind of growth can we expect in the coming quarters and the years or it will be stable? Because H2, we were supposed to do 2, 2.5x of H1. Can we expect a similar kind of growth trajectory in the coming quarters?

Yes, I think next quarter, we'll be able to achieve this kind of numbers because we have already scaled up to the 70,000 tonnes per day. But I'm not sure if this will be -- the number will keep growing from here. So, yes we'll be able to achieve this.

Yes. And one more question. In your investor PPT, you have mentioned the states in which current ash handling is going on. It is roughly around 10 to 12 states. And you had also mentioned that you were going to add like 10 new states. So how much penetration can we expect in the Q4 from 12 to how many number of states can we enter in the coming quarters, like say, in next 1 year?

See, we'll be covering majority of the states in another 6 months' time, not this quarter alone. Currently, we have a -- in this quarter also, we have started 2 new plants -- 2 new states, and already confirmed order is there in another 2 states -- 2 new states in this quarter. And out of the total states in India, few states do not have a thermal power plant. Anyway, we cannot touch that states, especially in the Northeast. But we'll be covering the majority, almost all the states in India in another 6 months' time.

The next question is from [ Dipen Parekh ], who is an Individual Investor.

Is my voice is clear?

Yes, it is clear sir, go ahead, please.

So almost all the questions have been asked, but just to know whether we are working anywhere for the green hydrogen ecosystem like many big corporates are about to start their production for green hydrogen things. And do we have any kind of planning in future to supply materials, electrolyzers or anything and to be a part of...

We don't have any plan for green hydrogen sir.

Sir. Anything...

We don't have any plans for green hydrogen sir.

Next question is from [ Jairaj Jain from JJ Capital ].

So my first question would be like can you...

Sir, your voice is very low. Can you be a bit louder, please?

Hello, can you hear me?

Yes, it's -- if you can...

Am I audible?

Yes, it is audible now.

So can you elaborate on the strategic rationale, like you can say about beyond your acquisition of around 3,000 EVs from Gensol, and how will the company position in the electric vehicle ecosystem?

Likely, I have told multiple times on the call today, that it is a long-term dry operational lease where we have acquired the vehicles from Gensol and giving it to Blu-Smart. As a company, we are a B2B operating company. So this is also a B2B transaction. This is waiting for regulatory and finance approval. Once this is done, we'll be ready to operate these vehicles.

Okay. And you would be knowing that the budget will be coming soon. So are there chances of any upcoming regulatory changes or policies in the power or mobility sectors that might impact your business operations?

No, no, nothing will impact us. We're only a fleet operator.

[Operator Instructions] Next question is from Priya Jain from Green Capital.

Am I audible?

Yes, please go ahead.

Firstly, congratulations for a good set of numbers. So my question is, actually, I just wanted to understand how does Refex plan to mitigate risk associated with coal procurement and ash disposal given the environmental challenges?

So we are only helping the thermal power plants achieve the environmental compliances. By removing the ash from the thermal power plants, we're helping them to reduce the legacy ash and the ash which is generated is being disposed in an environmentally safe manner. So we are only an environment compliance company for them.

Okay. Sir, one more question, like could you shed some light on the competitive landscape in the green mobility segment, and how Refex green mobility differentiate that?

Yes. correctly, we are a B2B segment. Our major competitor would be lithium and [ Snapdeal ] and [ ECOS Mobility ]. They operate also B2B for B2B customers in electrical vehicles in different states.

And so just wanted to understand that are there any upcoming regulatory challenges or changes of policies in the power and mobility sector that might impact your business operations?

No, we are only a fleet operator, so we don't see any regulatory challenge for this.

I have one more question. Like how does the Refex Industry plan to balance growth in its diverse business segments while maintaining a strong focus on sustainability?

So I think all our businesses are focused on sustainability. If you look at electric vehicles, ash handling, et cetera, and all these businesses are growing independently. So I think there growth is going to happen continuously.

Next question is from the [indiscernible].

Yes. So first of all, congratulations for the management for presenting a good set of numbers. So I have a question that as I can see, there are majorly 4 businesses, right? And as you mentioned that you will be less focusing on these power trading business, right? So is this good to assume that we can remove that business going ahead? And I can also see that very less number of interest in the refrigerant gas business as well, right? How is it like for these 2? I think we are majorly focused on ash and coal handling and this green B2B business.

Yes, our focus is majorly on ash and coal handling and green mobility. Other businesses are going on, but the growth for them are very limited. Power trading is a very low-margin business, so we have not been focusing much on that. Refrigerant gas is also very limited market, so the growth is very limited in that.

Okay. So my next question is like you mentioned that you are majorly in the logistics segment, right? So is it like -- are we excluding any other good businesses in the same segment where we move the things from point A to point B? Anything...

No, we're not looking at anything like that, sir.

The next question is from Rahil Kothari from [indiscernible] Research Partners.

Sir, one of my question is what is the current order book in coal and ash handling business? And second one is one of our earlier con call, you said the growth of coal and ash handling business, we will be growing 30%, 40% CAGR for next year. So do we still hold that growth guidance?

Yes, we are still holding to that growth. And currently, the -- on the order book size, we have not reported the order book in the -- to the exchanges. So yes, we have a very strong order book in hand, sir.

Okay, sir. And sir, last question is my -- sir, what is the next few years, '25, '26 around guidance -- growth guidance?

I think we will be growing at the same pace what we have mentioned earlier, and we are confident of achieving that, sir.

And sir, one last question. Sir, revenue from the top 3 or top 5 customers in terms of total revenue, it was 70% in FY '25 annual report?

Sorry?

Sir, revenue from top 3 or top 5 customers in terms of total revenue, it was 70% for FY '24 annual report?

No, sir, we've diversified the revenues.

Yes, sir, revenue, in annual report is it mentioned?

Last year. Yes, yes.

Yes, sir.

Yes, yes. Current year, the revenue will be very diversified, sir.

Next question is from Komal Iyer from NBG Investments.

Could you explain your rationale for supplying the power wind projects for Torrent Power? I mean what is the rationale of getting into that business because that does not sink with any of your other businesses?

So it is an opportunity we got for the renewable wind anergy business. That's why we set up a separate subsidiary under which we are trying to do this business. We see the opportunity in renewable energy is going to be very large. So we are working on this, and we've got a good partner who can -- a good technical partner who can help us grow this business.

But you would just be doing the part of transportation, or you'll be working as an EPC for this wind power project?

No, no, we'll be only supplying the -- we'll be the OEM supply to the turbine.

Only the OEM supplier. So it will be a kind of trading business from you from where you will be procuring the equipment and then supplying to Torrent Power -- transporting to Torrent Power, right?

Yes.

Okay. And what kind of return are you expecting in this kind of business?

Maybe a gross margin of roughly about 8%, 9%.

Next question is from Rohit Kumar, who is an Individual Investor.

We can't year, sir.

There seems to be no response from Rohit Kumar. We will move to the next question. Next question is from Krishnan Choudhary, who is an Individual Investor.

I have a question regarding the trade receivables, like in the previous quarter...

Can't hear you, sir. Can you be a bit louder, sir?

Yes, sir, I have a question regarding the trade receivables. In the previous quarter, there had been a considerable jump in the trade receivables. So I understand because of the increase in revenues. But can you give some highlights regarding what is the cash conversion cycle for this revenue?

Earlier also I had explained receivable to collection cycle. Any billing for a particular month certification and other things happens takes around 20 days. After that, again, a checking process and some of the billing process finalization happens which takes 7 to 8 days with collections -- some of the collections comes in 30 days, some takes 60 days, some of the collections takes 65 to 70 days. Anywhere between the 90 to 97 days is the current collection revenue to collection cycle.

Okay, sir. And one more question, sir. You have mentioned that you have a segment of solar power also. So what do we do in that? Like we have minimal revenues from that? And what is the future outlook you have on this segment, sir?

No, there's only one solar power plant, which we've been having for many years where the PPA is signed with the DISCOM, so we are not planning to add anything over there.

Okay, sir. And -- so this would remain constant with revenue that we are currently getting will be similar lines, sir? Can we expect?

We have PPA for many years. So another 12 years PPA is pending. So this revenue will keep coming for the next 12 year.

The next question is from Aman Sing [indiscernible] from ProfitGate Capital Services.

Am I audible?

Yes, you are audible. Please go ahead.

Congrats on a good set of numbers. Actually, I joined the call a bit lately, you can skip to answer the question, I'll read the transcript. So I was trying to figure out a little more about the deal that we have done with Gensol Engineering regarding the EV. So it was already leasing -- it was already leasing to Blu-Smart? And now we have bought the EVs and release to Blu-Smart. So how are we making this transaction worthwhile for the company, I wanted to understand the comment?

So for us, it is a very clear long-term dry operation lease. And we have acquired the vehicles from Gensol, and we'll be giving it to Blu-Smart only. So for us, it will be a monthly payment of lease rental for these vehicles. And it will be a responsibility of Blu-Smart to operate and run these vehicles and acquire customers also. There is still a financial and regulatory approval pending from the lenders. Once that approval is done, this revenue will start kicking into our books from next quarter onwards.

But before the deal Gensol was already using some of its vehicle to Blu-Smart directly. Now they are routing this through us -- through our company. So I wanted to address the rationale for not directly leasing because the promoter for both the Blu-Smart and Gensol is the same, right, similar promoter group. So why not lease them directly and route it through us? What will be the ROIs or ROEs that we'll make in this project, right?

So we are not sure about their understanding. But yes, we will have a very substantial ROE for this. Once the financial and regulatory approval comes there will be substantial returns for us. And we being a B2B player, for us, we'll be encouraging more and more of these opportunities where we can acquire vehicles and give it to B2C operators so that our income, our revenues are fixed and we don't lose our burn money.

So these vehicles are already running, the 3,000 vehicles are already running on the road?

Yes, they're already running on the road, sir.

So once all the financial and regulatory approvals are in place, what would be -- so we lease it directly to Blu-Smart. What is the revenue that you can recognize in the first month after -- first month of full leasing or first quarter of full leasing to Blu-Smart?

Only after the financial approval and interest rate et cetera, we'll be able to determine that, sir.

No. But we would have some revenue assumption, right, before making the deal?

I understand that would be...

Some revenue assumption revenue guidance would be helpful.

Yes. I mean, we cannot give that today. Once the transaction is closed, we'll make this public sir.

That was the last question in queue. I would now like to hand the conference back to Ms. Samiksha Ramteke for closing comments.

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

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