Refex Industries Limited

Energy — Thermal Coal · NSE

₹256.45−₹4.95 (−1.89%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a beta above 1.3, so it swings harder than the index.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:47 pm

Understanding the Business

Company site ↗

The 60-second version of Refex Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Refex Industries Limited engages in handling and disposal of fly ash in India. The company engages in solar power generation and related activities; coal trading; and providing coal yard management services and solar module trading.

IndustryThermal Coal

SectorEnergy

Employees522

Annual revenue₹2,275 Cr

How does it make money?

Turns over ₹2,275 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 522 employees supports ₹4.36 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.36 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 13.5% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.4%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +41% while net margin moved +25% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+41%

Margin effect+25%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Beta of 1.72 — amplifies market moves in both directions
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

67/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

12.5x

3Y Median

24.6x

40 monthly readings · mean 29.0x · range 9.8x–67.3x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 49% below its 3y median of 24.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 81% above the peer median of 6.9x.

vs. its own history

Cheap

24.6x median over 40 months · -49%

vs. sector peers

Expensive

6.9x median of 4 peers · +81%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.7x

PEG

0.61

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 10.7% to 18.0% over 3 years.
High return on capital employed
ROCE of 22.5% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 36.9% to 13.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 39.4% to 22.5% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹149 Cr to ₹225 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 279% against revenue up 41% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 603% against revenue up 41% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 24% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 10.7% to 18.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 49% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 279% against revenue up 41%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 81% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 36.9% to 13.5%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 12.0% CAGR
Latest reported year was 139.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹93 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 20%✓ 22.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹3,519 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.5x

Cheap

Cheap against the generic band

P/B Ratio

2.34x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹20.58

Profitable

Profitable on a per-share basis

ROE

13.5%

Moderate

Moderate capital efficiency

ROCE

22.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

139.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

207.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.78%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹93 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.0%

Average

Average margins

Net Margin

8.7%

Average

Average bottom-line conversion

Current Ratio

2.04

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.72

High swing

Swings more than the market in both directions

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

270.1 / 279.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

29.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,618 Cr	₹1,377 Cr	₹2,252 Cr	₹2,275 Cr	+12.0%
EBITDA	₹174 Cr	₹148 Cr	₹239 Cr	₹410 Cr	+33.2%
EBITDA Margin	10.7%	10.7%	10.6%	18.0%	—
PAT (Net Profit)	₹116 Cr	₹94 Cr	₹159 Cr	₹203 Cr	+20.6%
EPS	₹10.77	₹8.36	₹12.33	₹15.07	+11.8%
ROE	36.9%	20.2%	13.1%	13.5%	—
ROCE	39.4%	22.9%	17.2%	22.5%	—
Total Debt	₹149 Cr	₹215 Cr	₹286 Cr	₹225 Cr	+14.6%
Free Cash Flow	-₹44 Cr	-₹48 Cr	-₹469 Cr	-₹93 Cr	—

🟢 Revenue has grown at 12.0% a year over 3 years.

🟢 EBITDA has grown at 33.2% a year over 3 years.

🟢 EBITDA Margin has risen from 10.7% to 18.0% over 3 years (+7.3 pts).

🟢 PAT (Net Profit) has grown at 20.6% a year over 3 years.

🟢 EPS has grown at 11.8% a year over 3 years.

🔴 ROE has fallen from 36.9% to 13.5% over 3 years (-23.4 pts).

🔴 ROCE has fallen from 39.4% to 22.5% over 3 years (-16.9 pts).

🔴 Total Debt has grown at 14.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,843 Cr

Total Liabilities

₹1,334 Cr

Cash & Equivalents

₹184 Cr

Operating Cash Flow

₹107 Cr

Capex

-₹200 Cr

Shareholding (proxy)

Institutional Holding

0.5%

Insider Holding

25.6%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

24 Jul 2026

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

2 positive1 mixed3 general

Refex Industries Share Price

Upstox, 16 Oct

Refex Industries (REFEX) Share Price Rises 8.54% Today; Valuation and Sector Context

Univest, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Refex Industries (NSE:REFEX) Strong Profits May Be Masking Some Underlying Issues

Simply Wall Street, 02 Jun

Refex Industries Promoter Purchases 10 Lakh Shares via Open Market to Increase Stake

Sahi, 01 Jul

Refex Industries share price jumps 4% on Rs.160 crore order win ahead of board meeting | Check stock performance

TradingView, 21 SeptOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Refex Industries (REFEX.NS) Trades Flat at ₹271.3 as Range Boundaries Take Centre Stage - Dividend Arbitrage

https://www.siam.in/, 05 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑