Refex Industries Asset Takeover Update, HBL Engineering Order And Tejas Networks PLI Scheme Grant

Refex Industries Ltd.

Recent filing: (ASSET TAKEOVER UPDATE) Refex Industries had earlier proposed the takeover of 2,997 electric vehicles (EVs) from Gensol Engineering. After discussions and careful consideration, RGML and Gensol have mutually decided not to proceed with the transaction. This decision was made due to changing commitments on both sides, making it challenging to complete the deal within the planned timeline. As a result, both parties have agreed not to move forward with the transaction at this time.

FUTURE OUTLOOK: As per Q1FY25 Investor Presentation, Company is entering into MOUs and alliances with industry associations and environmental organizations for collaborative sustainability initiatives | Company is investing in R&D efforts to explore innovative technologies and processes for ash recycling and utilization, aiming for a revenue growth of 2X through these strategic initiatives | Company will focus on increasing its fleet size to 5,000 EVs by end of FY27

Mcap of INR 5,066 Crore (share price = INR 391 / share) (as on 1 April‘'25)
TTM PE 35.2x (as on 1st Apr ‘25) Retail float = 25.4% (Dec-24)

FOOD FOR THOUGHT: Presence of high counterparty risk in the revenue profile

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Question 1: Who are the promoters of Refex Industries?

Refex Industries is the first mover in the Refrigerant Gas Vertical. It has an expertise in the manufacturing & refilling of refrigerant gases, replacing chloro-fluoro-carbons. It recently incorporated a wholly owned subsidiary named 'Refex Green Mobility'. 'Refex eVeelz' is the subsidiary's brand. Refex eVeelz is one of India's all-electric 4-wheeler fleetss, providing an eco-friendly and environmentally conscious transport solution to corporate employees and other commuters. It offers a 100% EV fleet, drivers, infrastructure, and technology. The company is also in the space, offering services to power plants like handling and disposal of Fly Ash, round-the-clock services for coal yard management, crushing of uncrushed coal, and Coal trading to power plants.

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HBL Engineering Ltd

Recent filing: (ORDER) The Central Railway has awarded 5 Letters of Acceptance (LOAs) to HBL for implementing Kavach across 413 stations, covering a total of 3,900 km. The combined value of these contracts is INR 763 Cr, and each contract is to be completed within 18 months.

SUMMARY: 4y Operating Profit uptrend | PE 44.5x (Sector PE range 30-70) | Capital Goods – Electrical equipment

FUTURE OUTLOOK: As per the FY24 Annual Report, FY 25 sales may be about the same as FY 24 because; no Kavach tenders were issued from Feb 2022 till 6 August 2024 | FY 26 sales may be 30% more than FY 25 sales, because Kavach tenders were issued in August 2024 | FY 27 and FY 28 may have compound growth in sales at about 20 % a year over FY 26.

MCap of INR 14,676 Crore (share price = INR 529/ share) (as on 1 April‘'25)
TTM PE 44.5x (as on 1st Apr ‘25) Retail float = 27.5% (Dec-24)

FOOD FOR THOUGHT: Working Capital Intensive Business

Stock price can go down or up based on market forces. Always diversify your portfolio.

Question 1: Who are the promoters of HBL Engineering?

HBL is a company that creates advanced products to meet India's technology needs. For over 40 years, they have worked in industries like aviation, defense, railways, and energy. One of their key achievements is developing railway safety systems to improve Indian Railways' security and capacity. HBL now focuses on electric vehicles (eMobility), providing India with locally made motors and batteries for eco-friendly transport.

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Tejas Networks Ltd

Recent filing: (PLI SCHEME GRANT) Tejas Networks has received INR 189 Cr from the Ministry of Communications, Department of Telecommunications, New Delhi, under the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products. This amount represents the first tranche, which is 85% of the incentive for the first two quarters of FY25. The remaining balance is expected to be released later, per the PLI Scheme guidelines.

SUMMARY: 3y Operating Profit uptrend | PE 21.2x (Sector PE range 30-60) | Excellent Dec-24 results Orderbook of INR 4,845 Cr (Sep-24) | Institutional entry | 5G

MCap of INR 14,103 Crore (share price = INR 797 / share) (as on 1 April‘'25)
TTM PE 21.2x (as on 1st Apr ‘25) Retail float = 15.66% (Dec-24)

FOOD FOR THOUGHT: Negative operating cash flow for FY24.

Stock price can go down or up based on market forces. Continuously diversify your portfolio.

Question 1: Who are the promoters of Tejas Networks?

Tejas Networks designs and manufactures high-performance wireline and wireless networking products for telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries. Tejas Networks Ltd. is a part of the Tata Group, with Panatone Finvest Ltd. (a subsidiary of Tata Sons Pvt. Ltd.) being the majority shareholder.

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