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deveshkayal
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Quote deveshkayal Replybullet Topic: Refex Refrigerants
    Posted: 30/Dec/2007 at 6:56pm

Refex Refrigerants -Targetting 10 times revenues in 3 yrs!

Refex is the only player in the country which has the distinction of refilling and marketing hydrofluorocarbons, which is a non-ozone depleting, environmentally safe refrigerant developed to replace chloro-flouro-carbons in several air conditioning and refrigeration applications. Refex has a  technical collaboration with Kaltech Engineering and Refrigerants Pvt Ltd, Singapore.
 
CMP: Rs.202
Market Cap: Rs.307 crs
FY08 EPS: around Rs.10
H1FY08 Revenues: Rs.40 crs
FY08 : 80-100 crs
H1 PAT: 6 crs
FY08 PAT: around 15 crs
FY10 Revenues: Rs.1000 crs.
 
Margins FY07: 10%. It will improve after raising the installed capacity of cylinders from 480 tonne to 3,000 tonne per annum.
 
Today the current market for HFCs is about 34,000 tonne in the country. So after the implementation of the Montreal Protocol by January 2010, the shift will be to HFC-based business. So, definitely the market is big for this.
 
Refrex plans to export hydro fluorocarbons or HFCs to developed markets like the US and Europe after importing it from China and Singapore. The company imports refrigerant gases in liquefied form, regasifies it and packages it in cans in India.
 
Refex plans to acquire three companies each in the Far East, Central Europe and South America and has set aside Rs.200 crs for the same which will be raised through FCCBs leading to a dilution of around 8-10%. The acquisitions should be completed by mid next year. Refex is also planning to pick up stakes in Chinese raw material suppliers. Ideally, Refex will pick up 40% stake in the raw material supplier.
 
The company has received a special import licence for importing 2000 MT of HCFC-based refrigerants from DGFT. The licence would generate revenues up to Rs 40 crore in 6-9 months. Automobiles would contribute about 40% to both topline and bottomline in FY08.
 
Refex is also planning a big push of HFC gas cans for car air-conditioners. Refex recently launched HFC gas in cans. All air-conditioned cars need to change gas once in 24 months. At present, gas change in car air-conditioners cost anything between Rs 1,000 to Rs 1,200. With this initiative the cost will come down by 50% for the car owner.
 
Clients includes Hyundai Motors, Tata Motors, Hindustan Motors, Reva Electric Car Company, sports car maker San Motors, Toyota Kirloskar, Godrej and Boyce, Blue Star, Carrier Aircon.
 
Bennet & Coleman holds 3% stake in the company. ICICI Prudential holds this stock in two of their funds. MF holdings generally convey good promoter background.
 
Refex is trading at a FY08 PE of 20 and a market cap/sales of 3x. If the company indeed achieve what they are aiming to do by 2010, then even assuming a market cap/sales of 2x, the stock can turn out to be a 6-7 bagger in 3 years.
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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smartcat
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Quote smartcat Replybullet Posted: 30/Dec/2007 at 10:52pm

Refex is doing a smart thing by packaging and advertising what is basically a commodity (HFC). So Refex would be a better investment bet than pure commodity companies like Guj Fluoro or Navin Fluorine.

But -
 
- Companies like Guj Fluoro/Navin Fluorine being manufacturers of HFC can claim carbon credits. Refex just imports and packages them. I'm guessing Refex does not accrue and hence cannot sell carbon credits.
 
- Since Refex is pushing into car air-conditioning systems, it would be difficult for it to grow at a faster pace than the auto-industry. It needs to concentrate on clients like Blue Star  (which will grow faster than automobile companies).
 
- Is the company predicting 10x growth in revenues based on the Montreal  Protocol? If yes, then remember that HFC is basically a commodity and in 2 years, lots of capacity can come up by that time.
 
- Refex is importing gases in liquefied form from China and regassifying it. I'm guessing that it is cheaper to manufacture it in China. So obviously, other Chinese companies will have an advantage over Refex.
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furkanalam
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Quote furkanalam Replybullet Posted: 01/Jan/2008 at 2:05pm
Refex Refrigerants Limited, a Chennai based leading refrigerants management solutions provider and BSE listed company has entered into a partnership with TV 18, India’s fastest growing media and Entertainment Company.

Speaking on the development, Mr. Anil Jain, Managing Director of Refex Refrigerants Limited, said Refex is on a high growth path and our association with TV 18 will propel us to greater heights and we plan to work closely with TV 18 to achieve the goal of building Refex into a global market leader. This partnership is a significant milestone for the company and a testimony to the inherently strong business model and environmentally conscious approach followed by Refex. Refex is poised for great gains as it had always been a enthusiastic and vocal supporter of environmentally friendly HFC products which would not deplete the ozone and help build a better environment to live in.

Commenting on the tie up B. Sai Kumar, Group COO, Network 18 said, “We are very happy with this partnership since we believe that Refex’s aggressive growth plans combined with our ability to reach them in an engaging way and the reach of our multi-platform media vehicle will ensure that Refex is a significant player in the fast-growing environmental friendly refrigeration market.”
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Quote smartcat Replybullet Posted: 01/Jan/2008 at 2:14pm
Partnership with BCCL for print and TV18 for Television and Radio. Looks like these guys have big brand building plans.
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furkanalam
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Quote furkanalam Replybullet Posted: 01/Jan/2008 at 2:36pm
Absolutely...Already have seen ads of Refex on CNBC TV18....What say guys.....A good potential here...
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Chaman
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Quote Chaman Replybullet Posted: 02/Jan/2008 at 1:48pm
Originally posted by deveshkayal

1) Refrex plans to export hydro fluorocarbons or HFCs to developed markets like the US and Europe after importing it from China and Singapore. The company imports refrigerant gases in liquefied form, regasifies it and packages it in cans in India.
 
2) Refex plans to acquire three companies each in the Far East, Central Europe and South America.
 
Looks like an interesting firm, but a few questions.
1) What is the entry barrier to other firms in China or outside to copy the same business model and compete with Refrex?
2) What is intended purpose of the acquisitions in Far East, Central Europe & South America? Asking so, because it seems the big export markets are US & Europe. Is it to support/ serve developed economies in the vicinity or the domestic demand there? What is the size of opportunity in these developing geographies?
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Quote Rinku Replybullet Posted: 04/Jan/2008 at 9:37pm

Refex Refrigerants slips despite overseas acquisition plan

Refex Refrigerants slipped 1.35% Rs 212.10 at 14:51 IST on BSE, after the company said its board will consider an investment of up to $20 million in an overseas acquisition, in a meeting to be held on 5 January 2008.

The company made this announcement during trading hours today, 4 January 2008.

Meanwhile, BSE Sensex was up 344.94 points or 1.70% to 20,690.14.

On BSE 57,956 shares were traded in the counter. The stock had an average daily volume of 5.23 lakh shares in the past one quarter.

The stock hit a high of Rs 217.50 and a low Rs 210 so far during the day. The stock hit a 52-week high of Rs 222 on 3 January 2008 and a 52-week low of Rs on 22 August 2008.

The small-cap scrip had outperformed the market over the past one month till 3 January 2008, gaining 24.39% as compared to the Sensex’s return of 3.08%. It had also outperformed the market in the past one quarter, 214.10% as compared to the Sensex’s rise of 14.47%.

The company’s current equity is Rs 15.20. Face value per share is Rs 10.

The current price of Rs 212.10 discounts its Q2 September 2007 annualized EPS of Rs 9.47 by a PE multiple of 22.40.

The board will also consider Q3 December 2007 results on 5 January 2008.

Refex Refrigerants’ net profit rose 344.4% to Rs 3.60 crore on 48.9% growth in net sales to Rs 23.95 crore in Q2 September 2007 over Q2 September 2006.

The company is engaged in refilling and marketing non-ozone depleting refrigerant gases known as HydrofluroCarbons (HFCs). HFCs are used in auto air conditioners, room air conditioners, refrigerators and refrigerating equipments.

capitalmarket.com
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deveshkayal
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Quote deveshkayal Replybullet Posted: 07/Jan/2008 at 9:33am
9 Months ended Dec 31,2007 EPS at Rs.7.62 compared to 3.44 for FY07.
PAT up by 159.41%
Sales up by 50.03%
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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