KRN Heat Exchanger and Refrigeration LtdQ3 FY24Industrial Products

KRN Heat Exchanger and Refrigeration Ltd

Q3 FY24 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company targets full utilization of new 6x expanded capacity within three years starting FY26 (Page 5,6,15,16).
→Mass production for new capacity is expected to start from Q2 FY26, with sampling beginning Q1 FY26 (Page 15,16).
→Current capacity utilization is around 85-90%, with peak revenue estimated around ₹110-120 crore per quarter on existing capacity (Page 17).
→Pipeline includes over 200 customers (domestic and export), with exports to US and Europe expected to grow due to anti-dumping duties on Chinese competitors (Page 4,6,12,18).
→Commercial heat exchangers and data center cooling products are high growth segments, growing 20-25%, with data center cooling growing over 50% (Page 8,9).
→Expansion includes adding new products (bar and plate, roll bonding), aiming to add new clients alongside existing ones (Page 5,13,15).
→Management expects to sustain current margins and sees export markets as a key growth driver (Page 9,18).

Margin guidance

Category 3

→FY25 H1 net profit increased by 24.93% to ₹24.34 crore; EPS rose 18.28% to ₹5.24.
→Q2 FY25 net profit surged 41.55% to ₹12.13 crore; EPS grew 33.85% to ₹2.61.
→Management expects growth in FY25 to be similar to last year, though specific numbers are not disclosed.
→Capacity utilization is currently near peak (~85-90%), limiting immediate revenue upside without expansion.
→New facility with 6x capacity expansion expected to ramp up from FY26 Q1 sampling and Q2 mass production.
→Full utilization of new capacity targeted within 3 years starting FY26.
→New products and increased exports, especially to US and Europe, expected to boost earnings.
→Margin expansion anticipated due to new facility efficiencies, solar power, tax incentives, and export mix.
→Management confident of sustained margin and positive growth trajectory.

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for KRN Heat Exchanger and Refrigeration Ltd and 1,400+ other companies.

Fundraise plans

Yes

→The company has signed a ₹1000 crore MOU with the Rajasthan government under the "Rising Rajasthan" initiative.
→Out of this, ₹342 crore has already been received from their IPO.
→The remaining amount will be invested from internal accruals.
→If needed, the company may raise funds through banks and financial institutions (debt).
→No explicit mention of raising additional equity beyond the IPO amount for this investment.
→Overall, fundraising is planned via a mix of IPO proceeds, internal accruals, and potentially debt if required.

Order book

→KRN Heat Exchanger operates on a B2B model with development timelines from 2 months to 1 year.
→Orders are typically rolling, with forecasts ranging from 2-6 months from various customers.
→The company does not have a traditional project-based order book; instead, it manages ongoing supply commitments post product development.
→Current capacity utilization is near peak (~85-95%), implying limited immediate order backlog capacity.
→New facility with 6x capacity expansion underway to cater to existing and new customers, allowing conversion of sample orders in pipeline to mass production.
→Over 200 customers in the pipeline, with capacity constraints currently limiting conversions.
→The company has signed a 1000 crore MOU with Rajasthan government for expansion, with further investment planned through IPO proceeds, internal accruals, and possibly bank financing.

Capex plans

Yes

→The company is undertaking a major capacity expansion, increasing capacity by 6 times through a new facility (KRN HVAC Products Private Limited, a wholly-owned subsidiary).
→Total CAPEX for the new facility is more than ₹300 crore.
→Mass production at the new facility is expected to start from Q2 FY26, with sampling and approvals beginning Q1 FY26 (April 2025).
→The expansion is funded partly from IPO proceeds (₹342 crore received) and internal accruals; additional bank/financial institute borrowing may be considered if needed.
→The new facility includes a solar power plant (8 MW) expected to reduce electricity costs.
→The expansion targets export markets in Europe and North America and aims to serve existing and new domestic customers.
→The company has signed a ₹1000 crore MOU with the Rajasthan government under the Rising Rajasthan initiative to support this investment.
→The project aims for full-scale capacity utilization over three years starting FY25.

How does KRN Heat Exchanger and Refrigeration Ltd rank vs peers in Industrial Products?

Pro feature

1KRN Heat Exchanger and Refrigeration Ltd

Rev 2Mar 3

See full Industrial Products sector rankings

Unlock with Pro

Want more stocks like KRN Heat Exchanger and Refrigeration Ltd?

Build an AI portfolio filtered by sector, market cap, and growth rank. Takes 2 minutes.

Build my portfolio