KRN Heat Exchanger and Refrigeration Ltd Q2FY26 – The ₹5,000-Cr Chill Factory That’s Turning HVAC Heat into Pure Margin Steam
1. At a Glance
Brace yourselves, dear investors, because KRN Heat Exchanger and Refrigeration Ltd (KHERL) has just cooled the room and heated up its numbers. The company, barely a year post-listing (October 2024 IPO), has started flexing industrial-level thermal muscles. With a market cap of ₹4,925 crore, current price ₹792, and a rather toasty P/E of 83.4, this HVAC player is not just cooling coils—it’s boiling expectations.
For the quarter ended September 2025, KRN clocked revenue of ₹152 crore, a 66.9% YoY jump and PAT of ₹18 crore, up 46.4% YoY. The operating margin stood at 20%, showing that while compressors hiss, the profits hum steadily. The company, led by its finned and tubed empire out of Neemrana, Rajasthan, has proven that you can indeed make heat your business model—and get a CRISIL monitoring report for your ₹342 crore IPO money while at it.
But hold your Freon, folks—this company’s expansion story is hotter than your AC compressor at 45°C ambient. From railway approvals to a new plant in Alwar and an ambitious export push, KRN is cooling the world one coil at a time.
2. Introduction
Every decade or so, a small industrial company from an unglamorous sector sneaks into the limelight. For the 2020s, that sneaky overachiever might just be KRN Heat Exchanger and Refrigeration Ltd. While software bros are busy selling “AI-powered workflows”, KRN is selling condenser coils that literally keep those servers from melting.
From a humble start in Rajasthan to a 5.66 lakh-unit annual coil capacity, KRN has turned the boring business of heat transfer into a ₹5,000 crore drama. And unlike many small-cap IPOs that vanish after their listing pop, KRN has been consistently posting rising profits, expanding facilities, and even getting vendor approval from the Ministry of Railways (because what’s cooler than cooling locomotives?).
Of course, not all is icy in this story. The company’s P/E of 83x could make even Inox India blush, and its working capital days have ballooned from 107 to 153, suggesting that maybe customers love their ACs more than paying on time. Yet, in a world where capital goods are back in vogue, KRN is proving that refrigeration isn’t just about keeping food fresh—it’s about keeping balance sheets hot.
3. Business Model – WTF Do They Even Do?
KRN Heat Exchanger & Refrigeration Ltd manufactures fin and tube-type heat exchangers. In human English, they make the components that move heat from one place to another—critical for HVAC systems, industrial cooling, and refrigeration equipment.
Their product range reads like a parts catalogue for engineers who dream in Celsius:
Condenser coils
Evaporator coils
Fluid & steam coils
Bar & plate exchangers
Oil cooling units with blower and motor
Roll bond evaporators
In short, if it cools, they probably make a part for it.
Their clients include Voltas, Daikin, Blue Star, Carrier, Schneider Electric, and Kirloskar Chillers—essentially everyone responsible for keeping India’s malls, metros, and CEOs comfortable in summer.
Revenue concentration is another spicy detail: the top 10 customers bring in 72% of revenue—so while the order book is stable, one sneeze from Daikin could give KRN a financial cold.
They’ve even launched KRN HVAC Products Pvt. Ltd., a subsidiary that’s expanding aggressively into railways, oil cooling, and industrial heat transfer. With the Alwar plant expected to reach 6 million units capacity, this is no longer a mid-size supplier—it’s an upcoming industrial legend.
Commentary: The company’s EBITDA margin recovered to 20%, its best in several quarters, showing strong operating leverage from the new plant and scale-up. Sales growth of 67% YoY is stunning, though the P/E multiple would make a Silicon Valley SaaS founder jealous.
5. Valuation Discussion – Fair Value Range
Let’s try to value this beast in three ways—purely for educational kicks.
(a) P/E Method: Industry P/E = 30 KRN’s EPS (annualised) = ₹11.6 Fair value range = ₹348 – ₹464
(b) EV/EBITDA Method: EV = ₹4,883 Cr EBITDA (TTM) = ₹83 Cr EV/EBITDA = 58.8x (currently way above industry average of 20x) If re-rated to
