Shree Refrigerations Ltd: 83% Navy Orders, 100% Debt-Chill, Fresh SME Listing Drama
1. At a Glance
Shree Refrigerations Ltd (SRL), a defence-focused HVAC manufacturer, just debuted on BSE SME (Aug 2025). In FY25, it clocked ₹99 Cr sales, ₹14 Cr PAT, 27% OPM, and an order book of ₹231 Cr. Marine chillers make up 84% of revenues (read: Navy is basically their godfather). Stock trades at ₹178 with a nosebleed P/E of 46x. Promoters trimmed stake from 56% to 45% (ouch), while FIIs and DIIs grabbed pieces. Strong margins, decent ROE (15%), but debtor days at 352 means the Navy takes its own sweet time paying — defence style.
2. Introduction
Imagine if your business survival depended on the Indian Navy deciding when to clear invoices. Welcome to SRL’s world. Incorporated in 2006, they’ve hustled from being an HVAC nobody to a defence supplier with approved registrations from multiple naval directorates.
They’re not just selling ACs — they’re selling the Navy comfort during war drills and the pharma industry temperature control during inspections. In other words, whether it’s a destroyer mid-sea or a chemical plant in Satara, SRL’s chillers make sure things don’t overheat (except their stock valuation).
But here’s the irony: for a company that builds refrigeration, SRL’s growth story is on fire — 50% CAGR sales over 5 years, 43% PAT CAGR, margins north of 25%. The only thing not chill? Working capital. With debtor days of almost a year, the CFO’s hairline is receding faster than ice in Mumbai heat.
3. Business Model (WTF Do They Even Do?)
SRL is in the defence + industrial HVAC sweet spot. Unlike Blue Star or Voltas, they’re not chasing retail AC sales; they’re gunning for specialized industrial chillers.
Marine HVAC & R systems (84% of revenue): Think customised chillers for warships. Defence procurement is slow but sticky.
Other chillers (5%): For chemicals & pharma — steady demand.
Fabrication & Services (10%): Installation, training, testing. Basically, AMC with extra salt.
Production capacity at Karad, Maharashtra:
36 seawater-cooled AC plants
36 air-cooled AC plants
180 industrial chillers
Revenue split FY25:
Govt sector 77%, Non-govt 23%.
Top 1 customer = 41%. Customer concentration is higher than a filter coffee shot in Bengaluru.
So, the model is simple: build Navy-approved systems, keep order book fat, and pray payments don’t get delayed beyond 365 days.
4. Financials Overview
Source table
Metric
FY25 (Latest)
FY24
YoY %
Revenue
₹98.7 Cr
₹80 Cr
+23%
EBITDA
₹27 Cr
₹25 Cr
+8%
PAT
₹13.8 Cr
₹12 Cr
+15%
EPS (₹)
4.88
4.2
+16%
Commentary: Growth is solid, margins juicy (27% OPM). But valuation at 46x P/E? Even Nestlé is blushing.
5. Valuation (Fair Value RANGE Only)
P/E Method: EPS 4.88 × industry PE (37) = ₹180/share.
EV/EBITDA: EV 670 / EBITDA 27 = 24.5x. Applying peer multiple of ~18x → ~₹130/share.
DCF: Assume 20% growth, discount at 12% → ~₹140–160/share.
👉 FV Range: ₹130–₹180/share. (For educational purposes only, not advice.)
6. What’s Cooking – News, Triggers, Drama
IPO (Aug 2025): Raised funds for working capital. Fresh listing heat keeps stock active.
Order Book ₹231 Cr: 2.3× FY25 revenue — good visibility. Plus bids worth ₹124 Cr in pipeline.
