KRN Heat Exchanger – Value Pick Multibagger Stock for long term

KRN Heat Exchanger and Refrigeration Limited

Value Pick Multibagger Stock for long term

krnheatexchanger.com BSE: 544263 NSE: KRN

Market Data

Market Metrics

Market Cap: ₹4,584 Cr

Current Price: ₹738

52-Week High/Low: ₹904 / ₹402

Key Ratios

Stock P/E: 115

Book Value: ₹80.5

Dividend Yield: 0.00%

Performance Metrics

ROCE: 42.1%

ROE: 41.9%

Promoter Holding: 70.8%

Q3 FY25 Financial Performance

Revenue: ₹9,109.59 Lakhs (YoY growth: 28.41%, QoQ growth: 15%)

EBITDA: ₹1,955.27 Lakhs (Margin: 21.17%)

Net Profit: ₹1,231.08 Lakhs (YoY growth: 42.98%)

Product-Wise Revenue Contribution (FY25)

Evaporator Coils

₹11,558.70 Lakhs

37.49% of Revenue

Condenser Coils

₹17,029.57 Lakhs

55.24% of Revenue

Other Segments

₹2,240.04 Lakhs

7.27% of Revenue

Future Growth Projections

Revenue FY25

₹35,000 Cr

Growth: +18% YoY

Revenue FY26

₹42,000 Cr

Growth: +20% YoY

EBITDA FY25

₹7,000 Cr

Margin: ~20%

EBITDA FY26

₹8,500 Cr

Margin: ~20.2%

Strategic Initiatives

Capacity Expansion

New facility under KRN HVAC Products

Target: 2 million units by FY27

R&D Investments

₹25 Lakhs annual investment

Focus on thermal efficiency

Customer Base Expansion

Target: 200+ clients

Across 12+ countries by FY26

Industry Outlook

Global Heat Exchanger Market

Expected CAGR: 6.2%

Market Size: $20 billion by 2030

Indian HVAC Market

Projected CAGR: 12.5%

Growth Drivers: Urbanization, infrastructure expansion, industrial activity

Risk Analysis

High Valuation

P/E of 115 implies high growth expectations

Customer Concentration

Top 10 customers contribute 75.94% of revenue

Export Challenges

Exposure to forex fluctuations and geopolitical risks

Valuation

DCF Valuation Parameters:

Terminal Growth Rate: 6%

Discount Rate: 10%

Intrinsic Value: ₹850

Upside Potential: ~15% from current price of ₹738

Investment Thesis

KRN Heat Exchanger represents a compelling growth opportunity in the HVAC&R sector, supported by:

• Strong demand growth in domestic and export markets

• Innovative product development and R&D focus

• Strategic expansion plans and operational efficiency

• Robust financial performance with improving margins

However, investors should consider the high valuation and customer concentration risks.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors are advised to conduct their due diligence and consult financial advisors before making investment decisions.

KRN Heat Exchanger Q3: 43% Profit Jump, Eyes ₹42,000 Cr FY26 Revenue