KRN Heat Exchanger Share Price in Focus as Stock Surges Over 8% Amid Strong Financials

On November 07, 2024, KRN Heat Exchanger’s share price surged over 8% on NSE as of 10:20 AM.

On November 06, KRN Heat Exchanger’s (KRN) stock price surged, hitting a 20% upper circuit at ₹537 on the BSE. This marked the stock’s highest level since its October 3, 2024 debut. With this jump, KRN’s market price more than doubled, soaring 103% above its issue price of ₹220 per share. 

Overview of KRN Heat Exchanger’s Operations

KRN Heat Exchanger specialises in producing fin and tube-type heat exchangers used in HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) systems. The company manufactures products like condenser coils, evaporator units, fluid and steam coils, and sheet metal parts, primarily using non-ferrous metals such as copper and aluminium. KRN’s products come in various shapes and sizes, with tube diameters ranging from 5 mm to 15.88 mm, to meet diverse client needs. Its partnerships with major players like Daikin, Schneider Electric, and Blue Star, alongside a strategic push for global expansion, have strengthened its market position.

Growing Demand for Heat Exchangers

The rising demand for finned tube heat exchangers in India is closely tied to the growth of the HVAC market, driven by real estate development, manufacturing, warehousing, and transportation sectors. The Indian HVAC market, valued at $7.8 billion in 2021, is projected to grow significantly, reaching nearly $27.4 billion by 2030. KRN anticipates that this demand will boost production for HVAC equipment and, in turn, drive up the need for heat exchangers. In its recent investor presentation, KRN highlighted that the annual turnover for finned tube heat exchangers is expected to nearly double from $133 million in 2022 to $277 million by 2029.

Strong Financial Performance in Q2 FY25

In the second quarter of FY25, KRN reported a substantial 42.98% year-on-year increase in its consolidated profit after tax (PAT), reaching ₹123.2 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 36.4% to ₹195.5 crore, with a margin improvement of 124 basis points to 21.17%. Total income rose by 28.4% year-on-year, totalling ₹925.4 crore.

Impressive Revenue Growth and Market Position

KRN’s financial growth has been notable, with revenue increasing from ₹156 crore in FY22 to ₹308 crore in FY24, reflecting a compound annual growth rate (CAGR) of 25%. This growth has been fueled by a strong order book and repeat orders from large customer groups backed by KRN’s reliable client relationships. As revenues have expanded, EBITDA and PAT margins have also improved, supported by enhanced manufacturing processes and new product capabilities. This focus on efficiency and infrastructure is positioning KRN to meet the rising demand in the heat exchanger industry effectively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.