KRN Heat Exchanger and Refrigeration Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

KRN Heat Exchanger and Refrigeration Ltd trades at ₹1,594, in a confirmed uptrend and 25 weeks into that stage. That is +40.1% against its own 200-day average. It sits at 98% of a 52-week range of ₹598 to ₹1,610. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 5 straight weeks.

Today the stock is in a confirmed uptrend — week 25 of stage 2, confirmed. At ₹1,594 it trades +40.1% versus its 200-day average and sits at 98% of its 52-week range (₹598–₹1,610).

Against the market, two honest reads. Cumulative: over the last 1.9 years the stock moved +252% while the NIFTY 500 moved −3% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 5 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

KRN Heat Exchanger and Refrigeration Ltd's story is not scored yet against the markers our research file set on 17 May 2026. Where it sits in its own cycle: GROWTH_EXPANSION.

Our read, 17 May 2026. A heat-exchanger specialist mid-cap running a 6x capacity ramp — the operating leverage has just started inflecting but management credibility is noticeably fraying.

From the numbers. PE at 86th percentile of own (limited) history with a RIDING_WAVE label. Median PE is 87 vs current 114 (cycle snapshot). FII buying has accelerated from 1.98% in Dec 2024 to 6.66% in Mar 2026 — institutional support…

From the price. Price stage 2, week 25 — above its 200-day line, relative strength rising.

From the research. A heat-exchanger specialist mid-cap running a 6x capacity ramp — the operating leverage has just started inflecting but management credibility is noticeably fraying.

🚨 Where they disagree. PE at 86th percentile of own (limited) history with a RIDING_WAVE label. Median PE is 87 vs current 114 (cycle snapshot). FII buying has accelerated from 1.98% in Dec 2024 to 6.66% in Mar 2026 — institutional support for the growth thesis is growing. The stock is not cheap; it is priced for execution. Any guidance miss triggers derating risk from a high valuation base.

What is proven. A heat-exchanger specialist mid-cap running a 6x capacity ramp — the operating leverage has just started inflecting but management credibility is noticeably fraying.

What is not proven yet. Management has missed the HVAC utilization target in every quarter since Aug 2025 guidance. A miss below 30% in Q1 FY27 would invalidate the operating leverage thesis and trigger a derating from 95x PE.

The test written in advance. HVAC Facility Utilization Misses Again — Execution Credibility Risk — HVAC Facility Utilization Misses Again — Execution Credibility Risk Q1 FY27 HVAC facility utilization (reported ~Aug 2026) — must reach 25-30% by the next result.

The test written in advance. EBITDA Margin Guidance Unreliability — 800 bps Stepdown in One Quarter — EBITDA Margin Guidance Unreliability — 800 bps Stepdown in One Quarter Q1 FY27 consolidated EBITDA margin — must track toward 15%+ for the ramp story to hold by the next result.

The test written in advance. RIPS Approval Chronically Delayed — RIPS Approval Chronically Delayed RIPS approval announcement — if not received by Q1 FY27 call, downgrade this risk to structural by the next result.

Lever 1 · Operating leverage — BUILDING. 6x capacity at 15% utilization; EBITDA grew 59.5% on 39.5% revenue in FY26 — the leverage is just starting. 50% utilization target in FY27 implies ₹900 Cr+ consolidated revenue. What proves it keeps working: Operating Leverage Inflection (New Neemrana HVAC Facility). It stops working if Q1 FY27 HVAC facility utilization (reported ~Aug 2026) — must reach 25-30%.

Lever 14 · A bigger market to sell into — BUILDING. Data center grew from ~7% to 18.7% of Q4 FY26 revenue in 3 quarters; Schneider Electric + Vertiv approvals in place; North America and Europe export pipeline building with 6-7 month forward visibility. What proves it keeps working: Data Center HVAC Demand Surge. It stops working if Q1 FY27 HVAC facility utilization (reported ~Aug 2026) — must reach 25-30%.

Lever 10 · New geographies — BUILDING. ₹100 Cr export in FY26 targeting ₹120+ Cr in FY27; 15-20% landed price advantage over North American and European suppliers; data center orders adding long-lead visibility. UAE disruption temporary. What proves it keeps working: Export Expansion (North America, Europe, UAE). It stops working if Q1 FY27 HVAC facility utilization (reported ~Aug 2026) — must reach 25-30%.

Lever 12 · New product launch — BUILDING. ₹10 Cr in FY26 first year; targeting 15% of ₹1,000+ Cr India bus AC market in FY27; unique backward integration advantage (in-house fin-tube, microchannel, tubing, FRP) vs peer manufacturers. What proves it keeps working: Bus AC New Segment Entry. It stops working if Q1 FY27 HVAC facility utilization (reported ~Aug 2026) — must reach 25-30%.

Sources: our stock research file (17 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

KRN Heat Exchanger and Refrigeration Ltd reported ₹252 Cr of revenue in the Jun 26 quarter, +119.1% year on year. That is the 8th straight quarter of year-on-year growth. Over 2 years it has compounded at 39.8% a year. The last full year, FY26, came in at ₹600 Cr. The last four reported quarters add to ₹736 Cr.

Why this happened. AI-driven data center capital expenditure in India and globally is creating structural demand for large-scale heat exchangers for outdoor cooling (ODU side). KRN's new Neemrana facility has unique large-coil manufacturing infrastructure (overhead cranes, multiple production stations) that domestic competitors cannot match. Domestic customers include Schneider Electric and Vertiv (recently approved in Q4 FY26, mass production imminent). Export data center business established in North America (primary) and Europe with 6-7 month forward order visibility from anchor customers. Management targeting 80-90% of incremental finned-tube growth from this segment in FY27. Microchannel HX development…

FY26 revenue came in at ₹600 Cr (+39.5% on the year), capping 2 years at 39.8% compound. The latest quarter (Jun 26) printed ₹252 Cr, +119.1% year on year — the 8th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +64.9% growth against the decade's 39.8% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +63.9% over the last 4 quarters against +52.9%/yr over the last 8 — accelerating; TTM profit +83.0% vs +53.8%/yr — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

KRN Heat Exchanger and Refrigeration Ltd's operating margin is 19.0% in the Jun 26 quarter, +4.0 percentage points against the same quarter a year ago. Across 3 fiscal years the operating margin has ranged 16.0% to 19.0%. The current quarter sits inside that band.

Why this happened. The core thesis engine. KRN commissioned a new HVAC facility in March 2024 that is 6x the old standalone facility's capacity. FY26 closed with the new facility at only 15% utilization, yet consolidated EBITDA grew at 1.5x the revenue pace. As utilization climbs to 50% (FY27 target) and 80% (FY28 target), every incremental ₹ of revenue has a dramatically lower variable cost contribution because fixed costs (depreciation, overheads) are already absorbed. Peak capacity on the new facility implies ₹2,000 Cr of incremental revenue potential. The 'minimum 12% EBITDA' guide for FY27 is management's conservative floor given high depreciation — actual realization likely higher as volumes ramp.

The latest quarter's operating margin is 19.0%, +4.0 pp against the same quarter a year ago. Across 3 fiscal years the operating margin has ranged 16.0%–19.0%.

Why the margin moved: operating margin went +4.2 pp year on year while gross margin went +6.6 pp — the gain came mostly from the gross line: input costs and pricing.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

KRN Heat Exchanger and Refrigeration Ltd earned ₹33.0 Cr of net profit in the Jun 26 quarter, +175.0% year on year. It is the 4th consecutive quarter of growth. Full-year FY26 profit was ₹76.0 Cr. The 2-year compound rate is 39.6%. That is 13.1% of the quarter's revenue. The same quarter a year earlier earned ₹12.0 Cr.

Jun 26 profit was ₹33.0 Cr, +175.0% year on year — the 4th consecutive quarter of growth. On the full year, FY26 printed ₹76.0 Cr (+43.4%), and the 2-year compound rate is 39.6%.

Why profit moved: revenue contributed +119.1% and the margin +4.0 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +85.7% vs revenue +64.9%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years −45% of KRN Heat Exchanger and Refrigeration Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹−114 Cr of operating cash against ₹76.0 Cr of profit. After ₹199 Cr of capital spending, ₹−313 Cr was left as free cash.

FY26: operating cash of ₹−114 Cr against reported profit of ₹76.0 Cr, leaving free cash of ₹−313 Cr after ₹199 Cr of capital spending. Across the last 3 fiscal years the conversion rate is −45% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at −45%: the cash cycle stretched 67 days between FY24 and FY26 — more of each rupee of profit waits inside the cycle before arriving. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: conversion is below par and the cash cycle has stretched 67 days — the next section's job is to find where the cash is stuck.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

KRN Heat Exchanger and Refrigeration Ltd's cash conversion cycle runs 208 days in FY26, up from 141 days in FY24. Capital spending ran ₹285 Cr over the last 2 years. At FY26 sales of ₹600 Cr each day of that cycle holds about ₹1.6 Cr, so roughly ₹342 Cr sits inside the business at any moment.

FY26: debtors at 106 days, inventory at 242 days — roughly 8.0 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 208 days, looser than FY24's 141.

The full loop: cash goes out to suppliers and production on day 0; stock waits 242 days to sell; customers pay about 106 days after that; and suppliers themselves are paid at 140 days — netting out to the 208-day cycle.

In money terms: at FY26 sales of ₹600 Cr, each day of the cycle holds about ₹1.6 Cr — so the 208-day loop keeps roughly ₹342 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹285 Cr over the last 2 fiscal years against ₹24.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹33.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the working-capital loop is the cash sink the router flagged — watch the cycle, not the P&L.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

KRN Heat Exchanger and Refrigeration Ltd earns a ROCE of 16% in FY26. Return on invested capital clears the cost of that capital by +1.1 percentage points, so growth here adds value rather than only size. The wiring behind it is 12.7% net margin on 0.64× asset turns.

FY26 ROCE is 16%.

Why the return is what it is — the wiring (FY26): 12.7% net margin × 0.64× asset turns × 1.62× balance-sheet leverage ≈ 13.2% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 13.1% − 12.0% = a +1.1 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Positive but thin — value creation with little room for error.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

KRN Heat Exchanger and Refrigeration Ltd carries total debt of ₹187 Cr against shareholder equity of ₹574 Cr as of Mar 26, a debt-to-equity of 0.33. On the annual view that ratio went from 0.67 in FY24 to 0.33 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹187 Cr against shareholder equity of ₹574 Cr — a debt-to-equity of 0.33. On the annual view, debt-to-equity went from 0.67 (FY24) to 0.33 (FY26). Read the returns on this page with that leverage in mind.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Promoters cut 5.1 points of KRN Heat Exchanger and Refrigeration Ltd over 7 quarters, the biggest move on the register. That takes promoters to 65.7% of the company. Foreign institutions moved +4.8 points over the same window, to 8.9%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: −5.1 points over 7 quarters to 65.7%; Foreign institutions: +4.8 points over 7 quarters to 8.9%; Domestic institutions: +0.9 points over 7 quarters to 8.3%.

🚨 Why the register moved: promoters drove it (−5.1 points), absorbed on the other side by foreign institutions (+4.8 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

KRN Heat Exchanger and Refrigeration Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

KRN Heat Exchanger and Refrigeration Ltd trades at 108.0× P/E, at the pricey end of its own range (95th percentile). Its long-run median P/E is 90.1×, measured across 1.9 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 108.0× is at the pricey end of its own range (95th percentile), against a long-run median of 90.1× measured over 1.9 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

🚨 Why the multiple sits where it does: over the past year annual EPS moved +44.5% against a +87.4% price move — the price outran earnings, pushing the multiple UP its own range.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

KRN Heat Exchanger and Refrigeration Ltd reads as consistent on its fundamental arc. Consistent — revenue and profit growth have stayed positive through the window, with ROCE at 19.5% and holding. The read is built from 8 quarters across 3 curves, on partial evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

One or more growth curves carry a base-effect spike — a large year-on-year move off a near-zero or loss-making comparable quarter. Those spikes are capped before the classifier reads the trajectory, and shown pinned on the chart, so a single distorted quarter does not drive the stage call.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

73.8/100 — rank 1 of 4 in Engineering - General · 90% evidence confidence

KRN Heat Exchanger and Refrigeration Ltd scores 73.8 out of 100 against the 4 companies it is compared with in Engineering - General, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 33.6 + 14.7 + 5.5 + 20 = 73.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What KRN Heat Exchanger and Refrigeration Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Vertiv Qualification Timeline Regressed · 21 August 2026. In May 2026, management said Vertiv had cleared its QMS audit and expected prototype approval followed by mass production in the coming month. In Aug 2026, management said only a sample order had been received and that sample approval was still required before mass production, a material and unexplained reversal in the customer onboarding timeline.

Micro-Channel Launch Delayed · 21 August 2026. The Feb 2026 call targeted micro-channel inclusion by the end of 2026 or early 2027. By Aug 2026, management had moved the target to approximately one year from then and was still ordering machinery, implying a material launch delay with no explanation.

Bus AC Market Share Guidance Increased Sharply · 21 August 2026. In May 2026, management guided to 10-15% of the bus AC market for the year. In Aug 2026, it stated that the company would achieve approximately 50% market share this year, a several-fold increase with no explanation; the latest call also separately repeated a 10-15% target.

UAE Export Outlook Reversed · 21 August 2026. May 2026 described UAE revenue as increasing and cited a large UAE order, while Aug 2026 said UAE revenue for the year would definitely decline from last year. The latest call cites geopolitical uncertainty, but does not reconcile this reversal with the prior call's stated recovery in dispatches and growth.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions