Q1 26/27

Aug 13, 2026

Summary

Consolidated revenue rose 118.87% YoY to INR 252.32 crore, with EBITDA margin improving to 19.44%. FY27 export target is ~INR 200 crore; capacity and product expansion support the unchanged FY28 revenue target.

Ladies and gentlemen, good day and welcome to KRN Heat Exchanger and Refrigeration Q1 FY27 earnings call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Hiral Parekh from Dolat Capital Market. Thank you, and over to you, ma'am. Thank you, Sumit. Good afternoon, ladies and gentlemen. On behalf of Dolat Capital, I am pleased to invite all of you to the Q1 FY27 earnings conference call with the management of KRN Heat Exchanger and Refrigeration Limited. The management is represented by Mr. Santosh Kumar Yadav, the Chairman and MD, Mr. Pawan Nawal, the CFO, and Ms. Komal, the whole-time director of KRN HVAC Products Private Limited. With that, I will hand over the call to Komal ma'am for the opening remarks. Over to you, Komal. Thank you. Good afternoon, everybody, and thank you for joining us. It is a pleasure to begin the new financial year on a strong note. Q1 FY27 has been encouraging for us, not only from the perspective of business growth, but also in terms of how the company is progressing towards building a broader and more integrated business. The quarter reflects continued demand across our core markets, improving traction across our expanding product portfolio, and increasing acceptance of KRN's capabilities across international markets. We have always believed that sustainable growth comes from building the right capabilities ahead of the opportunity. Over the past few years, KRN has therefore been focused on expanding its manufacturing base, widening its product portfolio, strengthening backward integration, and gradually moving beyond its traditional product categories. Today, the company has a much broader offering, spanning from fin and tube, fin plate, refrigeration components, complete HVAC system, bus AC, and applications across areas such as data centers, railways, industrial cooling, refrigeration, and mobility. This gives us a stronger base from which to participate in a wider range of opportunities within the thermal management ecosystem. Coming to the financial performance, Q1 FY27 delivered healthy growth across both standalone and consolidated operations. On a standalone basis, revenue from operations increased 59.07% year-on-year to INR 181.97 crore, while EBITDA grew 24.67% to INR 24.67 crore, and net profit increased 19.02% to INR 18.67 crore. On a consolidated basis, revenue from operations grew 118.87% to INR 252.32 crore. EBITDA increased 178.85% to INR 49.06 crore, and net profit rose 164.84% to INR 32.90 crore. Importantly, consolidated EBITDA margin improved to 19.44% from 15.26%, while net profit margin increased to 13.04% from 10.77%, reflecting the stronger contribution from the broader consolidated business. One of the encouraging aspects of the quarter has been the continued expansion of our international business. Exports grew strongly during the quarter, with overseas revenue increasing 177% year-on-year, and KRN's products reaching customers across 14 countries. We see this as an important development because international markets provide an opportunity to take our manufacturing capabilities and product expertise to a much wider customer base. Our presence across North America, Europe, and the UAE continues to develop, and we remain focused on building these markets steadily through customer relationships, product acceptance, and execution capabilities. At the same time, the domestic opportunities remain important. India is seeing continued investment across areas that require efficient thermal management, including HVAC, refrigeration, data centers, infrastructure mobility, and industrial applications. For KRN, the opportunity is not limited to any single segment. The expansion of our product portfolio allows us to address multiple applications and gradually participate in larger and more integrated requirements. Our move into newer areas such as bus AC and complete HVAC solutions is a part of this broader evolution. Similarly, our expanding capabilities in different plate refrigeration components and other specialized products allow us to address opportunities beyond our established fin and tube business. This objective is to build a more diversified and capable business over time while remaining disciplined about execution and quality. KRN's journey in recent years reflects this progression from a focused heat exchanger manufacturer towards a broader HVAC&R solutions business. We also remain focused on making the most of the manufacturing infrastructure and capabilities that have been built over the past few years. Capacity expansion is an important part of our growth journey, but equally important is the ability to utilize that capacity effectively, improve product breadth, and strengthen our ability to serve customers across geographies and applications. Our investments in manufacturing, localization, and backward integration are intended to create a stronger operating base as the business scales. Looking ahead, we see a healthy set of opportunities across both domestic and international markets. The combination of a wider product portfolio, expanding export footprint, manufacturing capabilities, and exposure to multiple end-use industries gives us a broader base for future growth. At the same time, we remain conscious that opportunities need to be converted through consistent execution, customer relationships, and operational discipline. As we enter FY27, our focus therefore remains clear. Continue strengthening the core business, scale the newer opportunities, deepen our international presence, and build capabilities that can support KRN's next phase of growth. We believe the company is entering this phase with a stronger foundation, a broader business, and increasing market opportunities. While we remain focused on delivering quarter by quarter, our larger objective is to build KRN into a more diversified, scalable, and globally relevant player in the HVAC&R ecosystem. With that, I would like to thank our customers, employees, business partners, and all our investors for their continued confidence and support. We look forward to sharing our progress with you as the year unfolds. With that, we would be happy to take your questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Mohit from Shukla Research. Please go ahead. Hi, sir. Hope I'm audible. Hello, Mohit. Please go ahead. I am audible. Hello, Mohit. Your voice is not audible. Please go ahead. Hello. Hi. Hope I am audible. Hello. Hello. As there is no questions from the line of Mohit, we will move to next. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on your touchtone telephone. The next question is from the line of Hiral Parekh from Dolat Capital. Please go ahead. Hi, sir. Thank you for taking my question. Exports has increased 88% QOQ, and I can see that this growth is coming from some pockets in Europe and also in the revenue pie, it has jumped up from 16% to 21%. Can you provide some color on what segments we are getting this revenue from? Yeah, thank you, Hiral. Basically, this quarter main order we are receiving from North America, of course, Europe, and slightly if you see compared to last year, decline from UAE actually because of war. North America and Europe, we have two or three new customer, mainly from data center. You can see main revenue this quarter we receive export side, including data center and as well as our old customer. Got that, sir. Are any of these revenues one-off in nature? Sorry? Are any of these revenues one-off in nature? No, actually, there is some repeat order and some is single order, so both way. Okay. Got it. Sir, the employee costs are quite elevated in this quarter. What exactly is the reason for that? Have you hired new people in the subsidiary? Yeah. As of now, all department have new employees because earlier we have less because of office and of course, business scale like that. Especially bus AC and other business and as well heat exchanger. Now we have a complete team. I think now total strength we have 1,500+, and earlier it was much less. Of course, our cost is increased, but that we have to build because of to next stage of growth. All right. Got that, sir. I will come back in the queue. Yeah. Thank you. Thank you. Thank you. The next question is from the line of Pratik Giri from Shubhlaxmi Research. Please go ahead. Hi, Yadavji. Greetings. Yadavji, my first question is on, a lot of heating and cooling demand is primarily driven by data centers, and the kind of size of these data centers we are reading about is huge. I just wanted to get more understanding on the alternatives development for heating and cooling solutions in data center. I just wanted to understand, is there a process which can be developed where heating and cooling can be done without the heat exchangers itself? This question is more on the threat of substitution for our products. That is my question number one, Yadavji. Mm-hmm. Should I answer this or are you asking another? Yes, please. Actually, as of now, there is no technology or alternate things which can replace the heat exchanger. As of now, at least we do not know. There is another technology called liquid cooling. Liquid cooling, they are using another type of heat exchanger that is called plate and PHE heat exchanger, PPHE. Still the same technology, they use our product as well. Technology is quite changed in term of heat generation, actually. Earlier the same day, I think they may be, if they just compare maybe 5 kilowatt, but now it is maybe same that is the, like rejection the heat may be 100 kilowatt. It means, data they are cooling by liquid, but same room or complete other atmosphere, they are using our product fin and tube. Still that same product we are serving to our domestic and as well as North America. Even we started recently our export for same product to North America. North America, you can say in term of technology, they are compared to India, maybe they are better in term of 5 years, maybe 6 years. Still they are using the same product. You can say the answer is that this technology will not change. Till now, there is no technology they can use without heat exchanger, but still heat exchanger type can be changed in liquid cooling, but fin and tube also will be there. Understood. This is helpful. Mr. Yadav, you are saying that probably the mode of heat transfer may vary. It may be directly to the heat exchanger or via some liquid cooling or via some other solution, but ultimately the importance of heat exchanger won't go away because that is the core part which basically dissipates or collects heat from the environment. Yeah. In name also it's a heat exchanger, so it must be there. If you want to heat exchange, then you have to use heat exchangers. No, certainly, Mr. Yadav. Got it. Yadavji, my second question is on our exports revenue this quarter. I am seeing that this quarter, our export revenue has gone up significantly, sequentially and year-on-year, both ways. Should we take this as a base case in exports from here on? Can it grow materially from this number also, or is it going to be in the similar range for at least next few quarters? Directionally, if you can help us. Yeah. Same, I think I am answering the last quarter of the question also. Last year we achieved around INR 100 crore of export. This year we are planning to achieve around INR 200 crore, so almost double. Quarter 1, we achieved around INR 50 crore plus. Despite if you see like UAE decline because of war, but then also we achieved around- Yes 50 crore plus. We are in line to achieve around 200 crore. Our new facility, mainly we design based on export also. We also that we claim in earlier call, this facility of fin and tube business, we are planning to achieve at least 50% from export side. As of now, total business, we are on 20%. If you only separate fin and tube, then we are planning to achieve in next 2, 3 years, around 50%. Got it. Very encouraging. Last question before I join the queue back, Yadavji. I just wanted to understand if I try to break up the revenue of this 50 crore, probably our old facility was anyways able to do INR 160, INR 170 crore of revenue. I am assuming, and even consolidated management commentary also suggests that the new facility has been around INR 60, INR 70 crore of revenue. Is it fair to assume that in the coming quarters, this number will go up materially because we are very confident about our order book and INR 70 crore probably on that big facility is still very small. I have exact number. I think last quarter, heat we achieve around INR 140 crore and at HVAC, this new facility achieve around INR 115 crore plus, so the consolidated base is total INR 250 plus. Of course, quarter-on-quarter growth will be there that we already claimed. Of course, order in hand and the growth will be there quarter-on-quarter. Understood. I have few more questions. I will join the queue back. Thanks a lot. Yeah, thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one on your touchtone telephone. Ladies and gentlemen, if you wish to ask a question, please press star and one on your touchtone telephone. The next question is from the line of Trumen Seta from Dolat Capital. Please go ahead. Go ahead. Hello. Thank you for taking my question, and congratulations on the wonderful quarter. My first question is around the PLI and RIPS benefits. Can you shed some light on that? Any updates regarding PLI and RIPS? Yes. PLI, actually, the eligibility criteria is that once we will achieve this year INR 400 crore from fin and tube, then we can apply. We are assuming by quarter 3 or maybe early 4th quarter it will be achieved. During that time we will apply. Once we will apply, then they will approve, then we can claim it balance sheet. It still be not claimed. About RIPS, of course, our eligibility criteria fixed. We have an entitlement certificate. I think we receive around end of June. This quarter we will discuss with our auditor as a provisional base he will consider or not. By end of this quarter, we will let you know. Okay. Thank you so much. That was very helpful. I had one more question revolving around the data center orders at the export side. We see that the export to Europe and North America has increased. That is evident from the numbers. Can you shed some light about exclusively data center orders from export? Also, as the war has calmed down, do you see the revenue from UAE countries increasing? This export, I think I do not have a division in term of data center and other. That maybe let you know later. About UAE, still we are seeing war is continuing because actually freight cost increasing from earlier. It was around $1,500, but now it is around $6,000 per container. That is why maybe we are not cost competitive compared to other manufacturer. We are assuming once war will settle down, then business will increase from UAE. As of now, you can say it is still on slow pace. Okay. Thank you so much. I have a few more questions. I will join back with you. Thank you. Thank you so much. The next question is from the line of Mohit from Shukla Research. Please go ahead. Hi, sir. Hope I am audible now. Yes. Yeah, sir. Hi, good afternoon. Good afternoon. My first question is, given the ongoing geopolitical situation and the logistic cost increasing like you mentioned earlier, did we see any deferment of revenue recognition or shipments during this quarter, which will move on to the next quarter due to the war situation? No. Our revenue from Europe and North America, there will be no change. We have clear forecast and clear orders. We are achieving month-on-month basis. But of course, UAE still challenge is there because UAE difference is quite much. Earlier it was around $1,500, and now it's up to $6,000, something like that. So UAE is still down this quarter, we assume, but North America and Europe will be continuing. Okay, sir. Sorry to press again, but I was asking, the UAE revenue, if we have to book in this quarter, we have deferred it to next quarter. Is there any amount which hasn't been shipped yet to UAE? That actually, data I don't have. We have some PO, but what is the amount, I don't have actually data. But it's not like that we deferred for this quarter actually, because once they need, maybe they can buy from alternate supplier from other vendor nearby them. So it can be changed because now after war the situation is changed. We not calculate it like that. If they deferred, then we will ship later on, because if customer need this month, then we have to ship this month only. But then we have to negotiate with them as a freight cost. Last part of the ask us to ship some container and they offered us some additional freights and then we ship. But now number of container actually changed. This way actually it work. Okay, sir. My next question is, if you could please give us some color on the revenue contribution from bus segment during the quarter. Did we add any new OEM or major customers in this quarter? If you can give some details around them. OEM is bus AC or other segment as well? No, sir, for bus AC as well as other segment, both. Bus AC, customer wise, I do not have actual detail, but total 29 new customer we built in last quarter, but of course mainly from bus AC only because bus AC body builder is also there. OEM and including new body builder, our account bill to registered in SAP, 29 new customers, including export, domestic and HVAC as well. HVAC, still our run rate is around INR 5 crore-INR 6 crore per month. We are on track. We will achieve around 15% market share because we have the one MOU with one big customer, but their supply will start from next month, and then quantity is quite big. Maybe third and fourth quarter, we will have main revenue from HVAC. Okay, sir. Got you. Sorry if this question has been asked earlier. I just want to confirm, since we have seen a strong growth in North America business this quarter, could we assume the same quarterly run rate going ahead? I think so. It will same. Okay. Sir, thank you. These were my questions. Thank you. The next question is from the line of Mohammed Nami from Eiko Quantum Solutions. Please go ahead. Hi. Thank you for the opportunity. Earlier guided for 80% utilization by FY 2028, which translates to INR 2,000 crore revenue. Is this guidance still intact, or do you think you can achieve more revenue? No, it is still same. Okay. My second question is, in the recent interview you mentioned plans for further capacity expansion in Bangalore. By when will this new capacity start operating, and what is its potential revenue contribution? Yes. So actually, Bangalore we have to do because of nearby customer only. Around INR 100 crore business we are servicing from here only as of now. But because of this, especially some monsoon time, like road condition, sometime transportation damage. So customer's revenue is increasing or their demand is increasing, so they are asking to nearby. So we have almost five to six customer in South India. That is why we are planning to build one new facility near to Bangalore only. We already applied single window, so we assume in next four to six weeks, we will have land, and then immediately we can start the construction. As of now, we are planning in next one year, operation can start from Bangalore facility, but this same business we will transfer there. So maybe first year there will be no impact on our guideline, but once this capacity will full, then additional revenue we can receive from Bangalore facility. So you are saying that additional revenue will start after FY29 because you are shifting revenue from the current business to there, right? Yes. So this will be a major expansion or just a normal steady state, 10%-15% expansion in Bangalore? No, it is 10%-15% only. Not major. Okay. Sure. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one on your touchtone telephone. Ladies and gentlemen, if you wish to ask a question, please press star and one on your touchtone telephone. The next question is from the line of Pratik Giri from Shubhlaxmi Research. Please go ahead. Hi. Thank you for the opportunity again. Yadavji, my third question is on the kind of demand environment we are seeing in HVAC. I just wanted to get your opinion on the dialogue you might be receiving from our OEM customers. Because what happens is, in this probably super cycle era, a lot of OEMs are deliberately searching for newer vendors and newer sourcing geography. Just wanted to understand from our leading HVAC OEMs, are you seeing increased competition in vendor registration with these OEMs and participation from more players, unorganized, smaller players who are coming now to the forefront? New HVAC, I think, my personal opinion, in India, of course, all players I think are there. Of course, maybe some new player also can come, but in heat exchange segment, as of now, I think we are the largest other than OEM. Many OEM, especially room air conditioning, they make their own in-house or some dedicated vendor. But in industrial or commercial HVAC system, vendor or maybe OEM, they need complete infrastructure, including multiple geometry, or then complete infra to make the big coils. That segment, I think we are quite strong because we have now complete infra, multiple geometry, including backward integration, sheet metal and manifold. Such ecosystem as of now, I think we have only to serve to customers. If they need some batch quantity or small quantity to start up their production or assembly, of course they come to us and we supply to them. Like that only. Got it. You are not sensing any increased competitive intensity in the sector? As of now, you can say no, because demand is increasing. Because data center you can see is multifold and other. Small customer because now inventory and then working capital is quite challenging for this business. Because of copper and aluminum price. Yes. To survive a small vendor is not possible in this market. That is the advantage for us as of now. Got it. Yadavji, in fact, I would ideally congratulate you on the kind of performance we have delivered this quarter because this quarter was not an usual quarter. It was full of challenges, and yet we have maintained our margins, shown top-line growth. I think kudos to your team, Yadavji. No, thank you. Actually, really, this is our business beauty. We don't have seasonality and we don't have much impact because if UAE is down, then we increase to our North America. That is the portfolio, because our business is quite diversification in term of geometry, in term of geography, in term of applications. If such business is down, then we can maybe increase other business as well. That is the good things with us because of our product application or diversification or maybe multiple geometry. These are unique for us. Got it. My fourth question is on railways opportunity. I understand RDSO takes a lot of time before they give you bulky orders. What has been the status there? Probably one of our heat exchanger was in trial with railways. If you can throw some light on what's the current situation. Now, this last, I think 2 weeks before, there is one tender from CLW and we participate on the same and we have tabulation like L1, but these numbers still they not nominated. Maybe next 1 or 2 weeks they will nominate. Other tender, whatever come, of course, we'll participate. If we L1, then of course we will receive the business. This is about oil cooler. Other than this, also we started development for complete HVAC system for Indian Railway. We already have the team. I think now it's 5 to 6 people in that team. We are participating in coming tender for cab AC and complete HVAC system for Indian Railway. We are planning to develop these product within 1 year. Next financial year, we will have some revenue from complete HVAC system from railway. For oil cooler, of course, we will have some good numbers within this financial year. Very interesting. Just one clarification. You said we are already L1 in CLW's recent tender. Yes. They- What is the amount? Numbers. The total actually, tender, I think around INR 70 crore. We are eligible to maximum can get 20%. I think it should be around INR 8 crore for us. What number they will give is maybe in next one or two week it will clear. Got it. This tender is only for locomotives. These are not for the passenger coaches, right? No, it is for only loco. Yes. Okay. If we try to extend this same product line to passenger coaches, then what can be usual annual market size for that product? Will we be supplying directly to the railways or- Oil cooler, we have already multiple customer on board and we have already started supplying. This financial year, we are planning to achieve around INR 40 crore from this oil and cooler, and then it will be maybe multifold in coming year. We have, I think, many customer on board, but of course like development time and then mass production will take time. This oil cooler, I think business is also on track as of now. I am sorry to extend this point. This is last point. This oil cooler, when you are saying, this is the passenger coach AC system or what it is? It is different from that? This is actually oil cooler means, like in loco they use as a transformer oil cooling. It cannot be used in- Okay. But every engine can be used. It is oil cooler means, off-road vehicles, earth movers, compressor, where I think hydraulic oil use. Just you want to cool the oil, so that is they use as a oil cooler, many applications, like industrial application. Understood. Yeah, like transformer and then of course, forklift trucks, JCB and these applications. No, very clear. I am again pressing on this. This was for the locomotive. Now if I try to understand from passenger coaches, basically the coaches of Rajdhanis and the Shatabdis. There also this product, this HVAC system can go, which we are making. I mean the other product, not this for the loco, the other which we are making in our factory. This oil cooler only used in loco, not in bogie. Yes. But bogie, this HVAC system will use. That cab AC and then bogie AC we are developing. That will be coming business next year. Okay. That is FY 2028 plan. Yes. Got it. Very helpful. I am joining the feedback. Thanks a lot. Yeah, thank you. Thank you. The next question is from the line of Utkarsh Somaya from Micro Quantum. Please go ahead. Thank you for the opportunity. After you utilize your capacity and get a revenue of approximately INR 2,000 crore in FY 2028, do you have any further CapEx or expansion plans? Barring the 15% which you spoke about. Other than that, any other major CapEx plan? We have two plots, this one Bangalore and one nearby. For bus AC and this railway also, we are planning one CapEx nearby. We already bought the land. This is only two as of now. Can you tell me the quantum of the CapEx, both of them? This both will complete from now, I think within one year around, including land building and machine should be around INR 100 crore. Revenue potential will be how much of the INR 100 crore CapEx? So revenue as of now, these all things we are making at current Neemrana. So till now capacity utilization, there will be no top line will change, but once this capacity will fill, then it will add on both facility for bus AC separately and then heat exchanger separately from Bangalore and then nearby this. How much will that be? On INR 100 crore CapEx, what revenue can it generate? That I think I do not have in hand. So maybe I will let you know once we will calculate that. Nothing major planned other than this. No. Okay. When you reach INR 2,000 crore next year, you will have the benefit of your PLI scheme, plus the other scheme we spoke about, and there will be a lot of operating leverage. How do we see your margins? You are already at 19%. When you scale almost 3x from here, how much margin can you do on EBITDA? EBITDA, maybe from here, of course, incentive because it is the PLI for short time, but RIPS will be continued for at least 10 years from now. Okay. It should be around 20-plus EBITDA will be there. 21 is fair? 20 plus you can say. It can be 22, 23 also? It can be sometime, but not I can maybe say. You can consider 20 plus. Okay. And sir, when you scale up so much, will you need more working capital? For next 2 years, I think we have working capital as of now, but our profit will also add. That maybe we will calculate after 6 or maybe 1 year, then we will decide for next year. This quarterly interest of INR 3 crore, can we assume this will not increase or will it increase? This quarter it will not increase because I think this QIP money we receive, I think in end of June. This quarter, of course, it will be less. No, I mean this year in FY 2027 and FY 2028, how should we see your interest cost? For next 2 years, I think it will be maybe what last quarter, it will be much, much less, maybe. Oh, sir. Money for next 2 years at least. You will be able to scale so much without any incremental working capital, so no interest will go up, no interest cost will go up, right? Based on QIP, I think we calculated what we have. If you study our QIP document, we calculated for next two year, and that is sufficient for us next two year. If that is the same pace we are growing, I think no need to take money, other interest will not be there. But if we grow faster, then of course we will calculate again. Sir, if you do not need debt and you are not planning any CapEx, next year end, you will be sitting on a lot of cash, few hundred crores of cash. What will you do with so much cash on the balance sheet? I think that we also assume there will be cash in hand. Yes. No plans for such a big cash pile. You will probably have INR 300 crore-INR 500 crore of cash. That I cannot comment because we are going to invest INR 100 crore in CapEx also from our profit part. Okay, sir. Thank you so much and best of luck. Thank you. Anyone who wishes to ask a question may press star and one on your touchtone telephone. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you all. I think we hope we have made all question and we will continue come on next quarter with much better results. Thank you. Thank you. On behalf of KRN Heat Exchanger and Refrigeration, that concludes this conference. Thank you for joining us and you may now disconnect your lines.