Ladies and gentlemen, good day and welcome to the KRN Heat Exchanger and Refrigeration earnings conference call hosted by Dolat Capital. 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 the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Hiral Parekh from Dolat Capital. Thank you, and over to you.
Thank you, Yash. Good afternoon, ladies and gentlemen. On behalf of Dolat Capital, I am pleased to invite all of you to the Q2 FY 2027 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.
Hello, am I audible?
Yes, ma'am. Please go ahead.
Yeah. Thank you. Good afternoon, everyone, and thank you for joining us. On behalf of the management team, I would like to welcome all our investors, analysts, and partners to KRN earning call for the second quarter and first half of FY27. The first half of FY27 has been a strong period for KRN. Growth during the first half has been broad-based, coming from new customers, a wider product range, the ramp-up of our new facility, and a larger share of business from overseas markets. Our core Fin and Tube Heat Exchanger business continues to grow while the newer businesses are steadily adding to it. A larger part of this has come from our new facility at Neemrana. The initial months after commissioning went into approvals, customer audits, and setting up systems, which is natural for a plant of this size.
Over the last few quarters, more customers have been qualified, more products are being manufactured there, and the facility is contributing more meaningfully each quarter. Utilization at the facility still has room to improve, which leaves good scope for future growth from the existing capacity. Exports have been one of the most encouraging parts of the half. Our exports business nearly tripled during the half and now forms a much larger part of our revenue. The United State has become our largest export market, followed by Canada, France, the United Kingdom, and Italy. We have also served customers in markets such as the U.A.E., Vietnam, Sri Lanka, Brazil, and Nepal. Customers in North America and Europe are giving us more business, including new customers in the data center space.
The growing acceptance of KRN product in these markets is a good sign of the trust customers place in our quality and execution. Data centers, in particular, have become an important part of our business. Cooling requirements in this segment are rising, and customers are planning and placing orders well in advance. We are also keeping pace with how the technology is moving, including liquid cooling, and have started working on products for this space as well. In Bus Air Conditioning, which we entered last year, progress has been steady. We have started supplies to an OEM, added several bodybuilders as our customers, and are engaging with other OEMs, so we can add them as well. Though, as you know, approvals in this segment take some time, having the heat exchanger, tubing, and FRP in-house gives us a good base to grow this business.
As volumes have grown, we have kept a close watch on costs and working capital. Raw material cost movements are largely passed through to customers, and we have continued to add to our team across businesses to prepare for the next phase. Some of these investments add to costs in the near term, but we believe they are necessary to support growth of this scale. Now, coming to our financial performance. On a consolidated basis, revenue from operations for Q2 FY27 stood at INR 319.14 crore, a growth of 109.86% year-on-year from INR 152.07 crore in Q2 FY26. EBITDA grew 61.10% to INR 48.75 crore, with an EBITDA margin of 15.27%. Net profit doubled to INR 36.11 crore, up by 100.38% year-on-year, with a net profit margin of 11.32%.
For H1 FY 2027, consolidated revenue from operations was INR 571.45 crore, up by 113.75% year-over-year from INR 267.35 crore in H1 FY 2026. EBITDA more than doubled, rising 104.40% to INR 97.81 crore, with an EBITDA margin of 17.12%. Net profit grew 126.68% to INR 69.01 crore, and net profit margin improved by 69 basis points to 12.08%. Exports were a key contributor during the half. Exports revenue rose 192% year-over-year to INR 125.8 crore, and now accounts for 22% of total revenue, compared with 16% in H1 FY 2026. The United States was our largest export market, contributing to 43.7% of export revenue, and our top five markets together accounted for about 85% of exports. To sum up, the first half has seen strong growth with contributions from across the business. Demand for HVAC and refrigeration solutions remains healthy across data centers, infrastructure, mobility, and industrial cooling.
As we move into the second half, our focus will be on deepening customer relationships, building utilization at Neemrana, and developing products for newer applications. Before I close, I would like to thank our employees, customers, and our partners for their continued support, and all of you for your trust in KRN Heat Exchanger and Refrigeration. 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 their touch-tone 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. We will take our first question from the line of Mohit Chugh from Subh Labh Research. Please go ahead.
Hi, sir. Hope I am audible.
Yeah.
Yes, please go ahead.
Sir, my first question is, we have seen a decline in gross margin this quarter. Assuming commodity price remains elevated in H2 also, should we expect similar kind of margins in H2? Or do you expect margin recovery through price pass-on to our customers?
Yeah, good afternoon to all. So, of course, gross margin and EBITDA compared to first quarter died. Of course, we try to figure out what was happened, so we are almost 4 point. So, our freight cost for inward and outward is increased because suddenly increasing of the, especially for export side. So, it is around 1.8% - 2% it is there for freight cost only. And second one is the biggest material cost. So, current quarter, maybe last when we bought our average price, maybe there is the difference. So, material cost is quite high, around 1.8% - 2%. And third, especially with Daikin, because the price last quarter, they increased around 30% of the earlier quarter, but their bottom line is fixed with us. So, top line increased, but bottom line on the same way. So, in term of percentage, of course, it is down.
And some business promotion expense are also there. So, if I club these four, so it is contribute almost 3% - 4%.
Okay, got you. Also, sir?
Yeah.
Yeah, sir, please. You were saying something.
About future wise, sir, of course, this quarter maybe will go almost flat because this will have almost same scenario. Diwali festival also in North India, so we are almost two week, almost maybe not less work, but not holiday. But future side, we are quite strong because export side, if you see, earlier we expecting around INR 200 crore, but now we are expecting more than INR 200 crore. It can be reach around INR 250 crore. We have good pipeline and good forecast for next year as well. So, next year we expect almost another 60% - 80% of growth in term of export only. Domestic side also, particularly in data center, growth is quite good, beyond our expectation. So, like the top line guide, we are on the inline, maybe slightly up.
Okay, sir. Sir, sorry to press on this again, just to confirm, should we take EBITDA margin guidance for whole year FY 2027 in range of 17%- 18%? You think you said that this quarter will also remain flat?
As of now, because of this freight cost is still because of the war condition, I am not expecting it will go down because we can change price on quarter-on-quarter basis.
That is why I said, so next quarter, maybe quarter four will be slightly up, but quarter three, because still we see freight cost is still on higher side. So maybe you can consider on same what you said.
Okay, sir. Got it. My second question is on data center. We understand that you do not disclose your order book since we have short tenure orders. But if you could provide us an indication of visible data center order pipeline in terms of number of months or in ballpark value that is currently available for us, or we are waiting for that.
Actually, in the domestic side, of course, we have all data center customer onboard with us. Some of we are only single source with some of maybe 50%, some of maybe 60%. Rolling order will be continue with the domestic side. Export side is still, we are almost more than, like, you can say this year INR 50 crore plus order as on today, but it is also with them also is rolling. So total, if you see in particularly data center in H1, we almost achieve around INR 180 crore. If you compare to last year H1, it is around only INR 38 crore. So growth is there, and with maximum customer, we have rolling order. Like, they open only for one or two month, but some project if they are firm, then of course they can open for maybe three or four month, but not more than.
Okay, sir. Got it. Second question also on my data center. Since we are hearing that AI cycle is slowing down, and while data centers demand is currently, the cooling infrastructure demand is currently from AI data centers, but there are other opportunities as well that are growing, that is best HVAC-based system on downside of it from HVAC systems is installed, and also on biogas plants, there are chillers. Are we exploring these kinds of opportunities?
As of now, we don't have any slowdown particularly in our product. In opening remarks, we already said we are working on this brazed plate heat exchanger as well for this liquid cooling heat exchanger. As of now, we are focusing, of course, on our main heat exchanger and similar product like dry air cooler and open top condenser that also can use in data center or maybe on power plant cooling as well.
Okay, sir. Good. That was my questions. I will join back the queue. Thank you, sir.
Thank you. Next question is from the line of Vinit Agarwal from Bajaj Alternates. Please go ahead.
Yeah, thank you for the opportunity. Sir, I have two, three questions. First is, in terms of revenue, like in H1, we did INR 571 crores revenue, and for the full year, you had guided earlier around INR 1,200 crores kind of revenue. Since we already are around 315 kind of run rate this quarter, can we assume, like this year, full year, we would surpass the INR 1,200 crore kind of, somewhere between INR 1,250 kind of revenue or more than that?
As of now, if there is nothing like force majeure side or some tariff side from U.S.A., I think we can achieve what you said. Some uncertainty, especially global like tariff or maybe some war will increase, then of course export will then can be down. Otherwise, it will be up.
Export is doing well, like, which we are seeing, like it's around 400, which you guided. We are on track on that.
Export, I think we guided for INR 200 crore, and we are surplus. That's almost now we are going to achieve around 250.
Okay. And sir, on the other expenses, like this quarter we have seen jump, which you said because of freight cost. Is this also included some factoring cost charges, or are we seeing any warranty or Bus AC service cost like that, because of which we are seeing increase in other expenses?
The main contributor is freight cost only, but selling expenses also on the same head. Main contribution is by freight cost, especially for export side and some by import side as well.
On the other income, like this quarter we have seen significant jump. Does this include your RIPS incentives?
No, this particular about we have two incentives. One is PLI and the second one is the RIPS, Rajasthan Investment Promotion Scheme. These both we are eligible for particular this year, but I think we will report or not, our auditor will report in next year only once we have certificate, firm certificate by government. These are not included in other income. Mainly I think included interest what we achieved by FD from QIP money.
Okay, understood. Okay, that is it from me. Lastly, sir, in terms of working capital, if you can highlight some, because in your presentation nowhere there is mention about the working capital. How is it?
Yeah, about working capital, because of course this our new facility and we are ramping up quite fastly. But since last one and a half month or maybe you can say two month, we started working on working capital. This quarter we will have already some action, but in result you can able to see by end of this year, you will see some positive things about working capital for sure.
Okay. The cash deposit which you highlighted for end of FY 2027, can we see that.
Yeah, if our working capital will improve, then of course, cash flow also will improve. Both are linked.
Okay. Thank you so much for answering my question. Thank you.
Thank you. We will take our next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Sir, am I audible, sir?
Yes.
Please go ahead.
Yeah, ma'am. Thank you very much for this opportunity, sir. First up, wanted to understand, this year, the margins you are saying for FY 2027, 17% - 18% EBITDA margin for the entire year? Would that be a right understanding?
Actually, same question this ask, you can maybe by third quarter, I am seeing, but fourth quarter, of course, it will increase. But we want to understand it will, I can understand, remain same. That's why I said you can maybe understand. But it can be 1% - 2%, maybe plus side or maybe similar, like it's possible. Because still this freight cost and these things is under our control, that's why I said.
By fourth quarter, I mean, what you mean, third quarter will have similar margins as second quarter, and fourth quarter we might see 1%, 2% higher?
Yes.
Is that what you're trying to say? Okay.
Yes.
Okay. What is the margin differential between exports and domestic?
It also depend on product and customer. It is not very thumb rule, but of course, if you compare to average domestic and average export, it can be sometime maybe, like if I not consider freight cost, then it can be 4%-5% up.
4%-5% EBITDA margin higher?
Yes.
Okay. I think we have said in the past that we intend to have 50% kind of export, right? Which is currently, I think, 22%.
Yes.
Ideally, that would be margin accretive for us, right? Because as you go towards a higher and
Actually, you are right. Even initial customer like, of course, this year is still around 20% we have from Daikin. And Daikin is our bottom line is fixed. So top line is increasing, but bottom line percentage is down. Whatever new customer we are onboarding or export increasing, of course, they contribute on higher EBITDA margin for sure, especially including export.
What is the timeline for this 50% export mix? In how much timeline?
For heat exchanger, of course, I think our target is next year only. For heat exchanger product only. Yeah.
So, 50% export, we have target to reach in FY 2028, in exports?
Yeah, for Fin and Tube Heat Exchanger only, not total revenue.
Correct. And heat exchange form how much percentage of this first half revenue?
Honestly, this data I don't have on my hand, so maybe I can prepare and let you know.
Okay, sure. Just my last thing on the capacity utilization and order book. Just wanted to know what is your current capacity utilization of the plant and how we intend to increase that over next two years, and do we maintain any kind of order book? If you can specify that.
Order book, of course, we do not have much detail because our order is rolling from all customers. You can consider rolling order book only. About capacity utilization, this year we are going to achieve around 50%, and next year our target is to achieve 80% capacity utilization for all. Of course, all these are almost utilized for new. KRN HVAC Products Private Limited will be 80%.
50% capacity utilization of the FY 2027 and 80% FY 2028, right?
Yes.
Full revenue potential of this plant is INR 1,800 crores. Would that be a right understanding?
That I think I cannot comment, but utilization I think it will, because metal price also will impact, not revenue.
Okay. I think we have said in the past, right? I mean, in terms of revenue potential of this plant at 100% utilization. I was just trying to understand what is our revenue potential?
The same thing I am trying to say, if metal price will go up, then of course, then these numbers will be slightly higher. If it goes down, then what you said, I think it is the same way, maybe you can consider.
Got it. That is very helpful, sir. I mean, that is very helpful. That would be it from my side. I would like to wish you all the best. Thank you so much.
Thank you.
Thank you. We will take our next question from the line of Pratik Dharmshi from Union Mutual Fund. Please go ahead.
Yeah. Thanks for giving the opportunity. Santosh ji, many congratulations for the good set of numbers. My question was on the opportunity lying ahead for you guys. You mentioned in the past electric bus, Vande Bharat train, sort of opportunity coming up. How is the traction you are seeing on that front, and what would be the market opportunity you are eyeing in next three, four years coming from this side?
So particular Bus Air Conditioner business, of course, market is, as of now, I think INR 1,000 crore for India market, and it is growing, I think, 25%-30%, and especially on electric side. So we are already supplying to electric bus, and I think we will have some good approvals within next one or two months, especially for electric only. So this business is growing. About railway, we already have team, and we already made the proto. Even, I think, in coming two week, we will have railway team also for our plant approval, especially for coach air conditioning. Once we will have plant approval, then we can able to participate in the coming tender for Indian Railway. First it will start for driving cab, then LHB coaches, then we can maybe slowly enter on the Vande Bharat and of course, then metro.
This will be a long journey, but we are expecting around INR 20 crore of revenue from Indian Railway, particularly to HVAC system by next year.
Got it. Second, again, sorry for harping again on margin front. Obviously, in the short term, because of freight cost, et cetera, we are seeing some pressure on margins for a quarter or two. But on a steady state basis, with more data center, more export opportunity, logically, the margin band should remain between 18%-20% over medium to long term, right? Not the short term.
Yeah, for long term, you said rightly, because our export revenue will grow, and especially we will have slightly up margin, especially from data center industry. Of course, both incentive will also contribute, especially from next year. So, margin will be slightly up. Of course, this quarter we have slightly hit in EBITDA, what I said.
That's okay. Last one, on the revenue growth side, you mentioned that there is scope to improve from previously guided number of INR 1,200 crore range to maybe INR 1,250. On a steady state basis, post this year, 25 odd percentage CAGR growth can be doable with the opportunities in terms of export, data centers, bus, railway, multifold. What would be the ideal number one should work with over next three, five years?
Next year, of course, our growth will be much higher, what you said. But maybe after next one year, then maybe minimum you can consider, of course, 30% will be very good. We have multiple product portfolio on our table now. And of course, new customer as well on new product line as well. Now we are also going to enter complete HVAC system as well, especially cold storage unit and then dry cooler, open top condenser. This help to contribute in good revenue and margin as well. So that product line also, we started to selling on our own design, and also we are making for OEM as well.
Got it. And this also includes the opportunity in the U.S. and exports, right, for data centers, where you already have committed orders?
For exports, as of now, mainly we are doing Fin and Tube Heat Exchanger only.
Got it. Yeah. Thanks a lot, and once again, many congratulations. Thank you.
Thank you.
Thank you. Next question is from the line of Neel from SageOne. Please go ahead.
Yeah, thanks for the opportunity. I have a question on the supply chain. Starting next month.
I am sorry, Neel, can you use your handset mode, please? Your audio is not very clear.
Sure. Is this better now?
Yes.
Yes.
Yeah. My question was mainly on the supply chain side. Starting next month, BIS for copper tubes is coming in. How would that impact our profitability as well as if you can comment on the availability of it, because all of it has to be now sourced domestically.
We will have three tool particular to this topic. First is, of course, we increase our some inventory, what our government allowed 50% of the last year you can buy, so that we already have in our stock. This is the first. Second, of course, we are trying to develop local supplier as well. We ask for sample and plant approval. Third, we have tool especially to consider export is Advance License. We can buy material against Advance License to control our supply chain. Same things we can able to pass on to our customer, whatever price we will receive from domestic, so we can able to pass on from next quarter to our customer as well. As of now, for us is, I think, no challenge. Already two manufacturers is there, particularly to IGT copper tube.
Also one is MetTube, they are already supplying, and second is the Hindalco. They already started supplying to other OEMs. We are also trying to get same material from them. Plain copper tube, still BIS is there from outside and locally both. We are using both. That is why we can able to manage our supply chain.
Okay, got it. Also, 5 mm tubes are domestically available today?
Yes, MetTube is making.
Okay, got it. Any other product in the supply chain where you feel that some kind of constraint or in terms of availability or price fluctuation, major price fluctuation is foreseen in the near future?
For us, I think there is no other product. Some is this compressor for particularly to Bus Air Conditioning. So that also we are trying to develop locally by our Bus Air Conditioning team. Other than this compressor, I think we don't have any challenge. Copper tube and compressor only two thing for us.
Okay. That's all from me. Thanks a lot.
Thank you. Next question is from the line of Hoshang Hinduja from Elios Financial Services. Please go ahead.
Hi, can I add my audio?
Yes.
Yes.
Sir, just one question. With regards to, could you, if possible, maybe you know, giving the revenue breakdown as per the product segment, you know, with regards to Fin and Tube and Bar and Plate and complete HVAC systems and like, as per the bifurcation that's given in the investor presentation, would it be possible to share that?
Actually, this data I don't have in front of me, so maybe you can write down the mail so we can able to provide by mail. Because it's a multiple product portfolio.
Okay.
Yeah.
One more question, sir. In the last call, I think you had mentioned that with regards to the electric bus, I think the aim is to, I think, achieve 15% of the total market share, right? One question is, like, what according to you would be the total market share, and by when would you achieve this or have already achieved this thing? Maybe in a quarter or two, would you be achieving it, or could you just share that as well?
Total market, including electric and of course conventional, both market is INR 1,000 crore, not only electric. So electric is one of the part of them. And what we said, 15%, so slightly we are maybe lower side compared to this H1, but we are hopeful that H1 we will have more revenue compared to H1, particular to Bus Air Conditioning, our division, because we will have some approval, maybe slightly delay by OEM, or maybe you can say process of the part. Maybe I can.
Maybe, perhaps, we can say by FY 2027, say, still we would achieve that market share roughly, or at least pretty close to it?
Maybe, I think precisely I can maybe able to comment on maybe Q3, it will be better. Now I think we are on maybe slightly down compared to what we, in term of percentage of the market share.
Okay. One more question. You mentioned in the call that with regards to exports, currently only Fin and Tube product segment is being exported, right? If I'm not wrong, the Bar and Plate and the complete HVAC systems and the Bus AC are, like, if I'm not wrong, the highest margin product segment, correct? Would you be planning to get into exports of that? Also, could you just comment on a bit on the margin profile on a broad basis on the segment-wise? Let's say, a Bar and Plate, the segment that has a high margin compared to, let's say, refrigeration components or not. Just to get an idea on the product mix of the company.
Yeah, of course, Bar and Plate margin is slightly up, but as of now, we are focusing on domestic customers. Once we will, like, prove we have good revenue from domestic, then of course we can able to pitch on export side as well, or whatever we have same customer, if they are using, of course, we are sending our company profile to them as well. Compared to our Fin and Tube heat exchanger, Bar and Plate, we are slightly up margin, and in term of assembly, of course, Bus Air Conditioning also we are slightly good. This refrigerator components, we are slightly down compared to our Fin and Tube Heat Exchanger. Then complete HVAC system also we have compared to our Fin and Tube heat exchanger good margin because it's all parts, so we have, like, in-house manufacturing, especially sheet metal and then tubing and of course then heat exchanger.
This is the idea.
Just last, one last final question. You had mentioned in the call that in Q4 there will be slight improvement in the margin. I mean, I understand currently due to the exports there is kind of like the cost have gone up. Just can you just explain the reason why Q4 would be improved, like considering you mentioned Q3 would be flattish or muted according to that? Just the last question from my end.
We are expecting our top line will slightly good compared to Q2 and Q3 on Q4, then we will have, of course, our operating leverage, and export also we're expecting slightly up on Q4, that's why I said.
Understood. Okay. I'll just take you for anything else. Thank you so much.
Thank you. We'll take our next question from the line of Achyut Pabbat from Dukin Capital. Please go ahead.
Yeah. Hello, sir. In the investor presentation, you mentioned that some new customers are qualified and you are planning to onboard them. Can you give a hint on from which sectors these customers are and how large are they?
Actually, we have a new customer on all segments. It's different, I think, their revenue. Actually, I don't have this detail because Bar and Plate also we have new customer, Bus AC also we have new customer, then refrigerator component also we have new customer, and complete HVAC system also new customer, and then of course Fin and Tube also we have new customer. If, like, because some customer we shifted from KRN Heat to KRN HVAC as well, total I think we new customers last quarter build around 30 +, including all segment. But revenue-wise.
Okay. Any new big customer from the data center you are onboarding, sir? From data center.
Yeah, of course. From export side, North America, we have added one big customer as well.
Okay. On capacity utilization, when can we, I mean, by FY 2029 or FY 2028, when we can utilize the capacity completely, and what is the top line we can expect, sir, with 100% utilization?
Next year we are expecting 80%, and parallely we are going to open one new facility for South India in Bangalore, so that some capacity we will shift to Bangalore as well. So 80% utilization also we say almost full, then of course we will additional capacity we will use from Bangalore only after next year.
FY 2029, is it possible for you to tell what is the maximum top line we can do, sir, FY 2029?
To tell top line is difficult for me, maybe I can comment on capacity only.
Okay. So, in FY 2029, what will be the growth in capacity terms, sir, with the current installation?
Next year 80%, and then you can consider 30% growth.
Okay, sir. Thank you.
Thank you. Next question is from the line of Dhimant Shah from ITI Mutual Fund. Please go ahead.
Yeah. Hi. There does not appear to be any problem with the size of opportunity with you. But clearly, can you just walk us through how you maintain your working capital cycle? Because last year, FY 2026, also we saw huge operational cash flow from operations negative. Which means that maybe pre-season you built up inventories for supply in the first quarter, which is usually the best, if I get it correctly. Can you just walk us through on two parts, on the average working capital cycle and how does the pass-through of the raw material happen for each metal part or the plastics, as the case may be? If you can just help us on that.
Yeah. So, of course, our inventory in term of, if you see, like compared to balance size or number of days, is quite high because of multiple reason we already explained, especially this BIS certification. But still, we are expecting by end of this year, we can able to control our inventory because we started some monitoring and we started some SAP system to control the inventory so that you can see in our results by end of this year balance sheet. And to improve our working capital, we are working on inventory and we are second working on the factoring. So, export side, we will use the factoring and also for import side, we will have buyer's credit for import. So, that also will help to improve our working capital. So, our finance department already started working on these two as well.
So, by end of this year, we will able to control our cash flow, working capital, and inventory. And other side, what you said about material, of course, quarter on quarter basis, we can able to pass on all things, including the plastic, of course, we are not using plastic, but aluminum, copper, and then this stainless steel. And of course.
No, in the assembly, you don't use plastic, sir? In the complete assembly, there would be injection molding parts, right?
No, we don't have much, very maybe few or very small size of part because complete HVAC system we are making by stainless steel or galvanizing iron with powder coating and then fan, this is the outboard part with this surrounding. And of course, Bus Air Conditioning main part is FRP, it's not plastic actually. So, maybe some small part plastic will be there, but maybe not in percentage, very, very few, maybe only very small part.
Okay. Okay. And overall, as you make, is there some pricing power in new customers initially as you customize for them, or there is no pricing power whatsoever after a particular time?
No, of course, if customization is there and part is critical, being a backward integration with delivery and quality, we have some power, you can say, with some of customer, some of product.
Then why should the pass-through be in a volatile time? Why should the pass-through be quarterly, sir? I just wanted to understand. Should it not be possibly monthly or two monthly?
So, actually, this is the price pattern, actually.
No, no, meaning in only volatile times like these, possibly not non-volatile times, it can revert back to quarterly. But in volatile times, can it be monthly? Because if you see INR 13,000 for copper and then going to INR 14,000 in less than a month, then what do you do?
No, no, you understand, but our mainly work is not project-based actually. We have regular work with the same OEM. And of course, each quarter revenue also almost same way or growing side only. You have to follow some price contract as well, because if there is the price deal also, then our customer will not ask. I think everything that otherwise each month we have to change the PO and it will be difficult to run the long way.
Okay. Secondly, could you also help us understand this BIS norms, to what extent are you seeing an increase of take and all of that? Meaning, are we seeing a sort of clampdown on imports and more higher ordering for us? Is that what you have actually experienced?
Especially for IGT tube, I think government maybe it is quite strict now. Earlier they maybe put on plain, but now on IGT side. They allowed only 50% import you can buy compared to last year. But we have tool Advance License also because we do export also. For export, we can buy without BIS or anything. This is easy for us and we have time to close this Advance License for next three year. But of course, now domestic supply is also big, so government is want to just Make in India support. As a manufacturer, we have also follow. Of course, we will use for domestic supplies from locally and for export, we will use import also.
Okay. Great, sir. I will come back and get to you. Thank you. Thank you for now.
Thank you.
Thank you. Next question is from the line of Abhisar Jain from Monarch AIF. Please go ahead.
Yeah. Hi, sir, and congratulations for a good scale-up in the top line. My question is that Komal mentioned that we are developing some products for the liquid cooling also for data center. Can you throw some light on what would be that product and how far we are from commercializing it?
So, of course, main product related to our heat exchanger only, so it is brazed plate heat exchanger. We are working on to develop this because some technology we have already for to brazing that products. It need vacuum brazing, so that we have already to which we are using in Bar and Plate heat exchanger. We are working on to develop this, but it will take another next one and a half year from now, you can say. So next financial year also production will not come, but after next 2028, maybe 2029, we will have some revenue particular from this product.
Right, sir. And sir, if you can give an indication of how much does the content go down in a data center if it is liquid cooled versus air cooled, because our products are more exposed to the air cooling part of the data center cooling mechanism. Is there any thumb rule or indication on that side?
No, I think maybe I can maybe try to explain again about this concept. So earlier also, I have some confusion, but now I am more clear about liquid cooling and air cooling. So, if like earlier, maybe data, maybe storage in particular one room, they maybe store maybe 10 kW, you can just to assume, and they cool by air liquid only, complete room. But now on same rack, we are can able to load maybe more than maybe 1,000 kW of the data, and then this particularly data they can able to cool by liquid cooling, but this room is still they have to cool by air cooling. So, it means our product will remain same on indoor side, and outdoor side, our product will be there in term of chiller heat exchanger or maybe dry air cooler heat exchanger.
You can see outside there will be no change. Indoor side, our product will remain same, but additional this brazed plate heat exchanger will be add in CDU.
Understood, sir. Sir, just wanted to know on this Thermotech Research Laboratory that we had started, I think, some time back, that gives us the advanced testing capabilities. How is that progressing and how is that increasing your capability to do more complex products as we move ahead in our journey? Can you throw some light, sir, what are the capabilities that we are able to get from there?
Yeah. Earlier, we are making heat exchanger as per customer design only, and we do not have any things to test to them. If customer ask particular some design, we can able to make and we can send to them, and then we are waiting for their feedback about approvals. Sometimes they said, "Okay, your product is not performing because of this reason. Your pressure drop is not good or maybe capacity is not good." Now, we can check the same product in our laboratory, and if our product is performing in our laboratory, then we can able to say to the customer, "Of course, your product is performing. Maybe you have some other problem." This is the first concept. Second concept, we can give the some value engineering in term of to keep same footprint, but we can change the geometry.
In layman language, you can consider we can reduce the copper weight, and we can match the capacity of the old version to keep same footprint. Then customer have some saving. Maybe we can pass on some saving to customer, and we can keep some saving with us. It means we can design new product for our customer. Third one, we can test our individual product as well, like a complete data system, like as a business case. This is a third-party laboratory. As of now, we are already started testing for our own product. Now, NABL testing is going on, so we are expecting in next four to five week, we will have NABL certification for this laboratory, and then we will go for AHRI certification.
So then, outside business will start maybe after two, three months once we will have NABL and AHRI, but our internal testing, we already started since two, three months back.
Understood, sir. And sir, there is a last question on the competition. So, in our range of products, and now, of course, we have expanded the range to HVAC systems and the product business that we have in refrigeration and Bus AC. So, sir, how is the competition reacting, considering everybody in the industry might be looking at our scale-up and our growth? Who are the key competitors that you are seeing already on ground or coming up for both coils as well as for all these products that you are making?
I think now there are multiple competition for each products, different competitors. So, Bar and Plate, of course, there are different type of industry. So mainly, they sell to Indian Railway, and we are also trying to sell it to Indian Railway. And then other off-road vehicles are heavy earth movers customer as well. So, there is a different set of competitor. But still, this Bar and Plate, many customer is importing, so now we are trying to give confidence to them as well. So, they started slowly with us. Particularly in Bar and Plate. Other than this, refrigerator component also, I think three competitor is there, particular to that industry only. And then Bus Air Conditioning also, almost three competitor is there, particular to Bus Air Conditioning industry as well.
Heat exchanger, of course, is all about complete HVAC system also, like particular to dry cooler and then this refrigeration complete HVAC system also different set of the competitor. But honestly, we don't see to our competitor to like trying to particular in our segment, but we do our best and we develop product and we believe quality, cost, and delivery. So if customer get these three things, then I think we can able to survive without any issue.
Understood, sir. Thank you and best wishes.
Yeah.
Thank you. Next question is from the line of Heta Vora from Boring AMC. Please go ahead.
Hello?
Yes.
Yes, we can hear you. Please go ahead.
I just had two to three questions. Firstly, in FY 2026, I believe we added some 70 odd new customers. Would you have the split of what is the revenue contributions from these new onboarded customers in our current revenue?
This data I don't have. Maybe you can write down the mail, maybe we can provide by mail.
All right, sure. And, sir, secondly, in Q2 FY 2027, what was the revenue contributed from data center orders?
Okay, so data center, that revenue I have. So data center, Q2 revenue contributed around one.
The current.
Yeah, Q2 is INR 116 crore. So INR 116 crore.
INR 116 crore. And what was the same figure in Q2 FY 2026, same quarter last year?
Yeah, it was INR 18 crore only.
Okay.
Total, if you, let's see, H1. H1, our 2025-2026 revenue was around INR 38 crore, close to INR 38 crore. And this H1 2026-2027 is around close to INR 180 crore.
That's a phenomenal growth from this sector, sir.
Yeah.
Are we expecting the similar line, the similar CAGR going forward as well from data center?
Yeah, as of now, yes.
Okay. What is the execution timeline of these orders? Is it the same as our normal commercial AC orders?
Yeah, if we have forecast or if we have like continue customer running, then of course same time, but for new development, sometime it took almost six months to eight months.
Okay. So we are also going ahead with developing new products for the customers?
Like new customer, of course, we always open because we do always exhibition, especially in Europe and North America and of course India. So if same portfolio, new customer, we always welcome our new customer as well.
Thank you. That was the last question for today. I now hand over the call to management for concluding remarks. Over to you.
Yeah, so thank you all to attend this call, and I think we try to clear all what you asked, and I am quite confident for this coming next two quarter as well. So what we said, I think we will achieve our top line slightly up, and of course, we control to maybe bottom line as well. Especially we are quite good optimized by export, especially data center industry and other product as well. So really thanks to all. Thank you.
Thank you, members of the management team. On behalf of Dolat Capital, that concludes this conference. Thank you all for joining us today. You may now disconnect your lines.