A MultiBagger in Making?
Let's take a deep dive into a good insightful study of one of the top heat-exchanging stocks in India 🧵
India’s cooling needs are heating up!
With the HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) market projected to grow from $7.8 billion in 2021 to a whopping $27.4 billion by 2030, the demand for Heat Exchangers will skyrocket
Key drivers:
🏬 Real Estate
🔩 Manufacturing
🏚️ Warehousing
🚎 Commercial Transportation
🛜 Data Centres (growing at 50% annually)
🤝This post is a collaboration with @MrTalkStock
Let's take a deep dive into a good insightful study of one of the top heat-exchanging stocks in India 🧵
India’s cooling needs are heating up!
With the HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) market projected to grow from $7.8 billion in 2021 to a whopping $27.4 billion by 2030, the demand for Heat Exchangers will skyrocket
Key drivers:
🏬 Real Estate
🔩 Manufacturing
🏚️ Warehousing
🚎 Commercial Transportation
🛜 Data Centres (growing at 50% annually)
🤝This post is a collaboration with @MrTalkStock
KRN Heat Exchangers
Let's dive in top financials
✅ Mkt Cap:₹4,871 Cr
✅ CMP:₹784/-
✅ P/E:122x
✅ Return Since Listing (3rd Oct 2024): 62%
✅ IPO Listing Price: ₹485/-
👉 Founded in 2017, KRN operates from an industrial hub in Neemrana, Rajasthan x.com
Let's dive in top financials
✅ Mkt Cap:₹4,871 Cr
✅ CMP:₹784/-
✅ P/E:122x
✅ Return Since Listing (3rd Oct 2024): 62%
✅ IPO Listing Price: ₹485/-
👉 Founded in 2017, KRN operates from an industrial hub in Neemrana, Rajasthan x.com
👉 Revenue split:
🏡 Household Segment (Room ACs): 2.5%
🏭 Industrial Segment: 97.5%
Its stellar IPO listing, and performance thereafter reflects the massive growth potential in India’s cooling ecosystem
#KRNHeatExchangers
🏡 Household Segment (Room ACs): 2.5%
🏭 Industrial Segment: 97.5%
Its stellar IPO listing, and performance thereafter reflects the massive growth potential in India’s cooling ecosystem
#KRNHeatExchangers
Business Model: Cooling Solutions Simplified
👉KRN manufactures fin and tube heat exchangers– critical for cooling and heating systems.
👉What do they make?
Condenser and evaporator coils – essential for transferring heat in ACs, refrigerators, and industrial setups
👉Where are these used?
🚂 Cooling Data Centres and Metro Rails
🏭 Industrial cooling applications in Transportation, Oil & Gas, and Warehousing
Built for durability, KRN’s advanced coatings ensure long-lasting performance in tough conditions.
#investing #education
👉KRN manufactures fin and tube heat exchangers– critical for cooling and heating systems.
👉What do they make?
Condenser and evaporator coils – essential for transferring heat in ACs, refrigerators, and industrial setups
👉Where are these used?
🚂 Cooling Data Centres and Metro Rails
🏭 Industrial cooling applications in Transportation, Oil & Gas, and Warehousing
Built for durability, KRN’s advanced coatings ensure long-lasting performance in tough conditions.
#investing #education
Key Clients: Trusted by Industry Leaders
KRN’s clientele includes some of the biggest names in HVAC&R:
👉 Daikin India (prime customer since inception)
👉 Schneider Electric
👉 Carrier
👉 Voltas
👉 Godrej
👉 Eberspächer
👉 Blue Star
These partnerships highlight KRN’s quality, innovation, and reliability
KRN’s clientele includes some of the biggest names in HVAC&R:
👉 Daikin India (prime customer since inception)
👉 Schneider Electric
👉 Carrier
👉 Voltas
👉 Godrej
👉 Eberspächer
👉 Blue Star
These partnerships highlight KRN’s quality, innovation, and reliability
🔎At Magnus Hathaway, we focus on high-conviction, research-driven stock recommendations just like this
🎯If you're enjoying the depth of this analysis, imagine what our full advisory service could offer
👉Check it out here: magnus.alphaquark.in x.com
🎯If you're enjoying the depth of this analysis, imagine what our full advisory service could offer
👉Check it out here: magnus.alphaquark.in x.com
Product Portfolio: Powering the Cooling Revolution
KRN specializes in fin and tube heat exchangers, made from high-quality Copper and Aluminium
Core Products:
🔩 Condenser Coils (55% revenue): Enable efficient heat transfer in ACs and refrigeration
🔩 Evaporator Coils (37% revenue): Key for thermal efficiency in cooling setups
🔩 Fluid Coils, Steam Coils, Header Parts, and Sheet Metal Parts:Customized solutions for diverse industrial applications
#investing #portfolio
KRN specializes in fin and tube heat exchangers, made from high-quality Copper and Aluminium
Core Products:
🔩 Condenser Coils (55% revenue): Enable efficient heat transfer in ACs and refrigeration
🔩 Evaporator Coils (37% revenue): Key for thermal efficiency in cooling setups
🔩 Fluid Coils, Steam Coils, Header Parts, and Sheet Metal Parts:Customized solutions for diverse industrial applications
#investing #portfolio
Use Cases
🚂Transportation: used in Truck refrigeration, Bus AC, Metro AC, Defence vehicles
🏭Industrial Applications: used in sectors like Oil & Gas, Power Generation, Chemical Processing, Warehousing etc.
🛜Data Centres: helps to maintain optimal temperature for Servers
🏊♀️Swimming Pool Heat Pumps: Ancillary solutions for maintaining consistent water temperatures
🚂Transportation: used in Truck refrigeration, Bus AC, Metro AC, Defence vehicles
🏭Industrial Applications: used in sectors like Oil & Gas, Power Generation, Chemical Processing, Warehousing etc.
🛜Data Centres: helps to maintain optimal temperature for Servers
🏊♀️Swimming Pool Heat Pumps: Ancillary solutions for maintaining consistent water temperatures
Manufacturing Facility
KRN operates a state-of-the-art facilityin Neemrana, Rajasthan, with capacities of:
👉 566,551 evaporator and condenser coils
👉 618,667 header parts
👉 556,800 sheet metal parts
FY24 saw 84%+ utilization, reflecting strong demand and operational stability
KRN operates a state-of-the-art facilityin Neemrana, Rajasthan, with capacities of:
👉 566,551 evaporator and condenser coils
👉 618,667 header parts
👉 556,800 sheet metal parts
FY24 saw 84%+ utilization, reflecting strong demand and operational stability
6X Capacity Expansion
KRN is turning away business due to capacity constraints. To meet surging demand, it’s embarking on a 6X capacity expansion:
👉 Phase 1: Expanding from 12 KLPD to 30 KLPD by early 2025
👉 Full expansion expected within 2 – 3 years
This move will drive 50% revenue growth in FY25, with a target of ₹2,000 Cr sales by FY26
A significant share of the new capacity will cater to exports to North America and Europe
KRN is turning away business due to capacity constraints. To meet surging demand, it’s embarking on a 6X capacity expansion:
👉 Phase 1: Expanding from 12 KLPD to 30 KLPD by early 2025
👉 Full expansion expected within 2 – 3 years
This move will drive 50% revenue growth in FY25, with a target of ₹2,000 Cr sales by FY26
A significant share of the new capacity will cater to exports to North America and Europe
Industry Outlook: A Favorable Landscape
KRN is a clear proxy for India’s booming AC and cooling industry
🔷Industrial vs. Household Growth:
Industrial segment (95%+ of KRN’s revenue) is growing 25%–50% annually, outpacing the 8%–9% growth in the room AC market
🔷Global Opportunities:
Anti-dumping duties (25%) on Chinese imports and the "China-plus-one" strategy are boosting exports to Europe and North America
KRN is a clear proxy for India’s booming AC and cooling industry
🔷Industrial vs. Household Growth:
Industrial segment (95%+ of KRN’s revenue) is growing 25%–50% annually, outpacing the 8%–9% growth in the room AC market
🔷Global Opportunities:
Anti-dumping duties (25%) on Chinese imports and the "China-plus-one" strategy are boosting exports to Europe and North America
🔷Rapid Urbanization and Rising Incomes:
Increasing demand for household air conditioning and refrigeration systems
Margin Improvement and Exports: Key Drivers
1️. Rising Exports:
👉 Exports grew from 9.57% in FY22 to 19% in Q2 FY25
👉 Higher margins in exports are driving profitability
2️. Cost Savings:
👉 An 8 MW solar plant at the new facility will cut electricity costs
3️. Tax Incentives:
👉 A 10% tax reduction under India’s new tax scheme, and state incentives from Rajasthan’s RIPS ‘24 policy
Increasing demand for household air conditioning and refrigeration systems
Margin Improvement and Exports: Key Drivers
1️. Rising Exports:
👉 Exports grew from 9.57% in FY22 to 19% in Q2 FY25
👉 Higher margins in exports are driving profitability
2️. Cost Savings:
👉 An 8 MW solar plant at the new facility will cut electricity costs
3️. Tax Incentives:
👉 A 10% tax reduction under India’s new tax scheme, and state incentives from Rajasthan’s RIPS ‘24 policy
Alpha Point: The Data Centre Opportunity
Cooling systems account for 40% of a Data Centre’s energy consumption, with a bulk of it going towards maintaining ambient temperature and air quality inside the premises
This makes efficient thermal management critical
KRN’s Data Centre segment:
👉 Contributes 7% of revenue, with clients like Schneider Electric
👉 Growing at 50% annually, presenting immense potential
Cooling systems account for 40% of a Data Centre’s energy consumption, with a bulk of it going towards maintaining ambient temperature and air quality inside the premises
This makes efficient thermal management critical
KRN’s Data Centre segment:
👉 Contributes 7% of revenue, with clients like Schneider Electric
👉 Growing at 50% annually, presenting immense potential
Risk Factors to Consider
1️. Valuation Concerns:
At 122x PE, valuations seem stretched, but expected profit growth from capacity expansion should normalize this
2️. Customer Concentration:
34% of revenue comes from the top customer; losing key clients could impact business
3️. Import Dependency:
70% of raw materials are imported, posing supply chain risks
4️. Project Delays:
₹227 Cr capacity expansion may face delays due to machinery or approvals
1️. Valuation Concerns:
At 122x PE, valuations seem stretched, but expected profit growth from capacity expansion should normalize this
2️. Customer Concentration:
34% of revenue comes from the top customer; losing key clients could impact business
3️. Import Dependency:
70% of raw materials are imported, posing supply chain risks
4️. Project Delays:
₹227 Cr capacity expansion may face delays due to machinery or approvals
Financial Performance: Consistent Growth
✅Q2 FY25 Results (YoY)
👉Revenue: ₹71 Cr ➡️ ₹99 Cr (Up 39.44%)
👉Operating Margins: 19% ➡️ 18%
👉Profit: ₹9 Cr ➡️₹12 Cr (Up 33.33%)
✅FY24 Full Year Results
👉Revenue: ₹246 Cr ➡️ ₹308 Cr (Up 25.20%)
👉Operating Margins: 20% ➡️ 19%
👉Profit: ₹32 Cr ➡️₹40 Cr (Up 25%
Margins remain steady at 18–19%, with high-margin products like condenser and evaporator coils leading the way. Product mix expected to be even more favourable going ahead.
✅Q2 FY25 Results (YoY)
👉Revenue: ₹71 Cr ➡️ ₹99 Cr (Up 39.44%)
👉Operating Margins: 19% ➡️ 18%
👉Profit: ₹9 Cr ➡️₹12 Cr (Up 33.33%)
✅FY24 Full Year Results
👉Revenue: ₹246 Cr ➡️ ₹308 Cr (Up 25.20%)
👉Operating Margins: 20% ➡️ 19%
👉Profit: ₹32 Cr ➡️₹40 Cr (Up 25%
Margins remain steady at 18–19%, with high-margin products like condenser and evaporator coils leading the way. Product mix expected to be even more favourable going ahead.
It's a wrap readers
🔎If you found this thread valuable, you'll love the detailed research and personalized recommendations at Magnus Hathaway
📈We’re all about building portfolios that deliver results
📊Join our advisory service today and take your investing to the next level: magnus.alphaquark.in
🔎If you found this thread valuable, you'll love the detailed research and personalized recommendations at Magnus Hathaway
📈We’re all about building portfolios that deliver results
📊Join our advisory service today and take your investing to the next level: magnus.alphaquark.in
Found this thread informative?
✅Tell us your thoughts in the comments
✅Like & Retweet the 1st post to spread the knowledge
✅Follow @MrTalkStock and @Stock_Precision for more such deep dives
#investing #education #KRN
✅Tell us your thoughts in the comments
✅Like & Retweet the 1st post to spread the knowledge
✅Follow @MrTalkStock and @Stock_Precision for more such deep dives
#investing #education #KRN
Loading suggestions...