KRN Heat Exchanger surges 20%; stock zooms 103% against issue price

KRN Heat Exchanger share price was locked in the upper circuit of 20% at Rs 537 on the BSE today

KRN Heat Exchanger (KRN) share price was locked in the 20-per cent upper circuit, at Rs 537, on the BSE in Wednesday's intraday trade amid heavy volumes. The stock was trading at its highest level since the company's listing on the exchange on October 3, 2024. With today's rally, KRN's market price more than doubled, zooming 103 per cent against its issue price of Rs 220 per share.

 

Till 03:03 PM, a combined 4.3 million shares had changed hands and there were pending buy orders for 210,000 shares on the NSE and BSE. In comparison, the BSE Sensex was up 1.1 per cent at 80,384.

 

 

KRN Heat Exchanger specialises in manufacturing fin and tube-type heat exchangers for the heating, ventilating, air conditioning and refrigerating (HVAC&R) industry. Using non-ferrous metals like copper and aluminum, KRN produces condenser coils, evaporator units, evaporator coils, header/copper parts, fluid and steam coils, and sheet metal parts.

 

The company offers heat exchangers in various shapes and sizes, with tube diameters ranging from 5 millimetre (mm) to 15.88 mm, tailored to meet client requirements and industry standards. KRN has partnered with leading industry players like Daikin, Schneider Electric, and Blue Star, while strategically expanding its global reach and enhancing operational efficiency.

 

The demand for finned tube heat exchangers in India is expected to rise significantly due to the expanding HVAC market. This growth is driven by real estate construction, manufacturing, warehousing, and transportation sectors. The Indian HVAC market, valued at $7.8 billion in 2021, is projected to reach nearly $27.4 billion by 2030.

 

Consequently, the increased production of HVAC equipment will boost the demand for heat exchangers. The annual turnover for finned tube heat exchangers is anticipated to grow from $133 million in 2022 to nearly $277 million by 2029, almost doubling in size, KRN had said in its investor presentation for the September quarter of current financial year (Q2 FY25).

 

The company had reported a healthy 42.98 per cent year-on-year (Y-o-Y) jump in its consolidated profit after tax at Rs 123.20 crore for the quarter. Earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 36.4 per cent to Rs 195.5 crore, while margins improved 124 bps at 21.17 per cent. Total income grew 28.4 per cent Y-o-Y at Rs 925.4 crore.

 

KRN's financials have seen an increase in revenue from Rs 156 crore in FY22 to Rs 308 crore in FY24 which grew by a compounded annual growth rate (CAGR) of 25 per cent with strong order book, repeat orders from large customer groups as it enjoys strong relationships. Ebitda and PAT margins have also moved higher as the revenues expanded, improvement in manufacturing processes, with improving new products enhancements capabilities and infrastructure to meet the strong demands of the heat exchanger industry.

 

"Being a first generation entrepreneur with over 19 years of experience in manufacturing heat exchangers and refrigeration units has moved KRN from a single product to multi product company with long-standing business relationships with leading clientele and multi fold expansion in revenues in the coming years offers strong growth going ahead with consistent profitability," analysts at Reliance Securities had said in their IPO note.