This stock has zoomed 226% against issue price; rallied 60% in 8 days

KRN Heat Exchanger share price hit a new high of Rs 716.90, and was 10 per cent on the BSE in Monday's intra-day trade in an otherwise weak market.

KRN Heat Exchanger (KRN) shares hit a new high of Rs 716.90, as they rallied 10 per cent on the BSE in Monday’s intra-day trade in an otherwise weak market. In the past eight days, the stock has surged 60 per cent after the company reported healthy earnings for the September quarter (Q2FY25) with net profit growth of 43 per cent at Rs 12.31 crore.  In comparison, the BSE Sensex was down 0.27 per cent at 77,368 at 12:12 pm.

 

The company’s revenue rose 27.96 per cent year-on-year (YoY) at Rs 91.1 crore against Rs 71.19 crore in a year ago quarter. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased 36.4 per cent YoY at Rs 195.53 crore; margin improved 124 bps YoY at 21.17 per cent.

 

 

The stock was trading at its highest level since its listing on the exchange on October 3, 2024. With the eight-day rally, KRN's market price has zoomed 226 per cent against its issue price of Rs 220 per share.

 

On the stock price movement, KRN clarified that the movement in the company’s share price is purely market driven and owing to the market conditions on which the company, neither has any control nor has any knowledge of reasons.

 

KRN 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).

 

Meanwhile, KRN served 113 customers with a mix of increasing exports moving from 10 per cent to 15 per cent over FY22- 24 expanding customer network across Europe and diversifying customer base and increasing market share. This enables us to capture a greater share of the value chain and establish direct connections with end customers enhancing customer reach and brand visibility. Rapid industrialization, urbanization, and infrastructure development have driven strong demand for heat exchangers in India driven by real estate construction, manufacturing, warehousing, and transportation sectors, according analysts.

 

KRN has established itself as one of the top players in fin and tube-type heat exchangers for the HVAC&R industry using non-ferrous metals like copper and aluminum. Being an 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, analyst at Reliance Securities had said in the IPO note.