KRN Heat Exchanger FY26 income jumps 57% to ₹690 Cr

Earnings call audio released: what investors heard

KRN Heat Exchanger and Refrigeration Ltd (BSE: 544263 | NSE: KRN) released the audio recording of its Q4 FY26 earnings conference call held on May 15, 2026. The call discussed audited financial results for the quarter and full year ended March 31, 2026, along with operational updates. Management said FY26 reflected the groundwork of the last few years showing up in financial performance and execution consistency. The company also highlighted early contribution from its new HVAC manufacturing facility, which is still in a ramp-up phase. Investors were given updates on exports, new segments, raw material volatility, and working capital movements.

FY26 performance: strong growth, mixed margin picture

For FY26, KRN reported strong year-on-year growth in both standalone and consolidated numbers, led by higher income and an improving mix of end-markets. Standalone total income rose 57.36% year-on-year to ₹689.95 crore, while EBITDA increased 19.41% to ₹84.79 crore. Standalone net profit rose 42.11% to ₹71.31 crore, and diluted EPS was ₹11.47 (up 24.00%). On a consolidated basis, total income was ₹609.81 crore (up 38.06%), EBITDA was ₹112.48 crore (up 59.52%), and net profit was ₹76.47 crore (up 44.62%).

Margins, however, moved differently across reporting bases. Standalone EBITDA margin for 12M FY26 was 12.54%, down 393 bps year-on-year, and standalone net profit margin was 10.33%, down 111 bps. Consolidated EBITDA margin improved to 18.74% (up 234 bps), while consolidated net profit margin improved to 12.54% (up 57 bps). The divergence suggests profitability benefited at the consolidated level even as standalone margins saw pressure.

Q4 FY26: income growth continues, standalone EBITDA declines

In Q4 FY26, standalone total income rose 55.06% year-on-year to ₹204.93 crore, while standalone net profit increased 22.69% to ₹16.87 crore. Standalone EBITDA for the quarter was ₹17.99 crore, a year-on-year decline of 11.13%, with EBITDA margin at 8.91% (down 657 bps). On the consolidated side, Q4 total income was ₹181.40 crore, up 33.55% year-on-year. Consolidated EBITDA rose 77.56% to ₹33.55 crore, and net profit increased 57.14% to ₹23.36 crore.

Management also said Q4 was encouraging with standalone revenue crossing ₹200 crore for the first time. A separate dataset in the provided material also reported Q4 consolidated revenue of ₹181.395 crore, net income of ₹23.362 crore, and diluted EPS of ₹3.75, aligning closely with the company’s consolidated highlights.

Key numbers at a glance

New HVAC facility: contribution begins, ramp-up slower than expected

The company said its new HVAC manufacturing facility commissioned during FY26 has started contributing, and customer response has been encouraging. At the same time, the ramp-up has been slower than expected. The material indicates KRN expects around 50% capacity utilisation this year, which it also frames as a key operational milestone. Management said that as the plant ramps up further, operating leverage is expected to become clearer. Separate information in the provided text also noted that the Neemrana facility has been fully commissioned and is contributing to capacity.

Segment expansion: bus AC entry and data center exposure

KRN said it entered the bus air-conditioning segment during the year as a strategic move beyond component supply into system-level opportunity. Management stated it expects to achieve at least a 15% market share in the bus AC segment in the current financial year. Data centers were highlighted as a demand driver, with management pointing to good order bookings and a growing revenue contribution. One management remark in the material said that in Q4, around 18.7% came from data centers.

The company also described its presence spanning HVAC, data centers, industrial cooling, transport applications, and refrigeration. It positioned this as a move toward a more integrated offering and a more balanced business profile.

Exports: diversified footprint, but geopolitics flagged as a risk

For FY26, exports were reported at about ₹99 crore across 18 countries. The export mix was led by UAE (37.9%), USA (31.1%) and Italy (13.3%), according to the operational highlights provided. Management said exports to markets like the UAE and the US continue to do well, with initial traction coming from Europe. However, the text also flags concerns that geopolitical tensions can disrupt exports, particularly to the UAE, affecting dispatches.

The material also referenced an export order of ₹55 crore for heat exchanger coils secured in April 2026. In the conference call remarks captured in the text, management said it achieved around ₹100 crore from exports last year and is planning almost double this year, and mentioned an opening export order book of about ₹120 crore across geographies including Europe, UAE and North America.

Working capital and raw materials: inventory build and metal volatility

Among the key negatives highlighted in the provided material was a high level of inventory. This was attributed to geopolitical uncertainties and the need to stock up for new product lines. Raw material price volatility, especially in copper and aluminium, was also identified as a challenge. The text notes the company’s ability to pass on cost increases to customers with a quarter lag, which can still create near-term margin timing pressures.

These factors are relevant because they can affect both reported margins and cash conversion, even when income and profit growth remain strong.

Balance sheet, leadership change, and fundraising overhang

KRN reported that total assets increased to about ₹932 crore (up 57% year-on-year), while property, plant and equipment (PP&E) rose to about ₹314 crore (up about 268% year-on-year), reflecting the commissioning of the new facility. The company also appointed a new CFO, Mr. Pawan Nawal, with effect from May 15, 2026.

On capital raising, the provided text notes the company is considering raising funds through equity, which can dilute shareholders. It also states that a ₹500 crore QIP was approved by shareholders in April 2026. At the same time, the text suggests the company has the potential to manage growth through internal resources, making funding choices an area investors may track.

Market snapshot in the provided material

The content provided also included market-reference points: last close price of ₹1,172.60 and an average target price of ₹1,069.50, implying a spread of -8.79%. It also showed a -0.93% move (context not specified beyond the figure). These figures were presented alongside the earnings-related information in the source material.

Why this update matters for KRN shareholders

The FY26 results show KRN scaling up, with strong year-on-year income growth and rising profits on both standalone and consolidated bases. The ramp-up of the new HVAC facility, capacity utilisation trajectory, and the pace of segment additions like bus AC are central to the operating narrative shared by management. Exports are a meaningful lever, with a reported ₹99 crore in FY26 and a concentration in UAE and the US, while management also pointed to early signs of Europe traction.

At the same time, investors are being asked to weigh near-term operational frictions: slower-than-expected capacity ramp-up, inventory build, metal price volatility, and export dispatch sensitivity to geopolitical conditions. The presence of a shareholder-approved QIP and management’s stated consideration of equity fundraising adds another layer to the near-term watchlist.

Conclusion

KRN Heat Exchanger’s FY26 print combined high growth in income and net profit with a clear expansion agenda across HVAC, data centers, exports and transport applications. The May 15, 2026 earnings call audio gives investors a direct view of management’s priorities, including capacity utilisation targets and export plans. Near-term focus areas flagged in the provided material include inventory levels, raw material volatility, and geopolitical risk in key export markets. Investors will likely track progress on facility utilisation, export execution across geographies, and any next steps on fundraising.