KRN Heat Exchanger Q1 FY27: Consolidated Revenue Doubles as Exports and Scale Kick In

KRN Heat Exchanger and Refrigeration Limited started FY27 with a sharp step-up in consolidated performance. For Q1 FY27, consolidated revenue from operations rose to INR 252.32 crore from INR 115.28 crore in Q1 FY26, a year-on-year increase of 118.87%. Profitability also improved. Consolidated EBITDA increased to INR 49.06 crore from INR 17.59 crore, and the EBITDA margin expanded to 19.44% from 15.26%. Consolidated PAT rose to INR 32.90 crore from INR 12.42 crore, taking PAT margin to 13.04% versus 10.77%.

The management commentary framed the quarter as a result of sustained demand for HVAC and refrigeration solutions, with growth coming from both domestic and export markets. The company also highlighted that its products reached customers across 14 countries during the quarter, reflecting a broader export footprint.

Exports become a bigger driver in Q1 FY27

The company’s disclosure shows that exports gained share during the quarter. In Q1 FY27, export sales contributed 20.76% of revenue, while domestic sales contributed 79.24%. This is also reflected in the press release, which stated overseas revenue grew 177.31% year-on-year to INR 52.38 crore, taking the export share to 20.76% of segment revenue.

The export mix during the quarter was led by the USA at 32.59% of export revenue, followed by France at 19.81%, UAE at 11.34%, Italy at 10.78%, Canada at 5.64% and others at 19.85%. The multi-year picture also indicates exports have been a consistent, though still smaller, portion of the overall business. In FY26, export sales were 16.57% and domestic sales were 83.43%. FY25 exports were 15.69% and FY24 exports were 14.68%.

Financial summary (Q1 FY27 vs Q1 FY26)

The consolidated margin expansion stands out, but the standalone view shows a different mix. Standalone EBITDA margin reduced to 13.56% from 17.30%, and standalone PAT margin reduced to 10.26% from 13.71%. This gap between consolidated and standalone performance is notable in the disclosed numbers and likely reflects the changing scale of operations at the subsidiary level, though the company does not provide a segment or entity-level revenue bridge in the presentation.

Scale-up and funding actions during and after the quarter

A major corporate action in the quarter was the completion of a Qualified Institutions Placement. The press release disclosed that the QIP opened on 26 May 2026 and closed on 1 June 2026. The company allotted 33,01,886 equity shares at INR 1,060 per share, aggregating INR 350.00 crore. It also stated that net proceeds were INR 341.79 crore and that the funds raised were allocated towards the stated objective, while the unutilised portion was parked in fixed deposits and bonds.

The company also disclosed progress on its prior fundraise. IPO proceeds of INR 311.12 crore were stated to be fully utilised as at 30 June 2026, with INR 235.76 crore invested as equity in KRN HVAC Products Pvt. Ltd. for the Neemrana manufacturing facility and INR 75.36 crore towards general corporate purposes.

Subsequent to the quarter, KRN HVAC Products Pvt. Ltd. received a domestic supply order of INR 50.87 crore for heat exchanger coils on 23 July 2026. While this does not directly translate into immediate quarterly revenue, it provides a disclosed indicator of demand continuity after the quarter end.

On the policy support side, the company disclosed that the Government of Rajasthan sanctioned an incentive of INR 182.95 crore for the Neemrana facility, linking it to the company’s expansion, localisation and backward integration programme.

What the multi-year financials say about the base business

The presentation provides a consolidated multi-year view through FY24 to FY26. Consolidated revenue increased from INR 308.28 crore in FY24 to INR 429.85 crore in FY25 and INR 600.06 crore in FY26. Over the same period, EBITDA rose from INR 58.45 crore in FY24 to INR 70.51 crore in FY25 and INR 112.48 crore in FY26.

Profitability was also positive on a reported basis. Consolidated net profit rose from INR 39.39 crore in FY24 to INR 52.88 crore in FY25 and INR 76.47 crore in FY26. EBITDA margin was 18.96% in FY24, 16.40% in FY25 and 18.74% in FY26. Net profit margin was 12.78% in FY24, 12.30% in FY25 and 12.74% in FY26.

However, the cash flow table highlights a key tension typical of high-growth manufacturing companies. Cash flow from operating activities in FY26 was negative at -INR 113.80 crore, compared with INR 21.44 crore in FY25 and INR 16.92 crore in FY24. This aligns with the balance sheet expansion, where FY26 inventories increased to INR 272.91 crore from INR 95.85 crore in FY25, and trade receivables increased to INR 174.71 crore from INR 92.96 crore. Current borrowings also increased to INR 187.10 crore in FY26 from INR 32.04 crore in FY25.

Business model, product portfolio and market reach

KRN positions itself as an integrated manufacturer of heat exchangers and HVAC and refrigeration solutions. The company’s stated product portfolio includes Fin and Tube coils, Bar and Plate products, refrigerator components, complete HVAC systems, bus air conditioning systems, technical tubes, sheet metal parts and tubings. It also serves multiple end-use areas such as HVAC, refrigeration, data centers, automotive, railways, industrial cooling, process applications, power and marine.

From a geographic perspective, the company listed global presence across countries including the UAE, USA, Italy, Canada, France, Sri Lanka, Vietnam, Nepal, the UK, Hungary, Germany, Ireland, Sweden, Belgium, the Netherlands, Brazil, Croatia, Bolivia and China. For FY26 exports, the largest markets were the UAE at 37.94% of export revenue, followed by the USA at 31.10% and Italy at 13.29%.

The presentation also highlighted multiple quality and compliance certifications including AHRI and a UL Certificate of Compliance, along with awards from customers such as Carrier and Daikin. These disclosures help explain how the company competes in regulated or quality-sensitive applications, though the materials do not quantify customer concentration or provide a customer-wise revenue split.

Takeaways from Q1 FY27

Q1 FY27 shows a sharp rise in consolidated scale and profitability, supported by export growth and expanding market reach. At the same time, standalone margin compression and the FY26 negative operating cash flow highlight that the growth phase is still working through working-capital and cost dynamics.

Management has reiterated a focus on building scale and strengthening manufacturing capabilities, with investments directed toward capacity, localisation and backward integration. With the QIP completed, IPO proceeds fully utilised, and a disclosed incentive for the Neemrana facility, the near-term story is as much about execution discipline as it is about demand. The next few quarters should help clarify how sustainably the company can convert rapid revenue growth into steady cash generation.