KRN Heat Exchanger And Refrigeration Ltd (KRN) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, please stay connected. The conference call will begin in next few minutes. Thank you. Ladies and gentlemen, you are connected for the KRN Heat Exchanger and Refrigeration earnings conference call. Please stay connected. The call will begin in next few minutes. Thank you.
Moderator: Ladies and gentlemen, good day, and welcome to the KRN Heat Exchanger and Refrigeration earnings conference call, hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on
Moderator: touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Hiral Parikh from Dolat Capital. Thank you, and over to you.
Hiral Parikh (Dolat Capital): Thank you, Yash. Good afternoon, ladies and gentlemen. On behalf of Dolat Capital, I'm pleased to invite all of you to the Q2 FY '27 earnings conference call with the management of KRN Heat Exchanger and Refrigeration Limited. The management is represented by Mr. Santosh Kumar Yadav, the Chairman and MD; Mr. Pawan Naval, the CFO; and Ms. Komal, the Whole Time Director of KRN HVAC Private Limited. With that, I will hand over the call to Komal ma'am for the opening remarks. Over to you, Komal.
Komal (KRN Heat Exchanger And Refrigeration Ltd): Hello, am I audible?
Hiral Parikh (Dolat Capital): Yes ma'am, please go ahead.
Komal (KRN Heat Exchanger And Refrigeration Ltd): Yes, thank you. Good afternoon, everyone. And thank you for joining us. On behalf of the management team, I would like to welcome all our investors, analysts, and partners to KRN's earning call for the second quarter and first half of FY '27. The first half of FY '27 has been a strong period for KRN. Growth during the first half has been broad based, coming from new customers, a wider product range, the ramp-up of our new facility, and a larger share of business from overseas markets. Our core heat exchanger business continues to grow, while the newer businesses are steadily adding to it. A larger part of this has come from our new facility at Neemrana. The initial months after commissioning went into approvals, customer audits, and setting up systems, which is natural for a plant of this size. Over the last few quarters, more customers have been qualified, more products are being manufactured there, and the facility is contributing more meaningfully each quarter. Utilization at the facility still has room to improve, which leaves good scope for future growth from the existing capacity. Exports have been one of the most encouraging parts of the half. Our exports business nearly tripled during the half and now forms a much larger part of our revenue. The United States has become our largest export market, followed by Canada, France, the United Kingdom, and Italy, and we have also served customers in markets such as the UAE, Vietnam, Sri Lanka, Brazil, and Nepal. Customers in North America and Europe are giving us more business, including new customers in the data center space. The growing acceptance of KRN's products in these markets is a good sign of the trust customers place in our quality and execution. Data centers, in particular, have become an important part of our business. Cooling requirements in this segment are rising, and customers are planning and placing orders well in advance. We are also keeping pace with how the technology is moving, including liquid cooling, and have started working on products for this space as well. In bus air conditioning, which we entered last year, progress has been steady. We've started supplies to an OEM, added several bodybuilders as our customers, and are engaging with other OEMs, so we can add them as well. And though as you know, approvals in this segment take some time, having the heat exchanger, tubing, and FRP in house gives us a good base to grow this business. As volumes have grown, we have kept a close watch on costs and working capital. Raw material cost movements are largely passed through to customers, and we have continued to add to our teams across businesses to prepare for the next phase. Some of these investments add to costs in the near term, but we believe they're necessary to support growth of this scale. Now coming to our financial performance. On a consolidated basis, revenue from operations for Q2 FY '27 stood at rupees 319.14 crore, a growth of 109.86%
Komal (KRN Heat Exchanger And Refrigeration Ltd): year on year from 152.07 crores in Q2 FY26. EBITDA grew 61.10% to 48.75 crores, with an EBITDA margin of 15.27%. Net profit doubled to 36.11 crores, up by 100.38% year on year with a net profit margin of 11.32%. For H1 FY27, consolidated revenue from operations was 571.45 crores, up by 113.75% year on year from 267.35 crores in H1 FY26. EBITDA more than doubled, rising 104.40% to 97.81 crores, with an EBITDA margin of 17.12%. Net profit grew 126.68% to 69.01 crores, and net profit margin improved by 69 basis points to 12.08%. Exports were a key contributor during the half. Exports revenue rose 192% year on year to 125.8 crores and now accounts for 22% of total revenue, compared with 16% in H1 FY26. The United States was our largest export market, contributing to 43.7% of exports revenue and our top five markets together accounted for about 85% of exports. To sum up, the first half has seen strong growth, with contributions from across the business. Demand for HVAC and refrigeration solutions remains healthy across data centers, infrastructure, mobility, and industrial cooling. As we move into the second half, our focus will be on deepening customer relationships, building utilization at Neemrana, and developing products for newer applications. Before I close, I would like to thank our employees, customers, and our partners for their continued support, and all of you for your trust in KRN. With that, we would be happy to take your questions.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Mohit Chhug from Shubh Labh Bliss Research. Please go ahead.
Mohit Chhug (Shubh Labh Bliss Research): Hi sir, hope I'm audible.
Moderator: Yes, yes.
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