This article first appeared on GuruFocus .
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Total Income (9M FY26, Stand-alone):INR 485 crores, up 58% year on year.
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EBITDA (9M FY26, Stand-alone):INR 67 crores, growth of 32% year on year.
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Net Profit (9M FY26, Stand-alone):INR 54 crores, increased by 49% year on year.
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Total Income (9M FY26, Consolidated):INR 428 crores, growth of 40% year on year.
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EBITDA (9M FY26, Consolidated):INR 79 crores, up 53% year on year.
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Net Profit (9M FY26, Consolidated):INR 53 crores, increased by 40% year on year.
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Total Income (Q3 FY26, Consolidated):INR 155 crores, up 33% year on year.
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EBITDA (Q3 FY26, Consolidated):INR 31 crores, nearly doubled year on year.
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Net Profit (Q3 FY26, Consolidated):INR 23 crores, grew by 65% year on year.
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Release Date: February 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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KRN Heat Exchanger and Refrigeration Ltd ( NSE:KRN ) reported a significant year-on-year growth in total income by 58% for the first nine months of FY26, reaching approximately INR485 crores.
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The company's EBITDA for the nine-month period increased by 32% to around INR67 crores, while net profit rose by nearly 49% to about INR54 crores.
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KRN Heat Exchanger and Refrigeration Ltd ( NSE:KRN ) has successfully expanded its product portfolio and strengthened its presence across multiple segments within HVAC and refrigeration.
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The company has added over 40 new customers in the last quarter, indicating strong market demand and customer acquisition.
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KRN Heat Exchanger and Refrigeration Ltd ( NSE:KRN ) is experiencing strong demand in both domestic and major export markets, including the UAE, the United States, Canada, and Europe.
Negative Points
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The new plant's production ramp-up has been slower than expected, with full integration only set to occur by March 11, potentially delaying anticipated revenue growth.
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Volatility in aluminum and copper prices poses a risk to gross margins, although the company maintains a two-and-a-half-month inventory to mitigate immediate impacts.
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The standalone EBITDA margin contracted by 22.7%, indicating potential inefficiencies or cost pressures at the individual business unit level.
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The company faces challenges in converting existing suppliers to KRN for its new bus air conditioning business, which involves a learning curve and market penetration efforts.
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There is a risk associated with raw material price fluctuations, as the company operates on a quarterly average pricing model, which may not fully protect against sudden price spikes.
Q & A Highlights
Q: With the new plant coming into production, how does Q4 and FY27 look in terms of ramping up production? A: Santosh Yadav, Managing Director, stated that the new facility is in the ramping stage and will be fully integrated by March 11. They have added over 40 new customers and expect good numbers from bus air conditioning, indicating a positive outlook for Q4 and FY27.
Q: How is the volatility in aluminum and copper prices affecting your order book and margins? A: Santosh Yadav explained that they maintain a two-and-a-half-month inventory, which helps mitigate immediate impacts. Price adjustments occur quarterly, with the next change scheduled for April 1, 2026, allowing them to manage margins effectively.
Q: Can you provide insights on the bus air conditioning segment and its market penetration? A: Santosh Yadav noted that they have started supplying to one OEM and expect to cover 15% of the Indian market next year. The segment is growing, and they are leveraging their expertise in heat exchangers and other components to gain market share.
Q: What is the impact of rising commodity prices on working capital and inventory levels? A: Santosh Yadav mentioned that while metal prices are rising, they have credit arrangements with suppliers and maintain a strategic inventory level. They expect inventory levels to stabilize once domestic sourcing begins.
Q: How competitive are you in terms of pricing in international markets like Europe and the USA? A: Santosh Yadav stated that they are 15-20% more competitive than European and US suppliers. They have added new geometries for these markets and expect increased orders following recent trade agreements.
Q: What is the expected revenue contribution from the new bus air conditioning acquisition? A: Santosh Yadav indicated that while the acquisition cost is undisclosed, they aim to achieve 15% of the market share next year, with margins better than existing products due to backward integration.
Q: Can you elaborate on the data center business and its future potential? A: Santosh Yadav highlighted that data centers contributed 15% of their top line in Q3. They expect this to grow significantly, with plans to capture 50% of the Indian market's heat exchanger orders in the coming years.
Q: How are you strengthening the role of independent directors as the company scales? A: Santosh Yadav acknowledged the importance of governance and mentioned plans to add more industry experts and professionals to the board to support strategic growth.
Q: What is the status of your order book and how do you manage raw material risks? A: Santosh Yadav explained that their order book is rolling, with firm orders for one month and forecasts for six months. They manage raw material risks by maintaining inventory and adjusting prices quarterly.
Q: What are your plans for expanding service centers for the bus air conditioning business? A: Santosh Yadav stated that they plan to open 20-25 service centers across India in the next six to seven months to support the bus air conditioning business, ensuring immediate service availability for customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
