KRN Heat Exchanger Gets Dolat Capital's 'Buy' Initiation On Inexpensive Valuation, Supernormal Growth Outlook

Dolat Capital initiates coverage on KRN Heat Exchanger and Refrigeration with a ‘Buy’ rating and a DCF-based target price of Rs 1,111.

KRN is expected to receive RIPS approval in the next three months and the HVAC facility is eligible for the 1.56% revenue-based incentive over the next 10 years.

(Photo Source: Company website)

KRN Heat Exchanger achieved an impressive 71% EPS CAGR over FY20-FY25, driven by consistent double-digit growth in evaporators and condenser coil sales, a doubling of high-value export revenue share to 16% in FY25, and Ebitda margin expansion of over 10%.

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Dolat Capital Report

We initiate coverage on KRN Heat Exchanger and Refrigeration Ltd. with a ‘Buy’ rating and a DCF-based target price of Rs 1,111. KRN is a leading manufacturer in the HVAC&R industry, specializing in the design and production of fin and tube-type heat exchangers.

The company achieved an impressive 71% EPS CAGR over FY20-FY25, driven by consistent double-digit growth in evaporators and condenser coil sales, a doubling of high-value export revenue share to 16% in FY25, and Ebitda margin expansion of over 10%.

KRN is well positioned to benefit from -

  1. six times capacity expansion plans,

  2. rising demand for Commercial AC and Data Centre;

  3. PLI and RIPS schemes boosting Ebitda margins by 290 bps; and

  4. concessional tax rate of 17% on new capacity.

We expect EPS CAGR of 72% over the next three years. The stock is currently trading at 72x/36x of FY26E/FY27E EPS.

Click on the attachment to read the full report:

Dolat Capital KRN Heat Exchanger and Refrigeration (Initiating Coverage)_09-July-2025.pdf
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Also Read: Delhivery Gets 'Buy' As Motilal Oswal Initiates Coverage

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