KRN Heat Exchanger begins operations at new Neemrana plant to expand HVAC production

KRN Heat Exchanger and Refrigeration Limited has taken a decisive step to scale its operations and consolidate its role in India‘s HVAC sector by commencing full-fledged operations at its new Neemrana plant on May 31, 2025. The commercial production at this facility, operated through its wholly owned subsidiary KRN HVAC Products Pvt. Ltd., signals a major milestone in the company’s manufacturing-led growth roadmap.

Located in Kolila Joga within the RIICO Industrial Area of Alwar, Rajasthan, the new manufacturing facility is strategically positioned near key northern industrial corridors. It is designed to produce heat exchangers and HVAC systems that serve OEMs in infrastructure, commercial real estate, and industrial verticals. The move comes at a time when India’s HVAC sector is witnessing robust expansion, supported by government-backed infrastructure investments, increasing real estate activity, and rising global temperatures demanding energy-efficient cooling solutions.

What Does the Neemrana Facility Add to KRN’s Manufacturing Capabilities?

The newly inaugurated plant complements KRN’s existing 1,50,000 sq. ft. facility and enhances its total capacity, which currently stands at over 1 million HVAC coil units annually. According to company sources, the Neemrana plant is expected to significantly improve operational efficiency, enable faster fulfillment cycles, and serve both domestic and export demand more effectively.

This facility will also enable the company to deepen its footprint in international markets, with export share already comprising 16% of total production volumes in FY25. Products manufactured here include aluminum and copper fin-and-tube coils used in water coils, condenser units, and evaporator modules. These components are crucial for high-efficiency heating and cooling systems demanded across data centers, industrial parks, high-rise offices, and retail complexes.

Santosh Kumar, Chairman and Managing Director of KRN Heat Exchanger, said the Neemrana plant “will serve as a key hub for both domestic distribution and export-oriented production.” Without making forward projections, the company underscored that the plant’s strategic location and design would enable quicker delivery to industrial buyers and enhance its responsiveness to custom coil orders.

How Did KRN Perform Financially in FY25?

The commissioning of the Neemrana plant closely follows a strong financial year for the company. In FY25, KRN Heat Exchanger and Refrigeration Limited posted consolidated total revenue of ₹441.71 crore, EBITDA of ₹70.51 crore, and net profit of ₹52.88 crore. This translates to a net margin of 11.97% and an EBITDA margin of approximately 15.96%, both robust figures in the capital-intensive HVAC segment.

The company’s strong margin performance is attributed to its in-house design capabilities, process engineering efficiencies, and a tight grip on procurement cycles—especially critical when working with volatile raw materials like copper and aluminum.

These results indicate not only resilience amid macroeconomic uncertainties but also a disciplined focus on profitable growth. The new facility is expected to offer operating leverage over time, further improving profitability through economies of scale.

How Is the Market Reacting to KRN’s Growth Moves?

The market has taken note. On May 30, 2025, the last trading day before the plant commissioning announcement, KRN’s stock on the National Stock Exchange (NSE) closed at ₹767.00, marking a 1.41% gain from the previous day’s close of ₹756.35. The session saw a healthy traded volume of 5.13 lakh shares and a turnover of ₹39.56 crore, reflecting renewed investor interest.

KRN stock has shown significant volatility in the past 12 months. It reached a 52-week high of ₹1,012.00 on February 6, 2025, and touched a low of ₹402.10 on October 7, 2024. The current price recovery is driven by investor optimism about operational growth and delivery consistency.

Despite high investor interest, the stock trades at an eye-popping adjusted price-to-earnings (P/E) ratio of 320.11. This elevated valuation, though unsustainable for traditional manufacturing firms, is increasingly seen in niche industrial players with defensible IP, rapid capacity expansions, and strong export tailwinds.

The free float market cap is estimated at ₹1,192.15 crore, with a total market capitalization nearing ₹4,767 crore as of May 30. The delivery percentage stood at 33.38%, suggesting a healthy mix of long-horizon institutional holdings and speculative interest. There are no known major FII/DII sell triggers yet, though trading activity in the coming weeks will reveal institutional sentiment post-plant commissioning.

What’s the Broader Industry Trend Behind KRN’s Move?

India’s HVAC&R (heating, ventilation, air conditioning, and refrigeration) industry is currently undergoing a generational shift. With infrastructure development, digitization of facilities, and ESG-driven building codes, OEMs and integrators are increasingly turning to customized, high-efficiency heat exchanger solutions. India is also positioning itself as an export manufacturing hub for HVAC components, aided by PLI (Production Linked Incentive) schemes and supply chain diversification away from China.

KRN Heat Exchanger’s decision to ramp up production capacity aligns with this broader wave of industrial localization and ‘China +1′ sourcing shifts. The company’s focus on custom engineering, backward integration, and export-readiness makes it well-placed to capture a larger share of HVAC component contracts—both within India and abroad.

Historically, Indian HVAC manufacturers have operated on tight margins due to fragmented customer bases and high working capital cycles. However, firms like KRN that adopt high-mix, low-volume configurations while maintaining lean balance sheets are better insulated from pricing pressures and input shocks.

What Are Analysts Watching for in FY26?

As KRN enters the new fiscal year, analysts and investors are watching for early indicators from the Neemrana plant—particularly how quickly it ramps up to optimal utilization and how it contributes to the top line in Q1 and Q2 FY26. Clarity on whether the new capacity translates into higher export share will be critical in justifying the firm’s premium valuation multiples.

Another key trigger could be government-linked HVAC orders from industrial clusters, defense estates, or public health infrastructure—verticals that demand high-compliance cooling systems. KRN’s technical capabilities and production agility make it a candidate for such contracts.

Analysts also expect potential corporate developments around backward integration or R&D investments. Given the elevated valuation, investor scrutiny on capital allocation and margin sustainability will remain high throughout FY26.

Can KRN Sustain Its Momentum?

KRN Heat Exchanger and Refrigeration Limited appears to be executing a well-timed and strategically calibrated growth plan. The Neemrana plant’s inauguration reinforces the company’s ambition to emerge as a reliable, design-led manufacturer in the HVAC domain. With a strong FY25 performance, rising investor interest, and a favorable macro environment, the company is well-poised for the next stage of growth.

However, its sky-high P/E and volatile stock behavior demand caution. The coming quarters will be crucial in proving whether operational scale translates to sustainable earnings growth.