 "This Mukul Agrawal portfolio stock surges 23% in 3 days; hits new high")
KRN Heat Exchanger (KRN) shares hit a new high of Rs 899.50, as they rallied nearly 9 per cent on the BSE in Tuesday’s intra-day trade in an otherwise weak market. The stock has surpassed its previous high of Rs 876, touched on December 6, 2024. In comparison, the BSE Sensex was down nearly 1 per cent at 11:22 AM.
In three days, the stock surged 23 per cent after KRN’s recent shareholding pattern revealed that investor Mukul Agrawal bought a 1.6 per cent stake in the company during the October to December quarter.
The stock was trading at its highest level since its listing on the exchanges on October 3, 2024. Due to the rally in the company's stocks in the past three days, KRN's market price has zoomed 309 per cent against its issue price of Rs 220 per share.
According to the December quarter shareholding pattern disclosed by KRN on January 17, 2024, Mukul Mahavir Agrawal has purchased 1 million equity shares, representing 1.61 per cent holding in the company, during the quarter. Mukul Agrawal held nil holding at the end of September quarter, the shareholding data showed.
KRN specialises in manufacturing fin and tube-type heat exchangers for the heating, ventilating, air conditioning and refrigerating (HVAC&R) industry. Using non-ferrous metals like copper and aluminum, KRN produces condenser coils, evaporator units, evaporator coils, header/copper parts, fluid and steam coils, and sheet metal parts. KRN partners with leading industry players like Daikin, Schneider Electric, and Blue Star, while strategically expanding its global reach and enhancing operational efficiency.
Meanwhile, for the September quarter (Q2FY25), KRN had reported healthy earnings with net profit growth of 43 per cent year-on-year (YoY) at Rs 12.31 crore. The company’s revenue rose 27.96 per cent YoY, at Rs 91.1 crore against Rs 71.19 crore in the year-ago quarter. The company's earnings before interest, tax, depreciation and amortisation (Ebitda) increased 36.4 per cent YoY to Rs 195.53 crore; and margin improved 124 bps YoY to 21.17 per cent.
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Rapid industrialisation, urbanisation, and infrastructure development have driven a strong demand for heat exchangers in India driven by real estate construction, manufacturing, warehousing, and transportation sectors, according analysts.
The demand for finned tube heat exchangers in India is expected to rise significantly due to the expanding HVAC market. This growth is driven by real estate construction, manufacturing, warehousing, and transportation sectors. The Indian HVAC market, valued at $7.8 billion in 2021, is projected to reach nearly $27.4 billion by 2030.
Consequently, the increased production of HVAC equipment will boost the demand for heat exchangers. The annual turnover for finned tube heat exchangers is anticipated to grow from $133 million in 2022 to nearly $277 million by 2029, almost doubling in size, KRN had said in its investor presentation for the September quarter of current financial year (Q2 FY25).
The company’s robust financial foundation is complemented by a remarkable customer retention strategy, which includes long-standing relationships with key clients such as Daikin Air-conditioning India Pvt. Ltd. KRN’s proactive strategies to expand its customer base and product offerings position it well to capitalise on the growing global demand for heat exchangers, analyst at KRChoksey Shares and Securities had said in the company's IPO note.
The company plans to penetrate new markets, particularly in North America and Europe, while enhancing its existing product line through continuous innovation and customisation. By establishing KRN HVAC Products Pvt. Ltd. for new manufacturing capabilities, KRN aims to diversify its portfolio and reduce reliance on major customers, thereby mitigating risks, the brokerage firm had said.
Meanwhile, the board of directors of the company is schedule to meet on Monday, January 27, 2025, to consider its December quarter (Q3 FY25) results.