Revenue and Profit Growth
In the fiscal year ending March 2025, KRN Heat Exchan reported consolidated net sales of ₹429.85 crores, a substantial rise from ₹308.28 crores recorded in the previous year. This growth of nearly 40% underscores the company’s expanding market presence and operational scale. Total operating income mirrored this increase, reflecting the absence of other operating income in both years.
Operating profit before depreciation, interest, and tax (PBDIT) excluding other income rose to ₹70.51 crores from ₹58.45 crores, indicating improved core operational efficiency. When factoring in other income, operating profit surged to ₹82.37 crores, up from ₹63.91 crores, highlighting the company’s ability to generate additional income streams.
Profit before tax climbed to ₹74.32 crores, a 33% increase over the prior year’s ₹55.93 crores. After accounting for tax expenses, the consolidated net profit stood at ₹52.88 crores, up from ₹39.39 crores. However, earnings per share (EPS) remained relatively stable at ₹8.51 compared to ₹8.54, reflecting the impact of increased equity capital during the period.
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Cost Structure and Margins
The company’s raw material costs rose in line with revenue growth, reaching ₹319.15 crores from ₹226.83 crores. Employee costs and other expenses also increased, reflecting expanded operations and inflationary pressures. Total expenditure excluding depreciation increased to ₹359.34 crores from ₹249.83 crores.
Despite higher absolute profits, operating profit margin excluding other income declined to 16.4% from 18.96%, and gross profit margin slipped to 18.37% from 19.44%. The profit after tax margin also saw a slight dip to 12.3% from 12.78%, indicating some margin compression amid rising costs.
Balance Sheet Strength and Asset Growth
KRN Heat Exchan’s balance sheet reflects significant strengthening. Shareholder’s funds surged to ₹498.63 crores from ₹130.28 crores, driven by a sharp increase in reserves to ₹436.48 crores. Equity capital also rose to ₹62.16 crores from ₹46.14 crores, supporting the company’s expansion plans.
Total assets more than doubled to ₹594.81 crores from ₹257.42 crores, with notable increases in net block and capital work in progress, signalling ongoing investments in fixed assets. Current assets expanded substantially to ₹425.54 crores from ₹169.78 crores, supported by higher inventories, sundry debtors, and cash balances.
On the liabilities side, total debt was reduced to ₹33.47 crores from ₹59.69 crores, reflecting improved leverage and financial prudence. Short-term borrowings decreased significantly, while long-term borrowings also declined, enhancing the company’s financial stability.
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Cash Flow and Financial Position
Cash flow from operating activities improved to ₹21 crores from ₹16 crores, reflecting stronger earnings and working capital management. However, cash flow from investing activities showed a significant outflow of ₹279 crores compared to ₹64 crores the previous year, indicating substantial capital expenditure and asset acquisition.
Financing activities generated ₹257 crores, a marked increase from ₹50 crores, likely related to equity infusion and debt restructuring. Despite these movements, the net cash inflow/outflow remained neutral, with closing cash and cash equivalents steady at ₹10 crores.
Book value per share adjusted for equity changes rose sharply to ₹80.22 from ₹28.24, underscoring enhanced net worth and shareholder value creation over the year.
Conclusion
KRN Heat Exchan’s historical performance over the last fiscal year reveals a company in expansion mode, with strong revenue and profit growth complemented by a fortified balance sheet. While margins have slightly contracted due to rising costs, the overall financial health remains robust, supported by prudent debt reduction and significant asset investments. Investors analysing this company can note its improved earnings capacity and enhanced book value, balanced against ongoing capital expenditure and margin pressures.
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