KRN Heat Exchanger and Refrigeration Limited (KRN) has announced a significant business expansion through the acquisition of the bus air-conditioning division from Sphere Refrigeration Systems Private Limited (SRSPL). This strategic move marks KRN's entry into the bus air-conditioning segment, potentially broadening its market presence and diversifying its product portfolio.

Acquisition Details

The acquisition is being executed through KRN HVAC Products Private Limited, a wholly-owned subsidiary of KRN Heat Exchanger and Refrigeration Limited. The company's board of directors approved the signing of a Business Transfer Agreement (BTA) with SRSPL on October 6, 2025. Under this agreement, the entire bus air-conditioning division business currently operated by SRSPL will be transferred to KRN HVAC.

Key Aspects of the Deal

Strategic Implications

KRN Heat Exchanger expects this acquisition to enhance both its revenues and profitability. The move aligns with the company's growth strategy, potentially allowing it to:

1. Expand its product offerings in the HVAC sector
2. Tap into the growing market for bus air-conditioning systems
3. Leverage existing expertise in heat exchanger technology for new applications

Management's Perspective

Santosh Kumar Yadav, Managing Director of KRN Heat Exchanger and Refrigeration Limited, signed off on the regulatory filing, indicating the management's confidence in this strategic move. The company views this acquisition as an opportunity to strengthen its position in the HVAC market and create additional value for its shareholders.

Market Impact

While the financial details of the deal have not been disclosed, the acquisition is expected to have a positive impact on KRN Heat Exchanger's market position. Investors and industry observers will likely keep a close watch on how this expansion into the bus air-conditioning segment affects the company's financial performance in the coming quarters.

As KRN Heat Exchanger integrates this new division into its operations, it will be interesting to see how the company leverages this acquisition to drive growth and innovation in the bus air-conditioning market.

KRN Heat Exchanger and Refrigeration Limited has reported robust financial results for the first quarter of fiscal year 2026, showcasing significant growth and operational advancements. The company's performance reflects its strong market position and strategic initiatives in the heat exchanger and HVAC industry.

Financial Highlights

KRN Heat Exchanger delivered impressive consolidated results for Q1 FY26:

On a standalone basis, the company's performance was equally noteworthy:

Segment Performance

The company's growth was driven by strong performance across both domestic and international markets:

Export contribution stood at 16.4% of total sales.

KRN Heat Exchanger reported significant traction in international markets, particularly in the UAE and Italy. The company's expanding global footprint, which includes presence in Germany, Canada, and France, continues to be a key growth driver.

New Manufacturing Facility

A major highlight of the quarter was the successful commencement of commercial operations at the company's new Neemrana Manufacturing Facility. This state-of-the-art facility, operated by KRN's wholly-owned subsidiary KRN HVAC Products Private Limited, began operations on May 31, 2025. The new plant enhances the company's capacity to serve both domestic and global markets with high-quality heat exchangers and HVAC products.

PLI Scheme Approval

In a significant development, KRN's subsidiary secured approval under the Production Linked Incentive (PLI) scheme for white goods. The company has been sanctioned an incentive of INR 141.72 crores by IFCI Ltd. This incentive is expected to accelerate expansion, deepen backward integration, and enhance localization, all of which are integral to KRN's strategy of building a cost-efficient and self-reliant manufacturing ecosystem.

Future Outlook

Looking ahead, KRN Heat Exchanger remains focused on expanding its market share, strengthening its global presence, and executing its strategic roadmap. The company is aligned with structural tailwinds supporting the HVAC and refrigeration industry, including rising infrastructure development, sustainability focus, and increasing adoption of energy-efficient systems.

Management expects the new Neemrana facility to operate at 20-25% capacity utilization in the current year, with production ramping up from Q3 FY26. The company has set an ambitious target of achieving a 50% export share within three years.

Investor Conference Call Highlights

During the recent investor conference call, management provided additional insights:

• The company is in the process of setting up the Thermotech Research Laboratory, which will be the first lab in India approved by AHRI (Air-Conditioning, Heating, and Refrigeration Institute).
• KRN is exploring opportunities in new product segments, including refrigerator components and bar and plate heat exchangers, which are expected to offer higher margins.
• The company sees significant potential in the data center cooling market, with recent announcements of major investments in this sector.
• KRN is well-positioned to benefit from the trend towards district cooling systems and centralized air conditioning in high-end residential projects.

With its growing portfolio, strong order book, and capable team, KRN Heat Exchanger and Refrigeration Limited is confident in sustaining its positive trajectory in the upcoming quarters, capitalizing on both domestic and international opportunities in the HVAC and heat exchanger markets.