“When you love blindly, even flaws seem like virtues.” → When you deeply like or love someone, you may ignore their weaknesses. Their mistakes or shortcomings may even appear charming, acceptable, or even “good” to you. For example, if someone is stubborn, you might call it “determined” because you love them.
“When your dislike is intense, even virtues seem like flaws.” → On the other hand, if you dislike someone, even their positive qualities can appear negative. For instance, if someone is confident, you might see them as arrogant—simply because your attitude toward them is negative.
“Mend Your Attitude” → The key message is that it’s not always the person who is truly good or bad—it’s often our own perspective that is biased. By adjusting your attitude (removing the “blinding” effects of love or dislike), you can see people more clearly and fairly.
Posted: 01 Oct 2025
KRN Heat Exchanger And Refrigeration Limited. Key Rating Drivers - Strengths Extensive industry experience of the promoters & established clientele: The promoters have experience of over two decades in heat exchangers and the refrigeration industry. This has given them a deep understanding of the dynamics of the market and enabled them to establish relationships with suppliers and customers. This has led to a healthy scale of operations with continuous increase in the scale of operations with revenue of Rs 432 crore in fiscal 2025 as compared to Rs 158 crore in fiscal 2022. The growth is driven by the companys strong relationship with its reputed customers leading to continuous repeat orders from them along with the companys ability to produce supplies in accordance with the customer specifications, standards, and customization. Further the company has been continuously increasing their product as well as geographical reach. The scale if further expected to increase driven by new manufacturing facility set up which would lead to enhanced capacity as well as product offerings. Steady ramp up in scale of operations in the new plant would be a key monitorable over the medium term. Diversified end user industry base: The groups products are widely utilized by Original Equipment Manufacturers (OEMs) across diverse HVAC&R applications, including air conditioning, refrigeration, and process cooling systems. It caters to a diversified end user industry base which includes air conditioning, refrigeration, process cooling etc. Further the company has been approved a s a vendor to Ministry of Indian Railways which would further lead to an increase in scale of operations. A diversified end user industry base allows it, to overcome the risk of slowdown in a particular industry and achieving higher growth. Healthy financial profile: The group has a healthy financial profile marked by a networth of Rs 498.6 crore for the year ended March 31, 2025 as compared to Rs 130.3 crore a year ago. This is driven by steady accretion to reserves as well as equity raised through initial public offering (IPO) of Rs 341.95 as on October 2024. The capital structure has also been at healthy level due to reduced reliance on external funds leading to a low gearing and total outside liabilities to adj tangible networth (TOL/ANW) of 0.07 times and 0.2 times respectively for year ending on 31st March 2025 (as compared to 0.46 and 0.98 times a year ago). The group debt protection measures have also been at healthy level due to low leverage and healthy profitability. The interest coverage and net cash accrual to total debt (NCATD) ratio are at 24.2 times and 1.7 times respectively for fiscal 2025. The group debt protection measures are expected to remain at similar level over medium term. The financial profile is expected to remain healthy in the absence of any large debt funded capex. Key Rating Drivers - Weaknesses Susceptibility of operating margins to volatility in raw material cost and foreign exchange (forex) rates along with variation in product mix: Prices of the key raw materials copper and aluminum are volatile in nature and the same accounts for 70-75% of the total operating income. While the company incurs periodic price revisions partially mitigating the risk, the same is with a time lag. Further the group has more than 70-80% of their procurement through imports while exports are only 15-20%, hence the operating margin remains vulnerable to any sharp and sudden fluctuations in forex rates and volatility in raw material prices and realizations. This can be reflected in the volatile operating margins in the range of 12.5-17.5% over the past four fiscals through fiscal 2025. The margins have also been volatile due to varied product mix. The group has incurred margins of around 15% in the first quarter of fiscal 2026 and should continue to incur margins of 15-16% over the medium term. Stability of operating margins will remain a key monitorable in the medium term.
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Be prepared to invest in a down market and to "get out" in a soaring market, as per the philosophy of Warren Buffett.