Shree Refrigerat - Shree Refrigerat

📊 BSE: 544458 🏢 Industrial Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Defense and Marine HVAC&R solutions generated the bulk of revenue, with total operations growing 22.9% YoY to INR 98.73 Cr in FY25. H1 FY26 revenue was INR 50.39 Cr, a slight 1.1% decrease from H1 FY25 due to customer delivery schedules.

Geographic Revenue Split

Operations are concentrated near major Indian ports including Mumbai, Vizag, Kochi, and Chennai to serve naval and marine clients effectively.

Profitability Margins

FY25 Gross Margin (COGS based) was 49.3%, while Net Profit Margin was 13.2%, down from 13.7% in FY24. H1 FY26 Net Profit Margin compressed significantly to approximately 2.6% due to front-loaded execution costs.

EBITDA Margin

EBITDA margin for FY25 was 27.3%, down from 30.1% in FY24. H1 FY26 EBITDA margin dropped to 11.2% (a 1,907 bps YoY decline) due to a 71.1% increase in employee expenses and 94.3% increase in other expenses to support new HVAC project execution.

Capital Expenditure

The company is renting an additional 20,000 sq. ft. factory and planning a greenfield project of 50,000 sq. ft. (expandable to 100,000 sq. ft.) to meet growing defense demand.

Credit Rating & Borrowing

CARE Ratings assigned/reaffirmed CARE BB+; Stable for long-term and CARE A4+ for short-term facilities. Total borrowings as of March 31, 2025, stood at INR 46.92 Cr.

⚙️ Operational Drivers

Raw Materials

Specialized components for HVAC&R systems and raw materials like steel and copper; COGS represented 50.7% of total revenue in FY25 (INR 50.10 Cr).

Import Sources

Not specifically disclosed, though the company notes exposure to international trade developments and input cost volatility.

Capacity Expansion

Current capacity is being augmented by a 20,000 sq. ft. rented facility; a new greenfield project of 50,000 sq. ft. is planned to streamline naval inspections and accelerate deliveries.

Raw Material Costs

COGS rose 25.1% YoY in FY25 to INR 50.10 Cr, tracking revenue growth. Procurement strategies focus on managing volatility in raw material prices which remains a key constraint.

Manufacturing Efficiency

The company operates a backwardly integrated manufacturing facility and a design office with 21 specialized personnel to ensure quality standards required by the Navy.

Logistics & Distribution

Distribution is optimized through service and installation teams located near major ports to ensure long-term system reliability for naval vessels.

📈 Strategic Growth

Expected Growth Rate

50%

Growth Strategy

Growth will be driven by a 40-50% CAGR target through the execution of a large order book (INR 327.62 Cr), expansion into Data Centre cooling via a JV with Smardt (Canada), and scaling turnkey HVAC solutions for the Indian Navy.

Products & Services

Marine and industrial chillers, turnkey HVAC solutions, oil-free magnetic bearing chillers, control panels, and aftermarket maintenance services.

Brand Portfolio

Shree Refrigerations, Trezor (Subsidiary).

New Products/Services

Oil-free magnetic bearing chillers for Data Centres and specialized HVAC systems for naval warships like P-17 Alpha.

Market Expansion

Targeting high-growth sectors such as Data Centres and expanding service presence in Chennai and other port cities.

Market Share & Ranking

Strategic dominance in the Indian Naval HVAC market; only Indian company qualified by three professional directorates of the Indian Navy.

Strategic Alliances

Technical cooperation agreement signed with Smardt (Canada) for oil-free Data Centre chillers; strategic investment secured from Maharashtra Defence and Aerospace Venture Fund.

🌍 External Factors

Industry Trends

The Indian Naval HVAC market is projected to be worth INR 3,200 Cr to INR 4,800 Cr over the next 5-7 years. The industry is shifting toward high-precision, customized fabrication and oil-free cooling technologies.

Competitive Landscape

Faces competition from multinational companies and local system integrators, though backward integration provides a cost and quality advantage.

Competitive Moat

Durable moat through 40+ years of heritage and unique certifications from the Directorate of Marine Engineering and Directorate of Architecture, which are difficult for competitors to replicate.

Macro Economic Sensitivity

Highly sensitive to Indian Government defense spending and naval infrastructure investment trends.

Consumer Behavior

Increasing demand for mission-critical, high-performance refrigeration in sectors like pharmaceuticals and defense.

Geopolitical Risks

Impacted by regulatory changes and international trade developments affecting the defense and industrial sectors.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with stringent Indian Navy standards (Directorate of Marine Engineering) and the Companies Act 2013.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 30.4% (INR 5.69 Cr tax on INR 18.69 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Tender-driven nature of business leads to lumpy revenue; working capital intensity (88% utilization) poses liquidity risks if project cycles lengthen.