🛡️ The Hidden Defence Gem Powering India’s Navy
How a niche engineering company is driving India’s maritime strength with massive growth potential ahead
⚓ Introduction: The Silent Hero Behind India’s Naval Power
Warships roam the seas, radars scan hostile zones, data-centres hold mission-critical information. They look powerful — but they have a weakness: heat.
Saltwater, humidity, high mechanical load, and 24x7 operation generate extreme heat that can cripple machines, delay missions, or cost lives. Keeping them cool is mission-critical.
And that’s where a silent partner of India’s Navy steps in.
Meet Shree Refrigerations Ltd (SRL) — a 40+ year-old engineering company that has quietly become India’s most trusted provider of marine-grade cooling, HVAC, and defence-infrastructure systems.
With India pushing self-reliance under Aatmanirbhar Bharat, this company is finally stepping into the spotlight.
🏭 Company Overview: Innovating Where Few Dare
SRL is not building missiles or submarines. It builds the systems that keep them alive.
🔧 What the Company Makes:
| Category | Purpose |
|---|---|
| Marine HVAC & Refrigeration | Cooling for warships, submarines, radar rooms |
| Specialised Chillers & Heat Exchangers | Temperature control for mission electronics |
| Electrical Panels | Integrated control systems |
| Turnkey Defence HVAC Projects | Custom solutions for shipyards & naval facilities |
📌 Exclusive Recognition:
The Indian Navy has registered SRL in 3 critical categories, a unique competitive advantage.
📌 Long-Term Partnerships:
Works with major defence PSUs:
- Mazagon Dock Shipbuilders
- Hindustan Shipyard
- Garden Reach Shipbuilders
📌 Manufacturing Capability:
- Owned: 20,000 sq ft facility
- Leased: 17,000 sq ft
- ✔️ In-house production ensures quality & reliability
🧠 Competitive Strengths: Why SRL is Special
🥇 1. A Niche That’s Hard to Enter
Cooling defence platforms is highly specialized — requiring:
- Salt-proof technology
- Customized fabrication
- Defence compliance certifications
SRL has decades of expertise.
🛠 2. Custom Engineering + After-Service Revenue
Unlike mass manufacturers, SRL provides:
- Custom solutions
- Installation & integration
- Long-term maintenance contracts
This builds recurring revenue.
🪖 3. Defence Tailwinds + Aatmanirbhar Bharat
India is:
💰 Increasing defence expenditure
⚓ Expanding its naval fleet
🛠 Boosting domestic manufacturing
SRL sits at the intersection of all three.
📉 Challenges & Risks: The Other Side
| Risk | Impact |
|---|---|
| High dependency on defence contracts | Slower payouts, bureaucratic delays |
| Long billing cycles in turnkey projects | Tight working-capital |
| Supplier availability issues | Potential delays in delivery |
| Margin fluctuations | Recent quarter margins dropped due to project complexity |
📌 Employee surge: Headcount rose from 247 → 323, increasing short-term expense, expected to pay off via scalability.
📊 Financial Snapshot & Order Book
💵 Revenue (H1 FY26)
- ~₹50 Cr vs ₹51 Cr YoY
- Margins dipped due to heavy on-site work
📉 Profit Impact
- H1 FY26 Net Profit: ₹1.5 Cr
- Down ~82% YoY
📦 Order Book (FY25): ₹327.6 Cr
Breakdown:
| Segment | Value |
|---|---|
| HVAC Systems | ₹190.8 Cr |
| AC Plants | ₹58.3 Cr |
| Refrigeration Plants | ₹29.3 Cr |
| Spares | ₹29 Cr |
| Turnkey | ₹15.9 Cr |
| Chillers + Others | ~₹4 Cr |
📌 Order book is ~3.3× FY25 revenue = Strong future visibility.
🚀 Growth Outlook & Triggers
🆕 Capacity Expansion
A new 50,000 sq ft plant (expandable further) will:
- Increase production
- Enable bigger defence orders
- Reduce delivery times
🤝 Strategic Partnership
Partnership with Smardt (Canada) for advanced oil-free chillers brings cutting-edge technology.
🛡 Rising Demand from Defence + Data-Centres
- Navy modernization programs
- Coast Guard expansion
- Data-centre boom = Cooling demand
🎯 Analysts project:
- ~50% CAGR over 3–5 years
- EBITDA expansion to 20–22% if execution stabilizes
🔮 Conclusion: Will This Hidden Gem Stay Hidden?
Shree Refrigerations Ltd isn’t building missiles, but it keeps missiles operational. It doesn’t build warships — it keeps warships combat-ready.
This is a mission-critical niche that is rare and defensible.
Its growth potential is clear, but execution remains key.
📌 Final Verdict
A specialized defence support business with:
✔ High entry barriers
✔ Long-term tailwinds
✔ Strong order visibility
Reviewed by Aparna Decors
on
November 23, 2025
Rating:
