During the combustion processes in boiler, fuel combine with oxygen and produce heat that is utilized for many purposes. During this process water vapour is formed and the loss of this vapor with the dry flue gases represents a substantial heat loss in the form of latent and specific heat. This heat recovery is possible by cooling the flue gases from boiler below dew point temperature and can be transferred to other fluid at a lower temperature; generally boiler make-up water. This type of heat recovery can improve overall efficiency (up to 10-15%). In this paper, a thermodynamic analysis has been carried out for evaluating gains from improved heat recovery. As gas temperature falls below dew point temperature (from 56.2 ? C to 53.33 ? C), water vapour starts condensing and total heat recovered (Sensible heat and Latent heat) is estimated as 4151.07248 kW along the length of heat exchanger. Out of total heat (4151.07 kW), 2237.68 kW sensible heat, 1913.388 kW latent heat is recovered along with condensate (2520 kg/hr). For this analysis, thermodynamic model has been developed; the thermodynamic analysis of heat recovery model predicts the sensible and latent heat recovery from condensing heat exchanger and mass of condensate formed, with maximum 11.4 % difference as compared to plant data.