Abstract Heat pipes have been extensively applied in the domain of energy conversion and heat recovery application. A novel radial heat pipe with internally finned condenser has been proposed to recover waste heat from air conditioning units. Full mathematical description and computational fluid dynamics model were developed to predict the loop flow and thermal performance in a single radial heat pipe, respectively. The research focuses mainly on the effects of input power, filling ratio, pipe diameter, and velocity of the cooling water on the thermal performance and entropy generation rate of this novel heat pipe. Numerical results illustrate that average reductions in total thermal resistance with utilization of fins approximately achieved 8.69% and 14.78% for fins nf = 4 and nf = 8, respectively. Similarly, entropy generation rate shows an average decrease of 19.4% and 37.5% for identical operations. Additionally, the effect of internally finned condenser on the multiphase fluid flow has been comprehensively analyzed, including the break of the condensed film, generation of bubbles and nucleation boiling. The results further indicate that incorporation of internal fins has a significant influence on enhancing thermal homogenization and waste thermal recovery efficiency of a radial heat pipe. Case results agreed well with experimental data within average deviation being no more than 10%.