IONEXCHANG - ION Exchange

📊 NSE: IONEXCHANG 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/14/2025 8:25

💰 Financial Performance

Revenue Growth by Segment

The Engineering segment grew 16% YoY in Q2 FY26 to INR 456.2 Cr. In FY23, the Engineering segment saw a 33% YoY increase, while the Chemical segment grew 11% YoY. Overall consolidated revenue grew 9% YoY in Q2 FY26 to INR 642.9 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company highlights growth in the Gulf, Emerging Markets, and North Africa (desalination projects), while Europe faced muted demand.

Profitability Margins

Consolidated PAT margin for Q2 FY26 was 7.47%, a slight decline from the 9.8% recorded in FY23. Engineering segment EBIT margins hit an all-time low of 4.8% in Q2 FY26 due to project mix and high infrastructure investments.

EBITDA Margin

EBITDA margin stood at 9.95% in Q2 FY26, representing a 1% YoY decline in absolute EBITDA to INR 131 Cr. Operating margins for the full fiscal 2024 moderated to 11.7% from 13.3% in FY23.

Capital Expenditure

The company is executing a capital expenditure plan of over INR 250 Cr between FY23 and FY25, primarily focused on the greenfield resin manufacturing facility in Roha, Maharashtra.

Credit Rating & Borrowing

CRISIL A+/Stable for long-term and CRISIL A1 for short-term. Interest coverage ratio was strong at 24.8 times in FY23, with debt expected to remain below INR 100 Cr despite high capex.

⚙️ Operational Drivers

Raw Materials

Key raw materials include resins, membranes, and steel for engineering projects. Specific percentage of total cost for each is not disclosed.

Import Sources

Sourced from India (Roha plant) and Europe (leveraging the Mapril acquisition). The company is also licensing membrane technology from Mann+Hummel.

Key Suppliers

Mann+Hummel (technology partner for membranes); other specific raw material suppliers are not disclosed.

Capacity Expansion

Current capacity not specified in MT; however, the company is commissioning a greenfield resin plant in Roha and has recently commissioned a 40 MLD desalination plant in North Africa with 60 MLD and 40 MLD plants in progress.

Raw Material Costs

Raw material costs are impacted by supply chain surges; the company managed a surge in costs driven by Suez Canal constraints which impacted cargo movement.

Manufacturing Efficiency

The company is leveraging its 'low-cost country presence' in India to manufacture membranes for global consumption under the Mann+Hummel partnership.

Logistics & Distribution

Impacted by Suez Canal constraints; the company is leveraging local presence in Europe through Mapril to optimize regional distribution.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

Growth will be driven by the commissioning of the Roha resin plant, expansion into the European market via the Mapril acquisition, and a technology licensing agreement with Mann+Hummel for membrane manufacturing. The company is also targeting high-growth sectors like solar and pharmaceuticals for ultra-pure water projects.

Products & Services

Ion exchange resins, water softeners, desalination plants (40-60 MLD), ultra-pure water systems for solar/pharma, and long-term Operation & Maintenance (O&M) services.

Brand Portfolio

Ion Exchange, Zero-B (implied via consumer segment leadership in softeners).

New Products/Services

New range of membranes manufactured in India via Mann+Hummel technology; expected to contribute to global consumption and expand market share in the water treatment segment.

Market Expansion

Targeting the European continent using Mapril as a springboard and consolidating positions in the Gulf and North Africa.

Market Share & Ranking

Maintains a leadership position in the domestic water softener segment.

Strategic Alliances

Technology licensing agreement with Mann+Hummel for membrane manufacturing; acquisition of Mapril in Europe.

🌍 External Factors

Industry Trends

Increasing demand for environmental infrastructure and desalination; shift toward ultra-pure water requirements in the solar and pharmaceutical manufacturing sectors.

Competitive Landscape

Operates in a highly competitive engineering segment; competes with global and domestic water treatment players.

Competitive Moat

Durable advantage through a diverse product mix and market leadership in water treatment. The chemical segment (resins) provides a high-margin (20%+) cushion against the cyclical engineering business.

Macro Economic Sensitivity

High sensitivity to industrial capex cycles; any slowdown in the Indian economy or end-user industries (Power, Steel, Fertilizers) adversely affects revenue.

Consumer Behavior

Steady demand for water softeners and home water solutions; segment recorded healthy volume growth despite a small quarterly loss of INR 2.7 Cr.

Geopolitical Risks

Suez Canal route constraints for cargo movement and potential impacts from global tariff wars (though US/Euro business currently remains unaffected).

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to pollution norms and manufacturing standards; the Roha project required specific licenses and approvals which were previously delayed by the pandemic.