AI assistant
Ion Exchange (India) Ltd — Call Transcript 2026
Jun 5, 2026
61696_rns_2026-06-05_6cb2c97d-5b74-4625-b050-b55b46f70d9d.pdf
Call Transcript
Open in viewerOpens in your device viewer
ION EXCHANGE
Refreshing the Planet
June 5, 2026
To
BSE Limited
The Corporate Relationship Dept.
P.J. Towers, Dalal Street
Mumbai-400 001
Scrip Code: 500214
National Stock Exchange of India Limited
Exchange Plaza, C-1, Block- G,
Bandra Kurla Complex, Bandra (East),
Mumbai-400 051
Symbol: IONEXCHANG
Sub: Submission of Transcript of the Earnings Conference Call held for Q4 FY 2025-26
Dear Sir/ Madam,
Pursuant to Regulation 30 read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the transcript of the Earnings Conference Call held with Institutional Investors/Analysts (Group Meeting) on Friday, May 29, 2026, to discuss the operational and financial performance of the Company for the fourth quarter and year ended March 31, 2026.
The said transcript is also available on the Company's website at www.ionexchangeglobal.com.
Kindly take the information on your record.
Thanking You,
Yours faithfully,
For Ion Exchange (India) Limited
NIKISHA
Digitally signed
by NIKSHA
YOGESH SOLANKI
Date: 2020.06.05
17:07:32 +05'30'
Nikisha Solanki
Company Secretary & Compliance Officer
ACS- 50894
Encl.: As stated above
ION EXCHANGE (INDIA) LTD. | CIN: L74999MH1964PLC014258
Regd. Office: Ion House, Dr. E. Moses Road, Mahalaxmi, Mumbai - 400011, India.
Board: +91 22 6231 2000 | Fax: +91 22 2493 8737 | E-mail: [email protected] | Web: www.ionexchangeglobal.com
Offices: Bengaluru | Bhubaneshwar | Chandigarh | Chennai | Hyderabad | Kolkata | Lucknow | New Delhi | Pune | Vadodara | Vashi | Visakhapatnam
Ion Exchange (India) Limited
Q4 & FY26 Earning Conference Call
May 29, 2026
Moderator:
Ladies and Gentlemen, Good Day and Welcome to Ion Exchange (India) Limited Q4 & FY26 Earning Conference Call.
As a reminder, all participant line will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing “*” then “0” on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you and over to you, ma'am.
Purvangi Jain:
Good afternoon, everyone and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Ion Exchange (India) Limited.
On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the “Company’s Earnings Conference Call for the 4th Quarter and Financial Year 2026.”
Before we begin, let me mention a short cautionary statement:
Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.
Let me now introduce you to the Management participating with us in today's Earnings Call and hand it over to them for their opening remarks. We have with us Mr. Aankur Patni -- Vice Chairman; Mr. Indraneel Dutt – Managing Director & CEO; Mr. Vasant Naik – Group Chief Financial Officer; and Mrs. Nikisha Solanki – Company Secretary.
Without any further delay, I request “Mr. Vasant Naik to start with his Opening Remarks.” Thank you and over to you, sir.
Page 1 of 19
Page 2 of 19
Vasant Naik:
Thank you, Purvangi. Good afternoon, everybody. It is a pleasure to welcome all to the Earnings Conference Call for the 4th Quarter and Financial Year 2026.
For the 4th Quarter under review on a consolidated basis, the company reported an operating income of INR 8,633 million, an increase of around 3% year-on-year.
The EBITDA stood at INR 199 million and EBITDA margin stood at 2.31% and net profit was INR 243 million and the PAT margin was at 2.81%.
For the Financial Year 2026, the company reported operating income of INR 29,148 million, an increase of around 7% year-on-year.
EBITDA stood at INR 2,102 million, down 29% year-on-year. The EBITDA margin stood at 7.21%, and the net profit was INR 1,432 million, whilst the PAT margin was at 4.91%.
Now, let me take you through the “Quarterly Segmental Performance on a Consolidated Basis”:
In the Engineering segment, the revenue for the quarter stood at INR 5,539 million, which is flat on a year-on-year basis. The segment EBIT was INR 215 million.
The enquiry pipeline continues to remain healthy with both quarter-on-quarter and year-on year growth in order inflows, driven primarily by medium-sized opportunities across sectors.
During the quarter, planned dispatches of certain high-value engineering contracts to the GCC geographies were impacted due to disruptions arising from the West Asia crisis. However, we have since received customer clearances to proceed with the execution post the end of the quarter.
The closure of the Sri Lanka project continues to progress as planned and we expect to complete the project by the end of the 2nd Quarter of the Financial Year 2027.
During the quarter, we achieved an important milestone with the successful commissioning of the raw water treatment plant for the IOCL Panipat Refinery project, which is the largest industrial water treatment package awarded in India.
We have also entered into a technology transfer and manufacturing collaboration with MANN+HUMMEL, a global leader in filtration technology, for the manufacture of ultra-filtration membranes and
transfer of membrane bioreactor technology to India. This partnership further strengthens our membrane portfolio and enhances our technology offerings.
As at 31st March '26, the engineering order book stood at INR 26,433 million, providing healthy revenue visibility going forward.
Coming to the "Chemical Segment":
The revenue for the quarter was INR 2,297 million, an increase by around 3% year-on-year, while the EBIT stood at INR 334 million.
The business continues to record sequential and year-on-year improvement in turnover. However, the turnover was impacted primarily in March '26 due to logistic disruption from the West Asia crisis. In addition, the profitability during the quarter was also affected by input cost increases as well as the Rohafacility cost. We have initiated appropriate pricing action to pass on the cost increases to the customers.
We have also successfully completed during the quarter the commissioning of all the manufacturing lines at Roha. Further, the facility has since received post the end of the March quarter, certification from the (WQA), Water Quality Association, which is a globally reputed testing agency for the resins which are manufactured at Roha. The certification is expected to enhance our access to international markets and support future growth.
We have also secured strategic contracts with key customers, which augurs well for the business growth and strengthens our position in the market.
For the "Consumer Product Division":
The revenue for the quarter stood at INR 1,047 million, an increase by 34% year-on-year. The loss for the quarter was INR 46 million compared to a loss of INR 52 million in the same period of the previous year. This segment continues to witness healthy volume growth supported by expanding market reach and increasing product acceptance. The company continues to invest in the business to build a significantly higher and more scalable revenue platform.
Coming to our "International Operations and our Group Companies":
Execution of the 20-year DBOOT contract valued at OMR 73.46 million, which was awarded by the Petroleum Development Oman to our
Page 3 of 19
subsidiary company, Ion Exchange & LLC Oman, is progressing as per schedule.
We have also entered into a project joint venture with a local partner in Malawi for the execution of a water treatment package valued at USD 18.1 million. This contract has been awarded by the Northern Region Water Board, Malawi.
In parallel, we continue to strengthen our international footprint and are expanding our presence across the overseas market with a focused strategy to grow our product business and deepen customer engagement in key geographies.
With this, I conclude the opening remarks and we can now open the floor to "Q&A."
Moderator:
Ladies and gentlemen, we will now begin with the question-and-answer session. Our first question comes from the line of Harsh Shah from Merisis Advisors. Please go ahead.
Harsh Shah
Merisis Advisors:
Can you highlight the strategic significance of a tie-up with MANN+HUMMEL JV and what will it do us in terms of capabilities, geographical reach and client pre qualifications?
Management:
. The MANN+HUMMEL partnership and collaboration is a, very important milestone for the future success and growth of the company. As we have talked in the past, along with resins and water treatment specialty chemicals, the membrane technology and product line is one of the important strategic growth levers of the company for the future. The global membrane market is growing at a CAGR of 10%-plus and would remain a very important market for the company. We are one of the very few companies which have such an extensive range of membrane products starting from reverse osmosis membranes to ultra-filtration membranes and nano-filtration membranes. This partnership with MANN+HUMMEL was made with the intention of further expanding the membrane portfolio to have the latest technologies of ultra-filtration PVDF-type flat sheet membranes and to get the MBR technology for which MANN+HUMMEL is famous. With this partnership we should be able to exploit the total potential of the global membrane market in the years to come.
Harsh Shah
Page 4 of 19
Page 5 of 19
Merisis Advisors: Okay, sir. Can you also highlight on the geographic reach and how do you propose to reach out to the clients about the new products that you will be developing with MANN+HUMMEL?
Management: So, already the membrane products are beginning to get distributed in our market in Middle East as well as in the Asia-Pacific geographies. In the near future, we plan to take some of this product also to the Africa and the Europe markets. As and when the membrane products are co-developed with MANN+HUMMEL and with their technology, then those products will also be added to the portfolio of membrane offerings in the global markets as well.
Harsh Shah
Merisis Advisors: Okay. Sir, can you also elaborate on the acquisition of MAPRIL and what does this acquisition do for us in terms of capacity building or geographical expansion?
Management: The acquisition of MAPRIL was done in 2023 middle and that gave the company a strategic foothold in the South Europe market, specifically in the Iberian Peninsula of Portugal and Spain. This company is based in Porto on the west of Portugal and allows us to be a local company and tap the potential of the market for the entire range of water treatment products and solutions in that geography. The company since the acquisition has been fully integrated into the Ion Exchange Group and now the company is expanding its presence and increasing its business in the Iberian region, and is expected to make an increasing contribution to the growth and success of Ion Exchange.
Harsh Shah
Merisis Advisors: Okay, sir. Thank you so much. I will join back in the queue.
Moderator: Our next question comes from the line of Kishore Kumar from Unifi Capital.
Kishore Kumar
Unifi Capital: Sir, my question is on the Oman project that we won in the last quarter. So, since it is a build-operate-transfer project and we are executing in a JV, what is the upfront CAPEX that we need to incur, and is there any grant that will be coming from the customers which can actually ease out the CAPEX requirement?
Management: The Petroleum Development Oman project is being executed through our joint-venture company in Oman, which is Ion Exchange & Co. LLC
, Oman. The CAPEX is around USD 40 million over the next two years, and we'll be funding it with a mix of debt and equity.
Kishore Kumar
Unifi Capital: And what is our contribution to the debt, sir, in this actually out of the US$ 40 million, and what would be the partners contribution?
Management: As mentioned earlier, the project will be funded by a mix of debt and equity. Our equity contribution will come from internal accruals, and the balance will be shared by both partners, keeping in mind that IE & Co. LLC, Oman is a joint venture company where we hold a 51% share.
Kishore Kumar
Unifi Capital: Okay. And my second question is on the Roha plant. Now, we have commissioned it fully. Are we in line with our previous guidance to achieve the 25%-30% of capacity utilization and how are we proceeding on the customer acquisition front as well?
Management: Our guidance has been in the past that we will work towards 25% capacity utilization of the Roha plant in the first full year of operation. We continue to remain in line with those expectations. While there are near term headwinds related to the West Asia crisis — notably higher costs for certain critical raw materials such as styrene and oleum — we believe these risks will be mitigated over time. We should be able to meet our earlier guidance from a plant capacity utilization standpoint for this financial year.
Kishore Kumar
Unifi Capital: And just a follow-up on this, sir. Since the input cost prices have gone up materially, do you think that PBT break-even is possible this year or it will actually differ by one or two quarters?
Management: We are trying our best to see that we can get there. As you all know, the West Asia crisis continues to be, very dynamic, but as we are just in the first couple of months of this new financial year, we are still endeavoring our best to see that we can achieve that objective.
Kishore Kumar
Unifi Capital: Okay. Got it, sir. Sir, I have a question on the engineering segment as well. How is the legacy project execution been going on? We actually guided that it will spill into FY27 as well. How are we positioned there? Do you think there will be margin drag because of this in FY27 as well?
Management: As we have given in the earlier guidance and updates, the project continues to move at the expected pace. A significant part of the project
Page 6 of 19
execution has already been done. However, as we have said earlier, the balance of the project will be executed in this financial year. We continue to work on the site and with the customer in line with the earlier given timelines.
Kishore Kumar
Unifi Capital: And any comments on the margins for the engineering segment?
Management: On engineering margins, we faced headwinds due to deferral of certain export shipments—approximately Rs. 60 crore—related to the West Asia crisis; several consignments bound for GCC markets were postponed. Consequently, the share of higher cost domestic shipments increased in the final quarter, reducing engineering segment margins relative to the global revenue mix.
Moderator: The next question comes from the line of Nirmam with Unique PMS. Please go ahead.
Nirmam
Unique PMS: My first is on the EPC business. So, you mentioned that we have some slowdown because of some GCC delivery deferrals. But apart from there, are there any challenges because of which we are seeing some issue on the growth side of things?
Management: No, I think predominantly those were the two headwinds I talked about. Apart from that, our order intake has been quite healthy; in fact, it has been 40% more than the last full financial year, and we expect a majority of those projects to get executed in this financial year and the next. So, apart from those two headwinds, which we called out, we do not anticipate any other major challenges in the engineering segment. We continue to focus on expanding our order book with large, profitable engineering contracts, particularly in international markets.
Nirmam
Unique PMS: Okay, sir. And my second question, sir, is on the chemicals business. So, we have seen some impact on profitability. And again, you mentioned one was the input price pressure and the second was the Roha. So, if you could comment on the profitability ex of Roha interest and depreciation, so, how are we seeing the outlook there, and if we can maintain our historic level, it will be better?
Management: As noted, the segment faced three primary headwinds: higher interest and depreciation charges at Roha, rising input costs across the segment, and Q4 revenue disruption from the West Asia crisis. We
Page 7 of 19
expect a portion of the lost Q4 revenue to be recovered during the current financial year. We continue to monitor the increase in input costs and are working to pass these increases on to customers as soon as possible. Approximately one-quarter of the segment's overall impact is attributable to factors outside Roha.
Page 8 of 19
Nirmam
Unique PMS: Okay, sir. And this last is question on the legacy project. So, that completes by second or third quarter of this year?
Management: We should be able to close it in this financial year. The guidance we can offer is that just to close out in this financial year.
Nirmam
Unique PMS: Okay, sir. Got it. Thank you and all the best.
Moderator: Our next question comes from the line of Tejas with InCred Equities. Please go ahead.
Tejas
InCred Equities: So, I wanted to get some clarity on the margin in the chemical segment. So, like you said that 25% of the that has been there, that is due to Roha expansion. But apart from that, can you clarify what is the bifurcation between the Middle East logistics issue or due to the price increases?
Management: See, I think I will clarify. I said that out of the 4% drop in the segment, three-fourth of that is because of the Roha expenses. Only one-fourth of that was because of the Middle East crisis the input cost increases and some revenue specifically for our resins business was deferred out because of logistics challenges. We expect that to come back in this financial year.
Tejas
InCred Equities: So, I mean, out of the 10% margin decrease that has happened in like the chemical segment, the margins have gotten from 25% to 15, right? So, out of 10%, 7.5% is due to the Roha expense?
Management: The Roha impact will be just under 7% for the quarter and what Mr. Indraneel was explaining was the overall impact for the full year.
Tejas
InCred Equities: Okay. But still, 7.5% is a very high number. Did we not capitalize that cost which was done for the business? I think the routine expense that can impact margins so severely.
Page 9 of 19
Management: No, the entire utility building and the associated infrastructure were capitalized in the month of September'25, while the manufacturing lines got progressively capitalized during the year, with a major capitalization taking place in March of '26. That is why there is a big delta in the bottom line for the Roha.
Tejas
InCred Equities: Yes, but if we capitalize it, then there should not have been any impact on the EBITDA side, right, or is this just that there is no change in the EBITDA, is mainly the EBIT that we have been suffering?
Management: That is what I am saying. I am talking of the segment margin which is basically the EBIT margin. So, for the quarter, it was just under 7% and for the full year, it was around 3%.
Tejas
InCred Equities: Okay, sure. And coming on to the next question, in the engineering segment also, we suffered a lot of margin contraction. So, is almost all of that has contributed due to the Middle East operations only?
Management: Yes — several factors, previously noted, affected the engineering segment. Beyond the Middle East crisis and the deferral of certain export shipments, we are still experiencing impacts from a continuing legacy project that is expected to persist into part of this year. In short, a combination of these factors has reduced the engineering segment's profitability.
Moderator: Our next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead.
Deepak
Sundaram Mutual Fund: Thank you for the opportunity. So, I just want to double click on this Roha resin plant. So, have you fully commissioned the 42,600 cubic meter capacity along with full backward integration?
Management: We have commissioned the plant, backward integration is underway, but that does not affect the production of the plant, it will help us improve our profitability. Otherwise, the plant is fully commissioned. As we have said in the past, a significant part of production will be used for exports in the global market, specifically in the US in the drinking water segment for which a particular certification from the Water Quality Association of the USA is required. That has been obtained and hence we expect the revenue from the Roha plant to start picking up from this financial year onwards.
Page 10 of 19
Deepak
Sundaram Mutual Fund: Okay. And sir, you have spoken about some strategic contracts which you have won with some key customer in chemicals division. I just wanted to clarify, was it related to Roha plant or was it related to the overall chemical segment, because why I ask that question is because majority of your capacity addition is coming through that Roha plant so, hence I am asking that question?
Management: So, that particular comment was linked to our other portfolio product lines and offerings in the chemicals segment which is into water treatment specialty chemicals. So, in that segment, we have made that particular remark. , As we have said in the past, this capacity addition in Roha is essentially for the exports market which is where our teams are working with our global customers to get more of their volume and we are confident in doing that as we go forward.
Deepak
Sundaram Mutual Fund: Okay. You have highlighted about the RM inflation and logistic disruption also. With this backdrop, what is our sales and margin outlook for '27 in both the chemicals and engineering division? And how much CAPEX are we planning to spend in FY27? And by the end of FY27, what would be our gross debt position?
Management: At this point, we cannot provide specific guidance. Consistent with our traditional practice, we expect to offer guidance in the second half of the financial year — it is simply too early to answer these questions now. Furthermore, given the West Asia crisis and fast-changing dynamics, we prefer to defer this question. We will be in a position to provide more clarity in the second half of the year. Directionally, sales and margin outlook for FY 27 should continue to improve over the next few months and we continue to monitor the implications of the Global economic and geo political crisis
Deepak
Sundaram Mutual Fund: Okay. What kind of CAPEX are we planning to do in FY27, and since you highlighted that we will be spending some more on that Oman project also, so just on CAPEX number and gross debt position, let us say, by the end of FY27, if Vasant sir could answer, that would be very helpful.
Management: At this juncture, the CAPEX what we have envisaged is more into the maintenance and routine CAPEX, which is in the region of around Rs.30 to 40 crores. As Mr. Indraneel mentioned, as we move forward
during the year, we will share with you any new major CAPEX which we have in mind, but that will be later during the quarters. And in terms of the gross debt, presently it is in the region of Rs.384 crores. At the moment, we are not envisaging any major CAPEX unless we go for any plant expansion, which we will inform in due course as and when the plans get crystallized.
Deepak
Sundaram Mutual Fund: Okay. Thank you so much.
Moderator: Next question comes from the line of Harsh Shah with Merisis Advisors. Please go ahead.
Harsh Shah
Merisis Advisors: Just to carry forward from the previous participant, sir, so you told that the maintenance and routine CAPEX for FY27 will be Rs.30-40 crores and gross debt will be around Rs.384 crores. So, what are our current capacities, which will get completed any across different products, if you can give a brief idea about it, that would be helpful?
Management: So, as we said that our current objective is to utilize the Roha CAPEX and the Roha capacity that we have set up. We are mindful of the return on capital employed for the Roha project. And that is what the focus of the company is on. As we work on growing the revenues from the Roha segment, we continue to evaluate other CAPEX opportunities for further expansion. However, we will come back with that information at an appropriate time. For now, our focus is to see how we can improve the return on the capital deployed in Roha.
Harsh Shah
Merisis Advisors: Okay, sir. Thank you so much.
Moderator: Next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Saket Kapoor
Kapoor & Company: Namaskar sir. Thank you for the opportunity. Sir, firstly, on the UP Jal Jeevan Mission Project, what percentage of the same has been executed? And if you could just explain to us how the receivable movement being from March ending to till date?
Management: I think we heard the question. So, I would say about 30% of the scope is still pending to be executed. The pace of execution remains slow. We continue to execute those projects to the extent of collections received so that we can manage our working capital.
Page 11 of 19
Page 12 of 19
Saket Kapoor
Kapoor & Company: Yes, sir. So how have been the receivable movements at the closing balance for March and the closing balance today we have received out of the outstanding we had from this project?
Management: We do not typically share any specific such details, sir, but what we can say is post the announcement from the government on the continuation of the Jal Jeevan Mission Scheme, we have seen some start of funds flowing. So, we are hopeful that more funds will start flowing in, and as we see more funds coming in, we will also increase the pace of balance execution.
Saket Kapoor
Kapoor & Company: And secondly, on the consumer products division, I think so our revenues have gone up for this financial year. So, if you could just share the strategy or the outlook for the segment, and when can we expect this to start contributing profitability to the company?
Management: We remain consistent with our earlier guidance on the consumer products division. As we've said in previous calls, we continue to invest for growth in this segment, and our efforts are showing results: the division has grown 34% year-on-year. Comparing this year's financials to last year, losses in the segment have decreased. The outlook remains positive. We expect to grow further on a similar trajectory, though perhaps at a slightly lower rate given the higher base this financial year. We also expect better bottom-line performance, with the aim of at least breaking even or achieving a modest, low single-digit profit in this business line. All efforts are focused on driving additional top-line growth while improving operational profitability and overall performance of the division.
Saket Kapoor
Kapoor & Company: You are not able to give us a guidance in terms of margin definitely, but for the core segment of chemicals, how is the operating environment currently, and how is our utilization level for the current ensuing quarter wherein we are two-thirds into it today, so if you could just give us some understanding on the business operating environment on the chemicals segment?
Management: So again, as in the past, we have said the chemicals segment continues to be extremely dynamic. As we have said earlier, a lot of parameters drive profitability, and we have to keep a very close watch on all these parameters to ensure sustained profitability performance. In the last
quarter, because of the unexpected events leading to the West Asia crisis, we had a significant headwind on the raw material cost in this segment.. The teams are working with our customers to see how we can pass on some of the raw material input costs back to the customers through pricing changes, and we expect with some of those measures, the overall profitability will improve, at the same time, we are also de-risking our supply chain by opening up manufacturing centers in other parts of the world close to our markets. We are happy to say that our manufacturing plant in Dammam, Saudi Arabia for the Middle East market has now started commercial production, and we hope to cater to more customers locally from that facility, and we continue to work on that strategy in other parts of the world as well.
Management:
The long-term outlook for the segment remains extremely positive for us, and that is the reason why we have invested so heavily into that segment. We do feel that we have not even scratched the surface when it comes to the international markets. While the West Asia crisis or otherwise some temporary headwinds do exist, but the long-term story remains as bright as it was, and I do not think that is something which we are worried about.
Saket Kapoor
Kapoor & Company:
To conclude, sir, worst in the margin trajectory is behind us as the March earnings we have reported for the segment or the headwinds which we faced are still negating our profitability for the ensuing quarter also, if you could just give us some thought process on the same?
Management:
I would say that we have been able to mitigate the headwinds we have received, and we expect to see the outcome coming forward. Having said that, as I have always said about this segment, the situation is very dynamic, and at this point in time, other than this, it will be difficult to comment any further.
Saket Kapoor
Kapoor & Company:
Okay, sir. Thank you.
Moderator:
Our next question comes from the line of Kishore Kumar with Unifi Capital. Please go ahead.
Kishore Kumar
Unifi Capital:
Hello! Sir, my question is on the Roha facility. I think we started this investment back in 2021-22, and we implemented it over a period of two, three years now. So, when you are actually guiding for 25% of
Page 13 of 19
utilization in the coming years, what kind of customers are we actually targeting to get into? Do we already have some kind of off-take arrangement with them, because when we actually started the implementation, we would have already got in touch with those customers, are they new customers or existing customers, how do you see this actually trending out in the coming quarters?
Management:
The Roha facility was established primarily to serve our export markets. We decided to build a brand-new facility in addition to our existing Ankleshwar plant because we were receiving demand that exceeded our existing production capacity.
Over the past two to three years, we have been in discussions with several large customers who are inclined to take significant volumes. This includes both existing customers who require larger volumes and new customers. Many of our existing customers, both in India and abroad, have been requesting more supply and higher volumes.
We expect that the Roha plant will enable us to meet this demand, and we aim to progressively increase our share of business with these customers soon, leveraging the capability and capacity that Roha provides.
However, it is important to note that many of these products are used in critical production processes at our customers' facilities. This requires an extended period of trials, validations, and certifications, which can only be initiated after the plant is fully commissioned. Therefore, there is an introduction cycle time that we must respect.
Our teams are actively working with customers across various geographies to ensure we can cater to more of their demand from the Roha facility as soon as the qualification processes are complete.
Kishore Kumar
Unifi Capital:
Are these customers are traders or end-users?
Management:
It is a combination of OEMs as well as end-users that we cater to.
Kishore Kumar
Unifi Capital:
Okay. Sir, my second question is a book-keeping question. So, if I look at the other income for the last Q4, there is a significant increase in the numbers. Is there any one-off there or is it a FOREX gain that we are actually accounting it in the other income?
Page 14 of 19
Page 15 of 19
Management : In the 4th Quarter, there is primarily two elements which has got included. One is the FOREX gain on exports which we have accounted in this quarter. And also we have claims in respect of a EPC contract, that also is forming part of the other income.
Kishore Kumar
Unify Capital: Can you quantify which are if actually possible?
Management: May not be able to quantify, but we can say the major chunk is comprising of these two elements in the other income.
Kishore Kumar
Unify Capital: Okay. And also on the order value that we actually quoted in the presentation, it is not including the Oman project that we actually got in Q4, is it not? Any reason for excluding it, sir?
Management: The order inflow and order backlog what we are disclosing is primarily for the standalone entity that is Ion Exchange. We do not include the subsidiary or any associate order flow or backlog in the numbers.
Kishore Kumar
Unify Capital: Got it, sir. Thank you.
Moderator: Our next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead.
Deepak
Sundaram Mutual Fund: Thank you for the follow-up. Sir, I just want to double check on the chemicals. So earlier you highlighted that due to some logistical issues, there was some delay in dispatches, hence chemicals revenue has seen a minor decline QoQ. Just wanted to know what was the revenue loss which happened in Q4 in chemicals division because of these issues?
Management: We do not provide specific numbers on the revenue loss incurred due to the West Asia crisis. The crisis is ongoing, and we expect the impact to continue into this quarter until logistics and shipping lines resume normal operations. So, we'll need to wait and see how the situation develops. We should be able to share more details by the end of the first quarter.
Deepak
Sundaram Mutual Fund: Okay. And sir, one question I had on engineering. So, this new alliance or tech transfer of MANN+HUMMEL membrane, just wanted to understand, who are we competing here -- are we trying to dislodge any existing competitors through our connection and we will be supplying this to the clients or is it an entirely new product which is currently not being used in India and you are trying to push it forward because of some better technological advancement versus what is being currently used? And what can be the main primary application -- is it more towards power and steel or which kind of standard or substandard subsystems which these membranes will be going into?
Management: These are not new products. These products have been present in the market. Membrane market is growing at the rate of 10%-plus globally, which is one of the fastest growing segments. We hope to assimilate this technology to strengthen the portfolio of our membranes manufactured by us. In the membrane space, we compete with the global technology leaders like DuPont, Hydronautics, Toray, Veolia. These are all global players. We compete against them and we will compete against them in India as well as in all other global markets. The applications for these membranes are many. They are required for recycling, reuse, wastewater treatment, STPs (sewage treatment plants), and brackish water treatment. So, there are many applications for these membranes across the entire range of reverse osmosis, ultrafiltration, nano-filtration. We are confident to leverage the MANN+HUMMEL partnership and the new technology absorption to be able to cater to the global market both with the existing and the new customers.
Deepak
Sundaram Mutual Fund: Since you have highlighted about some of the competitors, what is our pitch here, is it that since we will be manufacturing in our existing facility, so we have certain cost advantage?
Management: Yes, as I mentioned, all the companies you heard about are either US, European, or Japanese. We are one of the very few companies—aside from the Chinese—that manufacture these products. This alliance gives us access to advanced technology and cost efficiency, while also reinforcing the government's "Make in India" vision. It represents our commitment to an Indian mission with a global outlook. As a result, we expect significant growth not only in domestic markets but also internationally.
Page 16 of 19
Page 17 of 19
Deepak
Sundaram Mutual Fund: Okay. Got it. Sir, on the engineering front, since you mentioned about that large contract win, are we expecting any revenue flow through in FY27 from that project since it is a longer project I understand that?
Management: Yes, we are expecting some revenue from that project. If you remember, this is actually a BOOT concession contract we have received. So, the revenues will come in terms of O&M revenue. A part of that revenue will start coming in slowly from this financial year. However, I would like to remind you that this revenue will come into our joint venture company, Oman, and will be recognized as part of our consolidated revenue earnings. So, you will see at the end of this financial year that there will be a delta growth in our revenues in the Oman joint venture.
Moderator: Thank you. Our next question comes from the line of Dheeraj with InCred Equities. Please go ahead.
Dheeraj
InCred Equities: Hello, sir. I want to again get back on the engineering segment. So, I think most of the issue with the margin compression in this segment was due to the Middle East operations. Is that correct?
Management: No, what we said is we had a headwind or a challenge in the last quarter because of the West Asia crisis. The other challenges were because of the continuing legacy project and the slow progress of the UP project. To be aligned
Dheeraj
InCred Equities: Okay. I think UP was around Rs.300 crores of project remaining. How much have we executed in this quarter?
Management: Quarter-specific numbers we will only be able to share at the end of this particular quarter. As I said, the project execution pace is dependent on the inflows that we receive from the government. Those inflows have started showing a positive trend, especially after the last budget where the government reaffirmed its commitment to the scheme and extended the scheme for the next four years. Since then, we are seeing the fund flow slowly improving and we hope that continues and then we will also be able to speed up the execution of the balance part of the project. But, that will not get over in this financial year, it will at least take the
next financial year to complete the project and more so the government has extended the project.
Dheeraj
InCred Equities: But were we not expecting this legacy project to get over before the UP elections?
Management: That was the original plan, but as we have all seen, the fund flow to the project was stopped, and the fund flow has only started from the March after the reaffirmation of funds to the project by the Union Government in the last budget.
Dheeraj
InCred Equities: Okay. And can you just give me a bifurcation like how much of the engineering segment revenue was of this legacy Middle East and these projects, like was it 30%, 40%, 50% so like the severity, can you give that number if possible?
Management: What exact bifurcation you are asking?
Dheeraj
InCred Equities: The percentage of projects in the engineering segment that were related to your legacy projects or your Middle East projects that had an impact on the margins?
Management: The impact of the West Asia crisis on the engineering projects was Rs.60 crores. And the others are in continuation with the same ratio as we had in the last few quarters, both of the legacy project as well as the UP project. That pace has remained consistent over the last couple of years.
Dheeraj
InCred Equities: Okay, sir. Thank you so much.
Moderator: As there are no further questions from the participants, I would like to hand the conference over to the management for closing remarks. Thank you and over to you team.
Management: Thank you all for participating in this earning conference call. I hope you have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our investor relations managers at Valorem Advisors. Thank you and have a good day.
Page 18 of 19
Page 19 of 19
Moderator:
Thank you, ma'am. Ladies and gentlemen, on behalf of Ion Exchange (India) Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.