ION Exchange

Ion Exchange reported a Q4 FY26 operating income of INR 863.3 crores, marking a 3% year-on-year increase. However, EBITDA for the quarter stood at INR 19.9 crores, resulting in a 2.31% margin, with net profit at INR 24.3 crores (2.81% PAT margin). For the full financial year 2026, the company's operating income grew 7% year-on-year to INR 2,914.8 crores. Despite this revenue growth, FY26 EBITDA declined 29% year-on-year to INR 210.2 crores, leading to a compressed EBITDA margin of 7.21%, and net profit was INR 143.2 crores (4.91% PAT margin).

The Engineering segment's Q4 FY26 revenue was flat year-on-year at INR 553.9 crores, with an EBIT of INR 21.5 crores. The segment's order book as of March 31, 2026, was robust at INR 2,643.3 crores, providing healthy revenue visibility. However, the segment faced headwinds in Q4, with approximately INR 60 crores in high-value export shipments to GCC geographies deferred due to disruptions from the West Asia crisis, impacting both revenue and margins.

The Chemical segment recorded Q4 FY26 revenue of INR 229.7 crores, a 3% year-on-year increase, with EBIT at INR 33.4 crores. Profitability was impacted by rising input costs and expenses related to the new Roha facility. The Roha plant, with a 42,600 cubic meter capacity, is fully commissioned, and has obtained Water Quality Association (WQA) certification, which is crucial for accessing international markets, particularly for the US drinking water segment. Management aims for 25% capacity utilization in the plant's first full year of operation (FY27).

The Consumer Product Division demonstrated strong growth in Q4 FY26, with revenue increasing by 34% year-on-year to INR 104.7 crores. Despite this growth, the segment reported a loss of INR 4.6 crores for the quarter, an improvement from a loss of INR 5.2 crores in the prior year period. The company continues to invest in this business to build a scalable revenue platform and aims to achieve at least break-even or a modest low single-digit profit in the future.

Ion Exchange has strengthened its technology offerings and international presence. A significant partnership was formed with MANN+HUMMEL for technology transfer and manufacturing collaboration of ultra-filtration membranes and membrane bioreactor technology. Internationally, the 20-year DBOOT contract valued at OMR 73.46 million in Oman is progressing, and a new USD 18.1 million water treatment project joint venture has been established in Malawi. The 2023 acquisition of MAPRIL continues to provide a strategic foothold in the Iberian Peninsula, expanding the company's European market reach.

For FY27, the company has earmarked INR 30-40 crores for maintenance and routine CAPEX. The Oman project, with an estimated CAPEX of USD 40 million over the next two years, will be funded through a mix of debt and equity, with the company's 51% joint venture contributing from internal accruals. The company's gross debt currently stands at INR 384 crores, with no major CAPEX plans beyond routine maintenance unless for plant expansion, which would be communicated later.

The Sri Lanka project is on track for completion by the end of Q2 FY27. The UP Jal Jeevan Mission Project, a legacy project, still has about 30% of its scope pending, with execution pace remaining slow and dependent on fund inflows. While funds have started flowing post-government reaffirmation, the project's completion is now expected to extend beyond FY27. This project, along with other legacy issues and the West Asia crisis, contributed to margin pressures in the engineering segment.