Ion Exchange India Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A. INDUSTRY STRUCTURE AND DEVELOPMENT

Overview:

Ion Exchange is one of the few companies globally with the capability to deliver end-to-end water and environmental management solutions across the entire water cycle. With over six decades of expertise, the Company serves industrial, institutional, municipal and residential customers through a comprehensive and integrated portfolio that spans every stage of water and wastewater management—from source water treatment and process water systems to ultrapure water, wastewater treatment, recycling, reuse, resource recovery and environmental solutions.

What distinguishes Ion Exchange is its ability to provide a single-point solution for customers complete water and environment management requirements. The Company combines advanced technologies, engineered systems, products, consumables, digital solutions and lifecycle services under one umbrella, enabling customers to optimize water usage, improve operational efficiency, ensure regulatory compliance and achieve their sustainability objectives.

Its diversified portfolio encompasses ion-exchange resins, membranes, specialty chemicals, engineering and EPC solutions, wastewater recycling and Zero Liquid Discharge (ZLD) systems, automation, digital monitoring platforms and 24x7 operations and maintenance services. This unique combination allows Ion Exchange to support customers throughout the entire lifecycle of their assets—from design and manufacturing to installation, operation, optimization and long-term performance enhancement.

Further strengthening its value proposition, the Company leverages digital technologies including AI, IoT-enabled monitoring, remote diagnostics and predictive analytics to improve plant reliability, maximize resource recovery and deliver superior lifecycle value. Supported by strong R&D capabilities, a robust manufacturing footprint and a widespread service network, Ion Exchange is uniquely positioned to address the evolving water, wastewater and environmental management needs of industries, municipalities, institutions and communities.

As water security, resource efficiency and environmental stewardship become increasingly critical worldwide, Ion Exchanges integrated "One Partner for Complete Water and Environmental Solutions" approach positions it as a trusted partner in helping customers build sustainable, resilient and future-ready operations.

Global landscape:

Over the past year, the world has witnessed one of the most significant shifts in the global landscape in recent decades. Geopolitical realignments, evolving trade relationships, regional conflicts, supply chain restructuring and increasing focus on economic selfreliance have fundamentally altered the way nations and businesses approach growth, investment and resource security. While global economic activity has remained resilient, uncertainty has become a defining characteristic of the operating environment.

Amid these changes, one theme has become increasingly clear: sustainability is no longer a conversation, a corporate aspiration or a compliance requirement—it has become a strategic necessity for long-term economic and societal survival. Increasingly, the ability of nations to secure critical resources, manage environmental impacts and build resilient infrastructure is becoming a measure of competitiveness and progress. In many ways, sustainability is emerging as a key performance indicator not just for corporations, but for nations themselves.

Water lies at the heart of this transformation. As populations grow, cities expand, industries evolve and climate challenges intensify, access to sustainable water resources is becoming one of the defining challenges of our time. Across the world, governments, industries and communities are recognizing that water security is inseparable from economic growth, public health, food security, energy transition and environmental stewardship.

Consequently, we continue to see strong investment momentum across water and environmental infrastructure. Advanced water treatment, wastewater recycling, desalination, resource recovery and water reuse solutions are increasingly being viewed not only as environmental investments but as strategic enablers of industrial growth and national resilience. Regulatory frameworks are becoming more stringent, while customers are setting increasingly ambitious sustainability goals, accelerating the adoption of innovative water management technologies.

At the same time, the emergence of new growth sectors—including semiconductors, electronics, pharmaceuticals, biotechnology, battery manufacturing, green hydrogen, renewable energy and data centres is reshaping the demand landscape. These industries are highly dependent on reliable supplies of process water and ultrapure water, creating significant opportunities for advanced treatment, recycling and resource optimization solutions.

Technology is also transforming the industry at an unprecedented pace. The integration of Artificial Intelligence (AI), Internet of Things (IoT), automation, digital twins and predictive analytics is enabling smarter and more efficient management of water assets. These capabilities are helping organizations improve operational performance, optimize resource consumption and enhance the resilience of critical infrastructure.

Another defining trend is the growing focus on climate resilience. Regions experiencing water stress are increasingly investing in desalination, water reuse, decentralized treatment systems and circular water management approaches. Around the world, the emphasis is shifting from simply treating water to maximizing the value of every drop through recovery, reuse and resource optimization.

Looking ahead, I remain highly optimistic about the long-term outlook for the global water and environmental management sector. While economic cycles and geopolitical developments will continue to influence short-term market dynamics, the structural drivers underpinning our industry remain stronger than ever. Water security, sustainability, climate adaptation and resource efficiency are no longer optional priorities— they are fundamental requirements for future growth and prosperity.

Industry forecasts continue to project healthy long-term growth across water and wastewater treatment, water reuse, desalination, digital water solutions and resource recovery segments. More importantly, the strategic importance of the sector continues to increase. In a world where resilience, sustainability and responsible resource management are becoming central to national agendas, the water industry is uniquely positioned to play a critical role in shaping a more sustainable future.

At Ion Exchange, we believe this presents not only a significant business opportunity but also a profound responsibility. Our purpose extends beyond providing water and environmental solutions—we are committed to helping industries, communities and nations secure one of their most vital resources and build a more sustainable future for generations to come.

Key trends:

From my perspective, the water industry is undergoing a fundamental transformation. What was once viewed primarily as a utility function is increasingly becoming a strategic enabler of industrial growth, sustainability and resource security. As customers navigate rising environmental expectations, resource constraints and operational challenges, several key trends are reshaping the future of the sector.

1. Water Reuse and Circular Water Management Becoming the New Normal

Industries across the world are moving beyond conventional treatment approaches toward closed-loop water management systems. Water reuse, resource recovery and Zero Liquid Discharge (ZLD) are increasingly becoming integral components of industrial design, particularly in water-intensive and highly regulated sectors. The focus is shifting from water consumption to water optimization, reflecting a broader transition toward circular economy principles.

2. From Monitoring to Intelligent Water Management

The industry is rapidly evolving from data collection to data-driven decision-making. Artificial Intelligence (AI), IoT, advanced analytics and automation are enabling water systems to operate as intelligent platforms that continuously optimize chemical dosing, energy consumption, asset performance and maintenance schedules. The future of water management will be defined not by how much data is collected, but by how effectively it is converted into operational insights and measurable outcomes.

3. High-Purity Water Demand Driven by Advanced Manufacturing

The global expansion of semiconductor fabrication, electronics manufacturing, biotechnology, pharmaceuticals, battery production, green hydrogen and advanced energy systems is creating unprecedented demand for high-purity and ultrapure water solutions. As nations invest in strategic manufacturing capabilities and supply-chain resilience, water infrastructure is becoming a critical enabler of these high-growth industries.

4. Rise of Flexible and Decentralized Water Infrastructure

Customers are increasingly seeking solutions that can be deployed rapidly, scaled efficiently and adapted to changing operational requirements. This is driving growing adoption of modular and containerized water treatment systems, particularly in water-stressed regions, remote locations and rapidly expanding industrial facilities. While large centralized systems will continue to play a critical role in municipal infrastructure, decentralized solutions are becoming an important part of the industrys growth story.

5. Sustainability Metrics Influencing Investment Decisions

Sustainability is no longer evaluated through commitments alone—it is increasingly measured through outcomes. Procurement decisions, financing access and investment priorities are becoming closely linked to measurable ESG performance, water-use efficiency, carbon reduction and lifecycle transparency. Increasingly, sustainability is becoming a key indicator of both corporate performance and national competitiveness, driving organizations to invest in technologies that deliver quantifiable environmental benefits.

6. Transition Toward Lifecycle and Service- Based Models

Customers are placing greater emphasis on longterm performance, reliability and operational outcomes rather than standalone equipment purchases. As a result, the industry is witnessing a gradual shift toward Operations & Maintenance (O&M) contracts, Water-as-a-Service models, performance-based agreements and subscription-driven digital monitoring solutions. While Engineering, Procurement and Construction (EPC) projects will continue to remain significant, particularly in large infrastructure developments, recurring service- led engagement models are becoming increasingly important.

Looking Ahead

Taken together, these trends point toward a future where water management is more integrated, intelligent and sustainability-driven than ever before. As water security becomes a strategic priority for industries and nations alike, organizations that can combine technology, digital innovation, lifecycle services and sustainability outcomes will be best positioned to create long-term value. The industry is no longer simply focused on treating water—it is increasingly focused on maximizing the value of every drop.

Strategic Implications for Ion Exchange:

As the global water and environmental management industry evolves, Ion Exchange remains focused on strengthening its position as a leading provider of integrated water and environmental solutions. Our strategy is aligned with the long-term trends shaping the industry—water security, sustainability, digitalization, resource efficiency and industrial transformation. By leveraging our unique end-to-end capabilities, we are focused on creating sustainable value for customers, stakeholders and communities while driving profitable growth across domestic and international markets.

1. Strengthen Technology Leadership Across the Water Value Chain

We will continue to enhance our portfolio of ion- exchange resins, membranes and specialty chemicals, with a strong focus on developing high-performance, energy-efficient and environmentally responsible solutions. Continuous investment in innovation and R&D will enable us to address emerging customer requirements across industrial, municipal and infrastructure applications.

2. Capitalize on High-Growth Industry Opportunities

As investments accelerate across semiconductors, electronics, pharmaceuticals, biotechnology, data centres, clean energy, battery manufacturing and advanced manufacturing sectors, we are strengthening our capabilities to deliver application-specific water, wastewater and high-purity water solutions. These sectors represent some of the most attractive growth opportunities for the next generation of water technologies.

3. Deepen Our Differentiation as an End-to-End Water Partner

One of Ion Exchanges key strengths is its ability to serve customers across the entire water cycle. We will continue to strengthen our integrated business model by combining engineering solutions, treatment technologies, resins, membranes, specialty chemicals, automation and lifecycle services to deliver comprehensive water and wastewater management outcomes through a single trusted partner.

4. Accelerate Digital Transformation and Smart Water Solutions

Digitalization is becoming increasingly central to efficient water management. We are expanding the deployment of IoT-enabled platforms, AI- driven monitoring systems, advanced analytics and integrated digital infrastructure to enable real-time performance optimization, predictive maintenance and enhanced customer experience. These capabilities help customers improve reliability, reduce operating costs and maximize asset performance.

5. Expand Global Footprint Through an India- Led Growth Model

As global supply chains continue to evolve, India is increasingly emerging as a preferred hub for engineering, manufacturing and innovation. We are leveraging our strong domestic foundation to expand our international presence, with particular focus on high-growth markets across Southeast Asia, the Middle East and Africa, Europe and USA while positioning India as a global centre for sourcing, technology development and project execution.

6. Drive Operational Excellence and Future- Ready Capabilities

To support long-term growth, we continue to invest in manufacturing capacity, supply chain resilience, research and development, digital capabilities and talent development. These investments are aimed at enhancing scalability, improving competitiveness and reinforcing our position as a technology-driven leader in water and environmental solutions.

7. Expand Lifecycle Services and Recurring Revenue Streams

Customers increasingly seek long-term partners capable of delivering sustained performance throughout the lifecycle of their assets. We are therefore strengthening our comprehensive 24x7 service platform, including Operations & Maintenance (O&M), performance optimization, upgrades, consumables, spares management and technical support. This not only enhances customer value and retention but also supports the growth of recurring and service-led revenue streams.

8. Advance Sustainability and Circular Water Management

Sustainability remains central to our growth strategy. We are helping customers reduce freshwater consumption, improve resource efficiency and achieve their environmental objectives through water reuse, recycling, resource recovery and Zero Liquid Discharge (ZLD) solutions. As sustainability increasingly becomes a key measure of industrial and national progress, Ion Exchange is committed to enabling a more circular, resilient and water-secure future.

Looking Ahead

The increasing importance of water security, environmental stewardship and sustainable industrial growth presents a significant opportunity for Ion Exchange. With our integrated portfolio, technology leadership, manufacturing capabilities and service excellence, we are uniquely positioned to support customers across the complete water lifecycle. Our strategic focus remains clear: to strengthen our leadership as a trusted partner for end-to-end water and environmental solutions while creating long-term value through innovation, sustainability and operational excellence.

B. HIGHLIGHTS OF PERFORMANCE

Standalone

• Total Income: INR 2,774 crores

• EBITDA: INR 279 crores

• EBITDA Margin: 10%

• Net Profit After Tax: INR 138 crores

• PAT Margin: 5%

• Diluted EPS: 11.257 (Face value INR 1 each)

Consolidated

• Total Income: INR 3,001 crores

• EBITDA: INR 297 crores

• EBITDA Margin: 9.9%

• Net Profit After Tax: INR 143 crores

• PAT Margin: 4.8%

• Diluted EPS: 12.034 (Face value INR 1 each)

C. SEGMENT WISE OPERATIONAL PERFORMANCE

The business of your Company can be segmented into:

1. Engineering

2. Chemicals

3. Consumer Products Engineering

The Engineering Business delivered a strong performance during the year, supported by healthy order bank and sustained opportunities across key growth sectors. The Company secured several significant orders from the solar sector, reinforcing its execution capabilities, technical expertise and growing presence in renewable energy infrastructure. With investments in clean energy continuing to gain momentum in India and international markets, the business remains well-positioned to expand its participation in this segment.

The Company also increased its focus on emerging sectors such as semiconductors and data centres, where substantial investments are expected over the coming years. These sectors demand high standards of engineering precision, utility integration and reliable project execution — capabilities that the Company has developed over decades of experience. The combination of a robust solar order pipeline and focused business development initiatives across high-growth industries is expected to support the long-term growth trajectory of the Engineering Business.

On a standalone basis, the Engineering segment achieved an external turnover of INR 1,630 crores as compared with INR 1,599 crores in the previous year. Profit from Engineering operations stood at INR 92 crores.

During the year, the Company made significant progress on its desalination projects in North Africa and is now in the final stages of handing over the plants. The project scope also included the design, commissioning and supply of a 240 MLD SWRO skid. These projects further enhanced the Companys credentials in large-scale desalination and expanded its presence in the MENA region. EPC projects being executed for reputed international contractors such as Tecnicas Reunidas,

Saipem, NPCC and Tecnimont also progressed well during the year, reinforcing the Companys ability to execute complex assignments for the global oil and gas sector while adhering to stringent quality and delivery requirements.

On the domestic front, projects with Indian Oil Corporation Limited progressed towards commissioning, while execution momentum remained steady across municipal and industrial assignments, including projects under the Government of Indias Har Ghar Jal Mission. The Sri Lanka infrastructure project also moved towards closure during the year, with major systems successfully handed over and stabilised.

Operational efficiency was further enhanced through earlier capacity expansions at Goa and Hosur and the integration of the Wada facility, supporting improved throughput, timely deliveries and enhanced competitiveness. The successful implementation of the SAP enterprise platform across the Engineering Business marked a significant milestone in the Companys digital transformation journey, enabling greater standardisation, real-time visibility, stronger process controls and improved coordination across key business functions.

Membrane

The Membrane Division recorded strong growth during the year through expansion into new markets and increased market share across refinery, fertiliser and steel sectors. The Division secured significant orders from leading customers and further reinforced its position in the water treatment market through its portfolio of ultrafiltration (UF), nanofiltration (NF), reverse osmosis (RO) and membrane bioreactor (MBR) solutions.

During the year, the Division achieved a major milestone through a strategic technology transfer agreement with Mann+Hummel, enhancing its ultrafiltration manufacturing capabilities and strengthening its technological advantage in PVDF UF and MBR membrane production. Phase II expansion of the Goa membrane manufacturing facility is currently under implementation and is expected to significantly enhance production capacity to address growing domestic and international demand.

The Division also advanced its sustainability initiatives through the installation and commissioning of a 350 kWp rooftop solar power project, which is expected to reduce approximately 265 tonnes of CO₂ emissions annually. This initiative complements the Divisions continued focus on energy efficiency, fuel optimisation and water conservation measures.

Chemical Segment

The Chemical Segment recorded marginal growth in sales volumes during the year, with export volumes also increasing modestly despite challenging market conditions. Margins remained under pressure due to elevated raw material costs and intense competition across domestic and international markets. The business continued to focus on operational efficiency, product optimisation and strengthening customer relationships across key industrial sectors. During the year, the Company successfully tested its range of Green Chemistry products at various customer sites, reinforcing its position as a provider of environmentally sustainable and value-added solutions.

The Resins business delivered encouraging performance during the year, supported by continued innovation, expanding application opportunities and growing acceptance of sustainable resin technologies. Pharma resin products recorded significant growth, while the Company further strengthened its product portfolio through the development of new ion exchange resins to address evolving customer and industry requirements. A key milestone during the year was the commissioning of both cation and anion resin production at the Companys greenfield resin manufacturing facility at Roha.

The facility incorporates advanced non-solvent manufacturing technologies, supporting the Companys Green Chemistry initiatives and enabling the production of solvent-free ion exchange resins. Market acceptance of these products has been encouraging, reinforcing the Companys reputation as a provider of innovative and environmentally responsible solutions.

Sustainability and operational excellence remained key focus areas across the segment. The Company implemented process improvements to enhance pharmaceutical resin manufacturing capabilities, including capacity enhancement initiatives approved by regulatory authorities. The Roha facility has been designed with a strong emphasis on resource efficiency, featuring one of the lowest per-capita water consumption levels among ion exchange resin manufacturers and incorporating extensive water recycling systems based on the Companys proprietary environmental engineering expertise. The Companys manufacturing facilities continue to progress towards zero liquid discharge (ZLD), supporting its long-term sustainability objectives.

On a standalone basis, the segment achieved external sales turnover of INR 667.91 crores compared with INR 649.68 crores in the previous year.

Consumer Products

The Consumer Products business delivered a strong performance during the year, driven by product innovation, expanding market reach and continued investments in digital capabilities across its Home Water Solutions, Institutional and Rural businesses.

The Home Water Solutions business recorded robust growth, supported by a strong innovation pipeline and enhanced brand visibility. Several new products were introduced across water purification, water softening, cooling and heat pump categories, strengthening the ZeroB portfolio and addressing evolving consumer needs across residential and commercial segments. The business further expanded its customer reach through integrated omni-channel marketing initiatives, a strengthened e-commerce presence and focused digital engagement. Continued investments in digital platforms for lead management, sales enablement and customer service, together with the launch of IoT-enabled water softeners, enhanced customer experience while reinforcing ZeroBs position as a provider of smart and innovative water solutions.

The Institutional business also recorded strong growth, with order bookings increasing by over 65%, supported by rising demand from commercial, hospitality, community and government sectors. The business strengthened its market presence through an expanded dealer network, improved customer engagement and enhanced sales governance. Continued adoption of innovative solutions such as membrane bioreactor (MBR)-based sewage treatment plants, New Generation STPs, Indion Hemo, Indion? Quencher and Auto Quencher systems reinforced the Companys position in sustainable water and environmental solutions.

The Rural business maintained strong growth momentum during the year, supported by significant order inflows from government and institutional customers for rural and municipal water treatment projects. The business secured several orders for specialised water treatment systems addressing critical water quality challenges across multiple states.

Supported by a diversified product portfolio, continued innovation, expanding market presence and a strong order pipeline, the Consumer Products business remains well positioned to sustain its growth momentum while strengthening its contribution to the Companys integrated water solutions portfolio.

Exports

Ion Exchange enters its international growth phase from a position of strength. Your Company currently exports to over 60 countries, with exports contributing to a quarter of the Companys turnover. Ion Exchange is now poised to convert the current substantial export base into a larger share of your Companys revenues driven by new manufacturing capacity and geographical expansion.

The growth plan for the international business is driven by expanded manufacturing capacity of Ion Exchange resins at Roha, the significant expansion of the membrane product line and manufacturing at Goa as well as manufacturing and blending units in Saudi Arabia and the UAE. These manufacturing expansions are expected to drive significant revenue growth from global markets especially from North America and Europe for Ion Exchange resin. The membrane factory expansion will enable the Company to offer a full range of membrane products across our subsidiaries through our expanding distribution network in southeast Asia and West Asia.

Your Companys significant presence in the project business in the middle east and North Africa region is expected to be a key pillar for growth in the region with growth opportunities for desalination and wastewater treatment in the GCC region with water scarcity and innovative technologies for water recovery fueling growth. This is supported by Ion Exchanges manufacturing base in the UAE with an In Country Value (ICV) certified unit allowing us to participate in local projects as a local player.

Our strong presence in the APAC region built over the last 3 decades is now strengthened with a new regional push to focus on recurring chemicals and products business beyond engineering projects. Team development in existing countries of Thailand, Indonesia, Sri Lanka and Bangladesh as well as expansions into Philippines and Vietnam are expected to drive this growth.

The Company also expects to accelerate its digital transformation by adopting AI and advanced technologies to not only enhance customer experience and manage partnerships but also to offer products and services that use advanced digital tools to improve plant performance, reduce downtime, and manage customer facilities and utilities effectively.

Digital Initiatives

During FY 2025-26, the Company continued to advance its digital transformation journey and enhance customer engagement capabilities through investments in Artificial Intelligence (AI), cloud technologies, automation and intelligent digital platforms. The successful implementation of the HubSpot platform enabled seamless integration of marketing, sales and customer engagement processes, enhancing lead tracking, nurturing and conversion through an efficient lead-to- order management framework.

Focused digital campaigns across membranes, resins, chemicals, SSD and IoT solutions contributed to consistent growth in product-specific leads and improved customer acquisition across domestic and international markets. Enhanced website traffic, stronger social media engagement and AI-enabled content optimisation further improved the Companys global digital presence and brand visibility.

The Company also expanded its digital water intelligence portfolio through the deployment of its in-house developed Asset Health & Performance Monitoring (APM) platform, leveraging AI and Digital Twin technologies for real-time monitoring of water and effluent treatment plants. Following successful proof-of- concept evaluations, the platform was deployed across select projects and O&M sites, supporting operational efficiency, predictive maintenance and sustainability objectives.

Additional digital solutions introduced during the year included Smart Water Balance, Network Flow Intelligence, Leak Detection and Water Network Performance & Usage Optimisation systems. The Company also advanced its Generative AI-led Digital Thread initiative to enhance engineering, knowledge management and commercial operations through conversational AI tools, automated engineering calculations, and improved CRM and CPQ capabilities.

These initiatives collectively enhanced operational efficiency, customer responsiveness, internal productivity and real-time plant visibility, while supporting the Companys long-term digital-led growth strategy.

D. RISKS, THREATS, CONCERNS AND RISK MITIGATION

Risk pre-emption associated with a robust risk mitigation strategy has been a priority on the managements agenda. A comprehensive risk management framework that identifies, assesses and reports the risks arising out of internal as well as external factors, also includes a mitigation plan to eliminate/minimize the impact of these risks. The framework adopted by your Company also covers continuous monitoring of Cyber Security Risks and a robust mitigation plan encompassing a business continuity plan is in place in the event of this risk being materialized. The multi-layered risk management framework adopted is aimed at achieving the strategic objectives of increasing market share, optimal utilization of assets to increase productivity, comprehensive financial reporting and compliance to regulatory and social obligations.

For the Global economy, the year 2025 has been fluid and volatile, with much of the dynamics driven by a reordering of policy priorities in the United States and the adaptation of policies in the other economies to new realities. Since April 25, the Global Economic outlook was volatile with the unfolding of the details of newly introduced policy measures resulting from substantial tariff increase by the US in the month of February 25. In view of the trade policy shifts by many economies and the surge in uncertainty on account of substantial cuts to International Monetary aids and new immigration laws introduced by many countries, the Global growth projections, for 2025, were revised downwards from 3.3% to 2.8%.

The worlds economies, institutions and markets have been adjusting to a landscape marked by greater protectionism and fragmentation, with dim medium-term growth prospects and calling for recalibration of macroeconomic policies. By July 25, the announcements that lowered the tariffs from the April highs prompted modest upward revision to 3%. Overall no impact was felt on the Inflation projections with increase in projection for US and decrease for other economies. Incoming data for the 1st half of 2025, reflected subdued inflation for Asian countries and steady figures for US. The data also depicted resilience towards the tariff and immigration laws shocks in the 1st half which was largely attributable to temporary factors like front-loading of trade, investment and inventories.

By March 26, global economy was again threatened with the outbreak of war in the Middle east. The global outlook has abruptly darkened following the outbreak of war in the Middle East on February 28, 2026. The closure of the Strait of Hormuz and serious damage to critical production facilities in a region central to global hydrocarbon supply could cause an energy crisis on an unprecedented scale. The headwinds, over past one year, on account of higher trade barriers and elevated uncertainty was offset by the tailwinds from technology related investments, accommodative financial conditions including weaker dollar and fiscal and monetary policy support. The Middle east conflict is a significant counterforce to these tailwinds with its impact on commodity market, inflation expectations and financial conditions. While the growth and inflation revisions are relatively modest at the global level, the impact on the economies in the conflict areas as well as more vulnerable regions and more specifically in the commodity importing emerging markets and developing economies with their pre-existing fragilities is much more pronounced.

Though, on the Global front, India included, the year 2025 began with one set of expectations and ended with another, Indias strong macroeconomic performance was one of the notable continuity. Growth was strong in the first quarter and continued to improve in the subsequent two quarters. The central bank cut interest rates aggressively and loosened liquidity conditions. The government announced significant tax breaks for households in the budget for fiscal year 2026 (FY26) in February. For FY25, Fiscal deficit of 4.8% of gDp, against the budgeted 4.9% was achieved and for FY26 target of 4.4% was announced. In April 25, when the President of the United States announced reciprocal tariffs of 25% on Indian products and services, India was expected to strike an early agreement with the US administration and lower them.

However, an additional penal tariff of 25% on most of Indias merchandise exports to the United States was announced which spiraled in India revising the growth forecast downwards. But in reality, growth accelerated due to a slew of structural reforms and policy measures. Further, by the end of March 26, the geo-political conditions on global arena compelled the World Bank has lowered its global growth forecast for 2026 to 2.5%, citing the economic fallout from the ongoing West Asia crisis, rising energy cost and heightened uncertainty across markets. Despite the growing global challenges, World Bank expects Indias GDP to grow 6.6% in fiscal year 202627, following an estimated 7% growth in 2025. Further, it projected the estimated growth of 7.2% in 2027 and 7.0 in 2028.

During 2025-26, your Company continued its assessment of impact of its long term and short term engagements with the geographies of interests. For Engineering segment, on the upside, the Sri Lankan contract closure is progressing on track, and is expected to completed in FY 2026-27. On the downside, Planned dispatches of high value Engineering contracts to the GCC geographies got impacted due to the West Asia crisis. However, with the adjustment to cost and realignment of logistic routes in wake of the crisis, clearances from the customer to proceed with the execution were received by the 1st Quarter of FY 2026

27. Order inflow/backlog was impacted by delayed finalizations of some large-value opportunity. On the Chemical segment front, export shipments during March 2026, were impacted by logistics disruptions arising from the West Asia crisis. The margins for the quarter were impacted due to input cost pressures. The performance and the margins for the 4th quarter were affected on account of these factors. Even with this kind of Headwind and tailwind, impact, your company has strategize to expand presence in overseas geographies with focused attention on its product business.

The performance under Jal Jivan Nigam remained muted on account of non-release of funds from the Water Boards, however, IOCL Panipat Refinery, Raw Water Treatment Plant, one of the largest water treatment package awarded in India was successfully commissioned. In the Chemical segment, Turnover showed sequential and year-on-year improvement across all quarters but Margins, though, maintained overall faced quarter-specific pressures on account of Product mix, Input cost pressures, rising and volatile logistic cost and Roha facility costs. As a mitigating strategy, your Company is passing cost increases to customers to rationalize the margin impact.

Your Companys star performer was the Home Water Segment which continues to record consistent volume growth across all quarters and maintain leadership in softener segment by expanding market share in other segments via focused, aggressive marketing strategies. Your Company has entered into strategic partnerships and such associations are aimed at reducing import dependence, enhances cost efficiency and competitiveness

For large EPC jobs selection, your Company continues to be cautious and decisions are taken objectively; basis the built-in robust and dynamic risk identification and mitigation framework. Other risk mitigating measures include robust screening mechanism of customers for ensuring business with only credit worthy customers, prime focus on liquidity and positive operational cash flow and a control over discretionary spend. Your Company continues to reassess and realign its strategies in the wake of the changes in market dynamics and business uncertainties brought about by international uncertainties.

E. HUMAN RESOURCES AND TRAINING

During the year, the Human Resources function continued to enhance people processes, employee engagement and capability-building initiatives in alignment with the Companys growth objectives and its commitment to fostering a high-performance, values- driven culture.

To enhance communication and employee engagement, the Company launched Ion Exchange People Connect, an all-employee town hall forum designed to strengthen leadership interaction, transparency and organisational alignment. Talent acquisition efforts remained focused on supporting business expansion.

Employee well-being and engagement remained key priorities through initiatives such as wellness programmes, sports activities, team outings, employee engagement events and financial literacy sessions, fostering a positive and collaborative work environment.

Learning and Development continued to play a pivotal role in building organisational capability, delivering over 16,000 man-hours of training through behavioural, technical and functional learning interventions. A key milestone during the year was the launch of the Learning Management module in Success Factors, branded as ION Exchange Academy, providing employees access to a centralised learning repository and curated content through the Skillsoft platform.

Together, these platforms have enabled self-paced learning and strengthened continuous professional development across the organisation.

Targeted capability-building programmes were conducted across Marketing, Sales, Project Management, Technology and Human Resources functions to enhance effectiveness and address evolving business requirements. The Company also launched the BITS:ION Work Integrated Learning Programme in collaboration with the Birla Institute of Technology and Science, Pilani, enabling employees to pursue B.Tech and M.Tech programmes while continuing their professional responsibilities.

Additionally, the Gyaansagar knowledge-sharing initiative continued to promote cross-functional learning, collaboration and knowledge exchange, further strengthening the organisations learning culture and supporting long-term employee growth.

F. INTERNAL CONTROLS

Your Company maintains a robust internal control framework to ensure that there is reasonable assurance with respect to all information within the business and for that which is available for external publication is correct and adequate. The existing governance and policy framework implemented by your Company provides reasonable assurance of the efficacy of the internal control operating within the Company.

The Company has a well-qualified Internal Audit Department. The internal audits are planned from risk perspective. In preparing the Annual Audit Plan, reference is made to past audit experience, current economic and business environment, the groups risk matrix, directives from senior management and audit committee members. Major observations are periodically highlighted to the audit committee members, corrective steps are taken and are also reviewed by the statutory auditors.

G. SOCIAL RESPONSIBILITY INITIATIVES

During FY 2025-26, the Ion Foundation continued to deepen its commitment to creating sustainable and inclusive social impact through focused interventions across education, healthcare, skill development, rural development, water and environmental sustainability. The Foundations initiatives were implemented across communities surrounding the Companys manufacturing locations, offices and operational areas, with an emphasis on addressing local needs while contributing to broader developmental priorities.

Education remained a key focus area, accounting for the largest share of CSR initiatives undertaken during the year. The Foundation supported school infrastructure development, scholarships for higher education and vocational training programmes aimed at improving access to quality education and enhancing future opportunities for students. Particular emphasis was placed on equipping youth with industry-relevant skills through structured training and employability initiatives, helping create pathways towards sustainable livelihoods and economic empowerment.

In healthcare, the Foundation continued its efforts to improve access to preventive and primary healthcare services for underserved communities. Through collaborations with hospitals and healthcare institutions, support was extended towards strengthening medical infrastructure and facilitating access to treatment.

Community-based programmes focused on health awareness and basic healthcare services further contributed to improving overall well-being and healthcare accessibility.

Recognising the importance of essential infrastructure and environmental stewardship, the Foundation implemented projects focused on access to safe drinking water, rural development and environmental sustainability.

These initiatives supported community institutions and villages through improved infrastructure, while environmental programmes encouraged sustainable practices and ecological conservation. Rural development initiatives also contributed towards enhancing quality of life and building long-term community resilience.

All initiatives were implemented through partnerships with credible organisations and effective utilisation of CSR resources, ensuring meaningful outcomes and wider community reach. During the year, the Foundation successfully delivered over 50 projects across diverse focus areas, creating measurable social impact while aligning with national development priorities and the United Nations Sustainable Development Goals (SDGs). Through these efforts, the Ion Foundation continues to advance its vision of inclusive growth, community well-being and sustainable development.

	On behalf of the Board of Directors
	Sd/-
	Rajesh Sharma
	Executive Chairman
Mumbai, 5th August, 2026