iifl-logo

Ion Exchange (India) Ltd Management Discussions

431.9
(-3.69%)
Aug 26, 2025|12:00:00 AM

Ion Exchange (India) Ltd Share Price Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENT

Overview:

Ion Exchanges strategy is driven by its vision to conserve the planets most precious resources through total water and environment management solutions. For the last 61 years the Company has been providing state-of-the-art sustainable technologies and solutions for managing liquid, solid and gaseous waste generated by industries, institutions, homes and communities - both urban and rural.

To meet the rising demand for water and to conserve natural resources, it is imperative that the water and environment sector expands scientific knowledge and technology applications to change the way water and waste is managed and reused by applying the concept of Circular Economy and advance AI/IoT enabled digital solutions for meeting human, economic and environmental needs.

Global Landscape:

Several megatrends such as urbanization, agriculture and industrialization, human activities have multiplied demands for water consumption. Further, excess pollution and rampant misuse of water and extreme weather conditions (droughts, floods) due to climate change has put the very limited water resource in danger.

The global water and wastewater market is projected to grow at a CAGR of 5.4%, reaching USD1.05 trillion by 2030, driven by increasing water demand from agriculture, industry and domestic consumption. Indias water sector is also growing at a CAGR of 8-10%, supported by strong policy intervention and rising urban, rural and industrial needs.

Key Trends:

The Industry is witnessing following key trends against sustained demand from end-users:

• Increasing focus on reuse, resource recoveryand net zero wastewater discharge.

• Customers shift towards integrated offerings- spanning equipment, chemicals, resins and services.

• Demand for smart plant operations, predictive analytics and remote performance dashboards for improving water monitoring and efficiency resulting in lower usage of energy and chemicals.

Strategic Implications for Ion Exchange:

The convergence of policy, technology and environmental urgency is opening up opportunities across every vertical of the water and environment value chain. Ion Exchange remains committed to addressing these opportunities with innovation, execution excellence and sustainability leadership. Its strategic initiatives to meet global demand from its customers and global trends. This includes:

• Strengthening its resin and specialty chemical portfolio with high-performance and environment- friendly alternatives;

• Expanding urban and rural municipal water projects through turnkey and PPP-based delivery models;

• Enhancing customer experience with IoT-driven platforms, SAP-enabled back-end and modular offerings for customer services and

• Scaling international operations with India as a sourcing and innovation hub for emerging and developed markets.

B. HIGHLIGHTS OF PERFORMANCE:

Standalone

• Total Income: INR 2591 crores registering a

growth of 16.3% annually

• EBITDA: INR 336 crores

• EBITDA Margin: 13%

• Net Profit After Tax: INR 214 crores

• PAT Margin: 8.3%

• Diluted EPS: INR 17.447 (Face value INR 1 each)

Consolidated

• Total Income: INR 2786 crores registering a

growth of 16.5% annually

• EBITDA: INR 342 crores registering a growth of 8.2% annually

• EBITDA Margin: 12.3%

• Net Profit After Tax: NR 208 crores

• PAT Margin: 7.5%

• Diluted EPS: INR 17.530 (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 continues to be a key driver of Ion Exchanges global growth strategy, reinforcing its reputation for delivering complex, high-impact water and environmental infrastructure solutions.

FY 2024-25 was a landmark year, marked by several prestigious order wins from leading domestic and international clients across diverse sectors including Power, Steel, Oil & Gas, Fertilizers, Solar, Food & Beverages, among others.

A major highlight was the successful commissioning of one of the largest desalination plants in North Africa, with a capacity of 40 MLD. Additionally, the company is in the advanced stages of executing two more large- scale projects in the region - 60 MLD and 40 MLD desalination facilities- further cementing its presence in the MENA region. Despite external challenges, the Sri Lanka Project achieved substantial completion, with all major infrastructure handed over for beneficial use. These achievements demonstrate our capabilities in executing turnkey Engineering, Procurement & Construction (EPC) projects that meet stringent global standards across both Industrial and Municipal segments.

On the domestic front, the UP Jal Nigam project progressed steadily, supporting the Government of Indias Har Ghar Jal Mission by facilitating access to safe drinking water for thousands of households.

The companys prior capacity expansions - including enhancements to its engineered products and fabrication units in Goa and Hosur and the strategic amalgamation of Global Composites at Wada, have ensured readiness to meet growing demand for both standardized and custom-engineered solutions without capacity constraints.

With a growing international footprint, a robust order pipeline and a selective yet strategic approach to domestic projects, the business also maintains a healthy order backlog. Opportunities across sectors such as oil refining, steel, power, chemicals, food & beverages, pharmaceuticals and automotive continue to fuel a strong bidding pipeline.

Backed by strengthened engineering infrastructure, manufacturing capabilities and technical expertise,

Engineering Division is well-positioned to deliver world- class EPC solutions in water, wastewater and waste-to- energy segments globally.

On a standalone basis, the Engineering segment achieved a external turnover of INR 1,599 crores compared to INR 1,351 crores for the previous year. The profit from Engineering Operations stood at INR 113 crores.

Membrane

The Membrane Division achieved notable growth by expanding into new markets and increasing market share, particularly in the refinery, fertilizer and steel sectors, through key orders from the leading companies in these segments. Phase 2 of the Goa membrane factory expansion is underway, aiming to double its production capacity to meet global demands for world- class membrane products that includes widest range of ultrafiltration (UF), nanofiltration (NF), reverse osmosis (RO) and membrane bioreactor (MBR). Consistent with Ion Exchanges commitment to sustainability, the facility implemented several sustainability initiatives like solar panels, efficient lighting fixtures and a fuel shift yielding up to 85% energy savings. Per capita water consumption was reduced by 1.8% and treated effluent was recycled for landscaping.

Chemical Segment

The Chemical Division has continued to demonstrate resilient performance in FY 2024-25, registering steady growth in domestic markets and moderate gains in exports, despite challenging global economic conditions.

Domestic sales remained strong, supported by rising demand across industrial sectors. Export volumes remained muted due to ongoing geopolitical uncertainties and recessionary trends in key global markets such as the US and Europe. The Division maintained its competitiveness and growth by strategically focusing on operational efficiency, raw material cost management and implementation of energy-efficiency and sustainability initiatives at its Chemical manufacturing units.

The company made considerable progress in innovation with the successful field testing of its "Green Chemistry" product range across multiple customer sites. This initiative reflects the companys focus on offering environmentally responsible solutions while addressing market demand. New product development efforts, supported by robust R&D, are underway to diversify further and strengthen the ion exchange resin, specialty chemicals and membrane portfolios.

The Greenfield project for ion exchange resin manufacturing at Roha, Maharashtra is progressing well. The state-of-the-art facility is in the commissioning

phase. Once commissioned, it will significantly enhance production capacity and companys ability to compete on scale in global markets. The chemical manufacturing unit is also designed to meet stringent environmental quality and safety standards.

On a standalone basis, the Chemical Segment recorded an external turnover of INR 650 crores, compared to INR 574 crores in the previous year, with a profit before tax of INR 193 crores.

Consumer Products

The Consumer Products division of Ion Exchange delivered a robust performance in FY 2024-25, marked by strong growth across both Home and Institutional Water Solutions segments. This success was driven by strategic product innovations, expanded digital outreach and a heightened focus on sustainability and government engagement.

ZeroB, the flagship brand, introduced several high- impact products such as the Power Flow RO (with hot and normal water options), UV Lite (a low-cost online water purifier) and an extended range of automatic Sand, Carbon and Iron Filters. These launches strengthened the companys presence in both residential and commercial markets. In the institutional segment, new solutions like Membrane Bioreactor (MBR) technology-based Sewage Treatment Plants (STPs) and the Indion? Quencher further expanded the portfolio. The Auto Quencher, a robotic glass-bottle packaging system aimed at eliminating single-use plastics, was well-received by the hospitality sector.

FY 2024-25 also saw a significant advancement in digital capabilities. ZeroB enhanced its e-commerce footprint through optimized listings on Amazon and Flipkart and a revamped website that drew record traffic. The successful implementation of LeadSquared, a SaaS-based lead management and marketing automation tool, streamlined sales workflows and aligned digital strategies with core business goals. Strategic digital and PR campaigns elevated brand visibility, while engaging content and performance marketing boosted customer acquisition and loyalty.

The expansion into neighboring Nepal marked a significant milestone, setting the stage for wider regional expansion.

The company continues to integrate sustainability into its core operations by promoting community-based STPs, collaborating with NGOs and corporate foundations and executing CSR-led water and sanitation solutions. BARC-approved uranium removal solutions and efforts to address contaminants like iron, fluoride,

arsenic and nitrates underscore the brands focus on providing clean, safe water.

With a strong dealer network, enhanced service-level commitments and an innovation-driven roadmap, the Consumer Products segment is well-positioned for continued growth and impact — both in India and beyond.

On a standalone basis, the Consumer Products Segment achieved a turnover of INR 290 crores, representing a 14% increase over the previous years turnover of IINR 254 crores.

Digital Initiatives

In FY 2024-25, the Company accelerated its digital transformation by adopting advanced technologies, leveraging AI and implementing marketing automation to enhance customer experience and streamline enquiry funnel management. Digital outreach was expanded across domestic and international markets, with focused promotion of concept-based and key product launches.

Conversational marketing was strengthened through AI- powered chatbots and WhatsApp bots, ensuring timely and efficient customer support. Content marketing via blogs, SEO and email campaigns increased organic engagement, while omnichannel campaigns enhanced brand visibility and lead generation.

Targeted product- and industry-specific digital campaigns drove customer inquiries and feedback. Performance and social media marketing initiatives further elevated customer satisfaction and engagement. Collectively, these efforts contributed to incremental sales, strengthened brand presence and broadened the Consumer footprint, significantly improving service delivery and business performance.

To further improve our operational efficiencies, we successfully transitioned towards digitalization of our processes, leveraging,

• One ERP: Centralized ERP into SAP for streamlined processes, faster responses and unified data across functions and geographies.

• Digital Marketing: Implemented a MarTech stack using AI and automation to increase leads, brand visibility and business growth.

• Predictive AI: Piloted deployment of IoT and Edge solutions with cloud monitoring to optimize performance reduce outages and enhance customer experience.

Our company undertook a transformative digital shift, leveraging advanced AI, automation and modern tools to boost efficiency, agility and customer engagement.

D. RISKS, THREATS, CONCERNS & 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

On the Global Front, in April 2024, the global economy was forecasted to grow at a pace of 3.2% in 2024 and 2025. For the advanced economies the growth for 2024 and 2025 was projected at 1.7% and 1.8% with lower than expected growth of 4.2% in 2024 and 2025 in Emerging market and Developing economies . However, ongoing conflicts, geopolitical tensions and potential trade restrictions, as well as climate risks pose significant challenges. Inspite of this, the world economy has shown remarkable resilience. But this stability has been underpinned by continued disinflation, softening commodity prices and monetary easing in many countries. The Global economy is at a critical juncture with substantial policy pivots and uncertainty.

Since February 2025, a series of new tariff measures were announced by the US and effective tariff levels rose to a level unprecedented in the century. The not so predictable decisions by the US led to many countries adopting protectionist measures through trade and financial linkages as well as geopolitical relationships. The new tariff regimes did disproportionately affected the Chinese economy, however, the impact was short lived as the US had to reach reconciliation with the Chinese Government. The Emerging and Developing Asian countries are amongst most affected by the surge of tariff announced by the US.

Global monetary policy has undergone a significant shift in recent months, with major central banks adjusting their strategies in response to evolving economic conditions. Emerging markets have faced challenges due to capital outflows triggered by U.S. monetary policy shifts, tightening financial conditions and slowing growth. Overall, central banks worldwide are navigating a delicate balance between inflation management, economic growth and financial stability, with policy divergence shaping global financial markets.

In 2024, Indian economy continued to expand assuring the world of its status of being an Emerging Economic Powerhouse. With the GDP growth rate of 6.6%, the country retained its position as worlds fifth largest economy. This performance showed Indias consistent trajectory of growth, marked by strategic initiatives and focused economic policies. Indian trade diversification into high-value and technology-driven sectors as well as sustained strength in traditional export industries were the key export drivers. Efforts are focused to position India as a reliable, neutral and trusted trading partner, especially as global players seek to diversify supply chains away from China. Bilateral agreements like the free trade agreement (FTA) with Iceland under the European Free Trade Association(EFTA) and bilateral investment treaty with the United Arab Emirates(UAE) brought the spot light on Indias effort to enhance economic ties in the Euro areas as well as the Gulf regions.

During 2024-25, your Company continued with its reassessment of short-term and long-term impact on the economies of countries of interest. The impact of Russia Ukraine and the Israel Gaza conflicts, though has mellowed down, still has impact on the sourcing cost driven more by the constraints placed by Suez Canal route for cargo movement. Your company could manage the surge in supply chain cost. Europe was impacted due to lower demand resulting in offtake being muted. Your company continued to consolidate its position in the Gulf and the Emerging and Developing countries and the order flow from these areas improved. Your company business in US and the Euro areas remains unaffected even in the wake of tariff war.

Your company continued to build a good order bank of profitable businesses particularly in the Chemical Segment. The order bank growth in the Engineering segment, however, plateaued due to deferment of decisions on Capital Expansion projects by many companies. The risk framework adopted by your company inherently ensures that emerging opportunities are objectively evaluated for the risk appetite they carry and unprofitable or vulnerable opportunities are declined. Your company strived to achieve mix of profitable and relatively stable stream of revenues from the engineering, chemical and home segment. An appropriate mix of large and small business ensured steady stream of revenue by maintaining the quality of its product and services in the domestic and international markets and your company proactively managed supply chain disruptions, competition risks, Foreign Exchange volatility, price sensitive scenarios and Local content requirements.

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 the international uncertainties.

E. HUMAN RESOURCES AND TRAINING

In 2024-25, our Human Resources function continued to play a vital role in driving organizational success by fostering a high-performance culture, attracting top talent and enabling employee growth and engagement. The hiring of Graduate engineer trainees and Management trainees reflected our commitment to building a sustainable talent pipeline. In the year, company expanded its talent pool by hiring a diverse group of experienced professionals across key business functions. These mid- and senior-level hires brought valuable industry expertise, leadership capabilities and fresh perspectives that have strengthened our operational excellence and supported our growth objectives.

We conducted wellness sessions, personal finance management sessions and employee engagement sessions across the organisation. As a part of flexible work arrangements we also introduced work from home facility for all working Saturdays effective January 2025.

We remain committed to building a diverse and inclusive workplace where all individuals feel valued and respected. This year, we launched the AquaNaari a community initiative in partnership with Aspire For Her which aims at providing mentorship, career and returnship opportunities exclusively to women in the water industry.

We recognize that our people are our most valuable asset. Investing in continuous learning and professional development remains a strategic priority, ensuring our workforce is equipped with the skills and knowledge required to thrive in a rapidly evolving business environment. During the year, we delivered over 11300 man-hours of training across the organization, as we conducted various training programs enhancing the behaviourial, technical and functional skills of employees. All these training programs were conducted by our in-house trainers or subject matter experts. This has ensured a culture of continuous learning and ability

to remain agile in the dynamic business environment. In coming year 2025-2026, we aim to further personalize learning pathways thereby empowering every employee to grow, innovate and lead with confidence.

During the year, we successfully launched the implementation of a new Human Resource Management System (HRMS) - SuccessFactors - Aarohan, marking a significant milestone in our journey toward digital HR transformation. The new system will streamline and automate the key HR processes - including recruitment, onboarding, payroll, leave management, performance evaluation and employee self-service - enhancing both efficiency and user experience. This investment reflects our commitment to modernizing our people operations and building a more agile, transparent and connected workplace.

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

Driven by the belief that business success is intertwined with community well-being, we remain committed to addressing critical social, economic and environmental challenges. Our CSR programs focus on education, healthcare, environmental sustainability, clean drinking water conservation, skill development and holistic community upliftment.

Promoting Education:

Over 3,000 educational kits—including uniforms and bags—were distributed to underprivileged children across Indias East, West and South regions, supporting continued learning and school attendance.

Higher Education Sponsorship:

The Ion Foundation extended scholarships to meritorious students pursuing degrees in medicine, engineering and commerce, with support continuing through the course duration. Laptops were also distributed to girls from economically weaker backgrounds to aid digital learning.

Access to Safe Drinking Water:

We installed purification systems in 20 government schools across Rajasthan to address high TDS levels, ensuring safe drinking water for students. Additionally, we equipped a 12-storey facility housing 226 families— serving over 34,000 cancer-affected families—with clean water infrastructure, supporting comprehensive care including shelter, nutrition, education and counselling.

These initiatives are executed in collaboration with local NGOs and employee-driven programs, ensuring relevance and measurable impact. Our commitment to

responsible, inclusive growth continues to strengthen community relationships and drive sustainable development.

CAUTIONARY STATEMENT

The statements or explanations given in this report may contain some forward looking statements based on assumptions having regard to the government policies, economic conditions, etc. The management cannot guarantee the accuracy of the assumptions and expected performance of the Company in future. Hence, the actual results may substantially differ from those expressed or implied herein.

On behalf of the Board of Directors
Sd/-
Rajesh Sharma
Place : Mumbai Executive Chairman
Date : 28th May, 2025

Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016, BSE Enlistment Number (RA): 5016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.