Ion Exchange (India) Ltd Q1 FY27 Earnings Analysis

- The chemicals segment has a positive long-term outlook with continued investment and international market expansion, especially via the new Roha facility targeting exports. - Roha plant aims for 25% capacity utilization in the first full year, with progressive customer acquisitions underway, supporting volume growth. - Efforts are ongoing to grow revenues in the consumer products division, which increased 34% YoY, aiming to move towards breakeven or modest profitability. - Engineering segment order book provides healthy revenue visibility, boosted by new medium-sized opportunities across sectors and international markets. - The UP Jal Jeevan Mission and legacy projects will contribute revenue over the next financial year with expected execution ramp-up as government funding improves. - The Oman BOOT contract will start contributing O&M revenue from this financial year, showing potential revenue growth in international operations. - Despite short-term headwinds (West Asia crisis and input cost inflation), management expects sales and margin outlook to improve directionally in FY27.

- Engineering segment expected to benefit from healthy order book and project execution, including significant projects like the IOCL Panipat Refinery and Oman BOOT contract, ensuring revenue growth. - Legacy UP Jal Jeevan Mission project’s slow execution is a near-term drag but expected to complete within FY27, with government fund flow improving, which should support margin recovery. - Chemicals segment faces short-term challenges from raw material inflation and West Asia logistics issues; however, long-term outlook is positive with strategic contract wins and new capacity at Roha plant commissioned. - Roha facility aims for 25% capacity utilization in FY27 with growing export demand; profitability expected to improve as input cost pressures and ramp-up expenses ease. - Consumer products division growing strongly (34% YoY) with a path towards break-even or modest profit. - Overall, management aims for improving sales, margins, and profitability in FY27 but emphasizes caution due to ongoing geopolitical and market uncertainties. - No specific quantitative EPS or profit guidance given currently; more clarity expected in H2 FY27.

- Roha Plant: Focus on utilizing existing Roha facility capacity with backward integration underway; no major new CAPEX planned immediately, only maintenance and routine CAPEX of Rs.30-40 crores for FY27. - Oman Project: CAPEX of around USD 40 million over next two years planned, funded by a mix of debt and equity; Ion Exchange holds 51% in the JV. - Strategic Investments: Partnership with MANN+HUMMEL to expand membrane technology portfolio for global markets. - Future CAPEX: No major expansions currently envisaged; any new major CAPEX or plant expansion will be communicated later as plans crystallize. - Debt Position: Gross debt expected around Rs.384 crores by end FY27 with CAPEX funded through internal accruals and partner contributions for JV projects.

- No major new CAPEX is planned currently, except possible plant expansions in the future, which will be communicated when plans crystallize. - Gross debt is currently around Rs. 384 crores, with no major increase envisaged by the end of FY27. - Future CAPEX is expected to be mainly maintenance and routine, estimated at Rs. 30-40 crores for FY27. - For the Oman project (USD 40 million CAPEX), funding will be through a mix of debt and equity, with the company's equity contribution coming from internal accruals; balance shared with joint venture partners. - The company prefers to monitor the situation due to global economic and geopolitical uncertainties; thus, any significant new fundraising plans will be shared at an appropriate time. - No immediate plans for large-scale debt or equity fundraising have been announced.

- As of 31st March 2026, the engineering order book stood at INR 26,433 million, providing healthy revenue visibility going forward. - The company’s order intake in the engineering segment has been quite healthy, with a 40% increase compared to the last full financial year. - Major portion of the projects from this order book are expected to be executed in the current and next financial year. - The backlog includes standalone orders only; joint venture orders such as those in Oman are excluded from reported backlog. - The UP Jal Jeevan Mission project has around 30% of its scope pending execution, with execution pace dependent on government fund inflows. - Legacy projects in the engineering segment are expected to complete by the second or third quarter of FY27, and the government has extended these timelines.