Ion Exchange (India) Limited - A Thread

1/ About the Company
Ion Exchange (India) is engaged in a wide range of solutions across the water cycle from pre-treatment to process water treatment, waste water treatment, recycle, zero liquid discharge, sewage treatment, packaged drinking water, sea water desalination.
2/ Operational Guide
The company operated under three business segments; Engineering segment, Chemicals segment & Consumer Products. Based in Mumbai, the company has seven manufacturing & assembly facilities across India, and one each in Bangladesh, UAE, Bahrain and Indonesia.
3A/ Financial Performance
In FY21:
The overall Sales fell by 2%
6% decline in chemicals
14% fall in consumer products
Engineering had a 0.2% growth
Even after fall in Sales Operating Profits grew by almost 50% YoY (Margin 13.96%)
Net Profit Margin of 9.89%
3B/ Financial Performance
The margins improved based on increased degree of utilization of the clinical setup & improved efficiencies from increased scale of operations
There was favorable movement in raw material prices
The long-term debt reduced from INR 18.8 Cr. to INR 8 Cr
4A/ Growth Aspects
The company grabbed a Letter of Award and Contract from the government for rural drinking water supply to 1,000 villages in two districts of Uttar Pradesh worth INR 1,000 Cr
Expecting to setup a greenfield plant for its resin facility (Capex INR 100Cr+)
4B/ Growth Aspects
Order book of the company stands solid with INR 662 Cr. for Engineering projects, INR 5.4 Cr. for the Sri Lanka Project and INR 6000 Cr. for the Bid Pipeline
Increase their spending on R&D to add additional product lines
5/ Peer Comparison
The primary competitor of Ion Exchange is VA Tech Wabag providing similar waste water treatment solutions.
Other peers like Thermax Ltd, Triveni Engineering & and Praj Industries Ltd have their water business segment constitute very low % of their revenue
6/ Tailwinds
India is among the leaders in fresh water consumption, amounting to 750B cubic meters annually
The demand for fresh water is expected to rise to 1.5T cubic meters by 2030
Nal se Jal Scheme of the government will put significant focus in water treatment
7/ Conclusion
The other government projects like 100 smart cities project, Swachh Bharat Mission, Atal Mission for Rejuvenation also providing opportunity.

What is your Opinion on Ion Exchange?

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