| ION Exchange India Limited | ||||||
| Ratings reaffirmed at 'Crisil A+ / Stable / Crisil A1 '; Rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil A+/Stable/Crisil A1’ ratings on the bank facilities of ION Exchange India Limited (IEIL; part of the Ion Exchange group).
The ratings continue to reflect IEIL’s strong market position in the domestic water treatment segment, healthy business risk profile and comfortable financial risk profile. These strengths are partially offset by working capital-intensive operations and exposure to intense competition in the engineering segment and susceptibility to economic downturns.
The business risk profile stood healthy, driven by stable operating performance across the engineering and chemical segments, and sustained strong return on capital employed. The engineering orderbook moderated to Rs 2,830 crore as on December 31, 2025, with the company now being more selective in bidding for engineering, procurement and construction (EPC) orders with better profitability prospects. The consolidated operating income grew by 16% in fiscal 2025, driven by growth in the engineering segment due to healthy order execution and regular demand for chemical segment products. In the first nine months of fiscal 2026, revenue grew by ~8 to Rs 2,052 crore. Crisil Ratings expects the growth in operating income to remain muted at 5% in fiscal 2026 in the backdrop of Middle east crisis, which may result in delays in shipments. However, revenue growth is expected to remain strong in the medium term, driven by healthy orderbook position in the engineering segment and steady demand in the chemical segment. Further, the initiation of commercial production and smooth scaling up in operations of Roha plant within the chemical segment will aid the growth in revenue from fiscal 2027 and will remain monitorable.
Earnings before interest taxes, depreciation and amortisation (operating) margin moderated to 9.3% for the nine months ended December 31, 2025, from 10.9% in fiscal 2025 (11.6% in fiscal 2024) due to slow execution in two legacy projects, along with increase in fixed costs towards starting commercial operations at the Roha plant and incremental investments being made in the Company for optimization and better synergy. The operating margin is expected to remain under some pressure in fiscal 2026 but is expected to improve from fiscal 2027 with completion of legacy projects in EPC and increase in revenue of the chemical segment.
The company’s financial risk profile remained strong with the company remaining net debt negative as on March 31, 2025. Debt increased in fiscal 2025 and is expected to peak in fiscal 2026 with completion of greenfield capital expenditure (capex) at Roha, which was funded by availing debt of Rs 345 crore. Debt protection metrics are expected to remain comfortable with gearing below 0.5 time despite debt-funded capex. The debt protection metrics have moderated with interest coverage ratio declining to ~6 times in fiscal 2026. However, the same is expected to remain comfortable in the medium term above 8 times with ramp-up of new plant and scheduled repayment of debt. The financial risk profile is likely to remain comfortable with expected strong cash accrual of Rs 250-350 crore in medium term against project debt repayments well-spaced out over ~5 years (till the first quarter of fiscal 2032) and prudent dividend policy. Liquidity remained strong with healthy bank balance, unencumbered cash and cash equivalents of Rs 162 crore as on Dec. 31, 2025, and cushion in the working capital limit. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of IEIL and its subsidiaries. This is because all these companies, collectively referred to as the Ion Exchange group, have a common management, have significant transactional linkages and operate in the same or related businesses. IEIL has also extended corporate guarantees for a portion of debt contracted by some of its subsidiaries. Crisil Ratings has also factored in the debt of one associate company, Aquanomics Systems Ltd (ASL), as IEIL has extended corporate guarantees for the debt as working capital limit contracted by ASL.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong market position in the domestic water treatment segment: The company has a strong market position in the domestic water treatment segment with established relationships with its customers and suppliers. The varied product range find usage in various industries such as solar, pharma, petrochemical & refinery, power, steel, sugar, electronics, pulp & paper, textile, cement and automobile. Further, it has an established track record and strong expertise of around six decades in providing the full range of products in the water treatment segment. Longstanding presence of the promoters and a robust nationwide aftersales service have helped the group to establish the brand. Revenue is well-diversified with the engineering, chemicals and consumer product divisions contributing around 61%, 29% and 10%, respectively, to sales in fiscal 2025. The diversified revenue stream supports the company from any downturn in any particular segment. Diversified product profile and customer base spread over various industries such as solar, pharma, petrochemical & refinery, power, steel, sugar, electronics, pulp & paper, textile, cement and automobile. The acquisition of a Portugal company, MAPRIL (acquisition completed in June 2023), provides better access to IEIL in and around the European market.
The engineering segment had orders worth Rs 2,830 crore as on December 31, 2025 (Rs 3,405 crore as on December 31, 2024) with strong bid pipeline of Rs 9,000 crore, which offers strong revenue visibility.
Healthy operating performance: Consolidated revenue grew 16% in fiscal 2025 due to healthy order execution in the engineering segment (17% increase year-on-year) and strong demand from end-user industries in the chemical segment (16% increase year-on-year). Driven by the stable engineering orderbook and healthy demand in the chemical segment duly supported by new acquisition and expected ramp up in operations of the Roha plant, IEIL’s consolidated revenue growth in fiscal 2027 is expected to remain at 12-15% in medium term.
The operating margin moderated from 10.9% in fiscal 2025 to 9.3% in the nine months of fiscal 2026 (11.6% in fiscal 2024) due to slow execution in two legacy projects, along with fixed costs for new plant at Roha, additional manpower, raw materials, approvals, testing and others and high investments being made in the Engineering & consumer product segments. The same is expected to normalise by the next fiscal with start of commercial production at Roha, completion of lagging EPC projects.
Strong financial risk profile: The company’s financial risk profile stood strong with the company remaining net debt negative as on March 31, 2025. Because of incurring of Roha capex, some financial parameters such as net cash accrual to adjusted debt (NCAAD) ratio moderated from 1.6 times in fiscal 2024 to 0.8 time in fiscal 2025. The total outside liabilities to tangible networth (TOLTNW) ratio also moderated from 1.4 times as on March 31, 2024, to 1.5 times a year later. These parameters are expected to moderate further in fiscal 2026 with completion of capex. The debt protection metrics are expected to improve in the medium term with ramp-up of Roha facility and scheduled repayment of debt. The financial risk profile is likely to remain comfortable with expected strong cash accrual of Rs 250-350 crore in medium term against project debt obligation well-spaced out over 5 years (till the first quarter of fiscal 2032) and prudent dividend policy. The TOLTNW ratio is expected to remain at 1.3-1.6 times in the medium term while NCAAD ratio is expected to remain at 0.4-1 time. |
Key Rating Drivers - Weaknesses Working capital-intensive operations: Gross current assets were high at 265 days as on March 31, 2025 (266 days a year earlier), led by receivables of 153 days (against 147 days) and modest inventory of 50-51 days. Payables reduced to 162 days as on March 31, 2025, from 170 days a year ago. Back-to-back arrangements with suppliers and advances from the clients partly aid working capital management.
Exposure to intense competition and cyclicality in the engineering segment and susceptibility to economic cycles along with risk related to contingent liabilities: Revenue remains susceptible to economic cycles that impact the engineering segment. The company also caters to government agencies and public sector undertakings (PSUs), expenditure of which is directly linked to the economy. Any delay or deferment of capex in end-user industries or any slowdown in the Indian economy could adversely affect IEIL’s revenue. However, diversified revenue stream from other segments such as chemical and consumer product support the company from any downturn in the engineering segment.
Due to the nature of business, IEIL has sizeable off-balance sheet liabilities, primarily bank guarantees given to clients. Hence, the company is exposed to the liquidity risk that may arise out of these contingent liabilities. |
Liquidity Strong Liquidity remained strong with healthy bank balance, unencumbered cash and cash equivalents of Rs.162 crore as on Dec 31, 2025.. The fund-based working capital limit utilisation was at 5-10% for the 12 months through December 2025. Expected annual cash accrual of Rs 250-350 crore in medium term to comfortably cover yearly debt obligation of Rs 55-80 crore over five years (till the first quarter of fiscal 2032). Liquidity is sufficient to support all term loan repayments and incremental working capital requirement. The Company also has a prudent dividend policy, which further supports liquidity on balance sheet. |
Outlook Stable Crisil Ratings believes the IEIL group will continue to benefit from its established market position, healthy order pipeline in the engineering division, healthy margin in the chemical division and strong financial risk profile |
Rating sensitivity factors Upward factors:
Downward factors:
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About the group The flagship company of the ION Exchange group, IEIL was incorporated in 1964 as a 60% subsidiary of the UK-based Permutit Company. The foreign holding was reduced in a phased manner and it became wholly owned Indian company in 1985. IEIL began manufacturing ion-exchange resins at its plant in Ambernath, Maharashtra in 1965 and diversified into chemical treatment of water in 1982.
IEIL operates in three key segments—engineering, chemical and consumer products—and has six factories in five states. Each business is managed by a dedicated team. The engineering segment plans and executes orders for installation of large and medium-sized water and effluent treatment plants. The chemicals division manufactures ion-exchange resins and industrial chemicals and sells them in India, North America, Middle East, Europe and Southeast Asia. The consumer products segment offers a range of water-care products for homes, institutions and communities to provide pure & safe drinking water under Zero-B brand and sustainable waste management. |
Key Financial Indicators*
*Crisil Ratings-adjusted numbers |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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