Ion Exchange (India) Limited

Industrials — Pollution & Treatment Controls · NSE

₹378.00+₹0.30 (+0.08%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Ion Exchange (India) Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ion Exchange (India) Limited, together with its subsidiaries, provides water and environmental management solutions in India and internationally. It operates through Engineering, Chemicals, and Consumer Products segments.

IndustryPollution & Treatment Controls

SectorIndustrials

Employees2,975

Annual revenue₹2,899 Cr

How does it make money?

Turns over ₹2,899 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 2,975 employees supports ₹97.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹97.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 12.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 13.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.2%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +46% while net margin moved -51% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+46%

Margin effect-51%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 45.7x is demanding — it needs sustained high growth to justify
✗ P/E is 49% above its own historical median of 30.7x — expensive by its own standards

Quality vs. Valuation

Company Quality

44/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

46/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

45.7x

3Y Median

30.7x

40 monthly readings · mean 30.1x · range 18.3x–42.5x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 49% above its 3y median of 30.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 49% below the peer median of 88.8x.

vs. its own history

Expensive

30.7x median over 40 months · +49%

vs. sector peers

Cheap

88.8x median of 3 peers · -49%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

16.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 23.6% to 10.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.0% to 12.3% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 714% over 3 years, from ₹59 Cr to ₹482 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.0 points, from 15.2% to 10.2%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹283 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 27% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 99% against revenue up 46% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 49% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 15.2% to 10.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 49% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 23.6% to 10.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.6% CAGR
Latest reported year was 20.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹283 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹4,647 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

45.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.35x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.27

Profitable

Profitable on a per-share basis

ROE

10.7%

Moderate

Moderate capital efficiency

ROCE

12.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.36x

Low

Conservative leverage

Revenue Growth (YoY)

20.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-91.6%

Falling

Profits are shrinking

Dividend Yield

0.33%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹283 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

21.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

1.4%

Weak

Thin margins leave little room for error

Net Margin

3.2%

Average

Average bottom-line conversion

Current Ratio

1.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

406.9 / 397.7

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

18.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,979 Cr	₹2,338 Cr	₹2,716 Cr	₹2,899 Cr	+13.6%
EBITDA	₹301 Cr	₹321 Cr	₹342 Cr	₹295 Cr	-0.6%
EBITDA Margin	15.2%	13.7%	12.6%	10.2%	—
PAT (Net Profit)	₹197 Cr	₹196 Cr	₹208 Cr	₹143 Cr	-10.2%
EPS	₹16.6	₹16.53	₹17.53	₹12.03	-10.2%
ROE	23.6%	19.3%	17.2%	10.7%	—
ROCE	30.0%	23.5%	19.5%	12.3%	—
Total Debt	₹59 Cr	₹152 Cr	₹323 Cr	₹482 Cr	+101.2%
Free Cash Flow	₹3 Cr	₹10 Cr	-₹288 Cr	-₹283 Cr	—

🟢 Revenue has grown at 13.6% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.6% a year).

🔴 EBITDA Margin has fallen from 15.2% to 10.2% over 3 years (-5.0 pts).

🔴 PAT (Net Profit) has shrunk at 10.2% a year over 3 years.

🔴 EPS has shrunk at 10.2% a year over 3 years.

🔴 ROE has fallen from 23.6% to 10.7% over 3 years (-13.0 pts).

🔴 ROCE has fallen from 30.0% to 12.3% over 3 years (-17.7 pts).

🔴 Total Debt has grown at 101.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹283 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,380 Cr

Total Liabilities

₹2,040 Cr

Cash & Equivalents

₹185 Cr

Operating Cash Flow

-₹28 Cr

Capex

-₹254 Cr

Shareholding (proxy)

Institutional Holding

20.3%

Insider Holding

44.0%

Corporate Actions

Dividend Rate

₹1.25

Ex-Dividend Date

31 Aug 2026

Analyst Consensus

Target Price (Mean)

₹448

+18.5% vs CMP

Target Range

₹448 – ₹448

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

3 mixed3 general

IONEXCHANG Forecast — Price Target — Prediction for 2027

TradingView, 12 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

ION Exchange zooms 17%, up 51% from 52-week low; check what's driving gains

Business Standard, 10 Jul

Have Ion Exchange (India) Insiders Been Selling Stock?

Simply Wall Street, 29 Mar

5 Best Small-Cap Stocks To Buy In India October 2026 | Top Picks & Guide

Samco, 15 Oct

Ion Exchange: Why did the stock jump 10 per cent by after a weak Q1?

Value Research, 01 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

ION Exchange shares jump 19% after bagging ₹503 crore order from Hyundai Engineering; check details

Upstox, 10 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑