News Earnings Ion Exchange Q3 FY26 Results: Revenue Grows 6% to INR 7,344 Million, EBITDA Margin Drops to 8.07%Ion Exchange Q3 FY26 Results: Revenue Grows 6% to INR 7,344 Million, EBITDA Margin Drops to 8.07%
Ion Exchange reported Q3 FY26 operating income of INR 7,344 million, up 6% year-on-year, but EBITDA declined 21% to INR 593 million due to margin pressures. The company secured INR 2,050 million in solar contracts while the Roha facility reached 40-45% capacity utilization. Nine-month revenue grew 8% to INR 20,516 million with management citing positive budget implications for future growth.
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Ion exchange reported mixed financial results for the third quarter of FY26, with revenue growth offset by margin pressures across key business segments. The water treatment solutions provider faced headwinds from project execution delays and facility ramp-up costs during the quarter.
Financial Performance Overview
The company delivered consolidated operating income of INR 7,344 million for Q3 FY26, representing a 6% increase year-on-year. However, profitability metrics showed pressure with EBITDA declining 21% to INR 593 million, resulting in an EBITDA margin of 8.07%. Net profit stood at INR 206 million with a PAT margin of 2.81%.
| Metric | Q3 FY26 | Change (YoY) |
|---|---|---|
| Operating Income | INR 7,344 million | +6% |
| EBITDA | INR 593 million | -21% |
| EBITDA Margin | 8.07% | - |
| Net Profit | INR 206 million | - |
| PAT Margin | 2.81% | - |
For the nine-month period, operating income reached INR 20,516 million, up 8% year-on-year, while EBITDA decreased 9% to INR 1,902 million with a margin of 9.27%. Net profit for nine months was INR 1,189 million with a PAT margin of 5.8%.
Engineering Division Performance
The Engineering division reported revenue of INR 4,297 million for the quarter, remaining flat year-on-year. Segment EBIT declined 28% to INR 186 million due to project mix challenges and execution delays. The division secured two major domestic solar sector contracts aggregating INR 2,050 million, covering ultra-pure water systems, effluent treatment plants, and zero liquid discharge solutions.
| Parameter | Details |
|---|---|
| Q3 Revenue | INR 4,297 million |
| EBIT | INR 186 million (-28% YoY) |
| Solar Contracts Won | INR 2,050 million |
| Current Order Book | INR 28,330 million |
| Quarter Order Inflow | INR 5,160 million |
The planned dispatches of high-value international engineering contracts were deferred to Q4 FY26, impacting quarterly performance. Additionally, execution of the UP Jal Nigam order remained muted due to funding constraints.
Chemical Division and Roha Facility Progress
The Chemical division generated revenue of INR 2,307 million, showing 16% year-on-year growth. However, EBIT declined 18% to INR 431 million due to product mix challenges and Roha facility costs. The stage-wise commissioning of the Roha facility continues progressing steadily, with 40-45% capacity now operational.
| Roha Facility Details | Specifications |
|---|---|
| Total CAPEX | INR 450 crores |
| Capitalized Amount | INR 285 crores |
| CWIP Balance | INR 130 crores |
| Current Capacity Utilization | 40-45% |
| Expected FY27 Utilization | 25% |
The facility is being developed as an industry benchmark for product quality and sustainability, with full capacity utilization planned over four years. Management expects the facility to deliver better margins than the existing Ankleshwar facility once fully operational.
Consumer Products Growth Momentum
The Consumer Product division demonstrated strong growth with revenue of INR 987 million, up 28% year-on-year. The segment reported a loss of INR 33 million compared to INR 29 million in the previous year, as the company continues investing in advertising and promotion to build market presence. The division maintains healthy volume growth trends with continued investments in the "Bharat Ka Paani" brand campaign.
Budget Impact and Future Outlook
Management highlighted positive implications from the Union Budget, particularly the extension of the Jal Jeevan Mission until 2028 with increased allocation. The budget's focus on semiconductor development with INR 40,000 crores additional outlay, establishment of five mega-textile parks, and revival of 200 industrial clusters presents growth opportunities across Ion Exchange's business segments.
The company remains selective in order intake while pursuing opportunities in ultra-pure water, semiconductor, solar, and data center segments. With order inflows already exceeding the previous year's annual intake in nine months, the company maintains a cautious but optimistic outlook for sustainable growth.
Historical Stock Returns for Ion Exchange
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.07% | +8.03% | +2.01% | -15.27% | -31.28% | +104.67% |
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