ION Exchange (India) Limited (IONEXCHANG) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to ION Exchange India Limited Q4 and FI26 on your conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valerium Advisors. Thank you, and over to you, ma'am.

Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valerium Advisors. We represent the investor relations of Ion Exchange India Limited. On behalf of the company and Valerium Advisors, I would like to thank you all for participating in the company's earnings conference call for the fourth quarter and financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Ankur Patni, Vice Chairman, Mr. Indra Neelgad, Managing Director and CEO, Mr. Vasan Nayev, Group Chief Financial Officer, and Ms. Nikisha Solanki, Company Secretary. Without any further dealing, I request Mr. Vasan Nayak to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purwangi. Good afternoon, everybody. It is a pleasure to welcome all to the earnings conference call for the fourth quarter and financial year 2026. For the fourth quarter under review, on a consolidated basis, the company reported an operating income of INR 8,633 million, an increase of around 3% year-on-year. The EBITDA stood at INR 199 million, and EBITDA margin stood at 2.31%, and net profit was INR 243 million, and the PAT margin was at 2.81%. In financial year, 2026, the company reported operating income of INR 29,148 million and increase of around 7% year-on-year. EBITDA stood at INR 2,102 million, down 29% year-on-year. The EBITDA margin stood at 7.21% and the net profit was INR 1,432 million, whilst the PAT margin The return was at 4.91%. Now let me take you through the quarterly segmental performance on a consolidated basis. In the engineering segment, the revenue for the quarter stood at INR 5539 million, which is flat on a year-on-year basis. The segment EBIT was INR 215 million. The inquiry pipeline continues to remain healthy with both quarter and quarter and year-on-year growth in order inflows, Driven primarily by the medium-sized opportunities across sectors. During the quarter, planned dispatches of certain high-value engineering contracts to the GCC geographies were impacted due to disruptions arising from the West Asia crisis. However, we have since received customer clearances to proceed with the execution post the end of the quarter. The closure of the Sri Lanka project continues to progress as planned and we expect to complete the project by the end of the second quarter of the financial year 2027. During the quarter, we achieved an important milestone with the successful commissioning of the raw water treatment plant for the IRCL Panipat Refinery Project, which is the largest water treatment package awarded in India. We have also entered into a technology transfer and manufacturing collaboration with Mann and Hummel, a global leader in filtration technology. For the manufacture of ultrafiltration membranes and transfer of membrane bioreactor technology to India. This partnership further strengthens our membrane portfolio and enhances our technology offerings. As at March 26, 31st March, the engineering order book stood at INR 26,433 million, providing healthy revenue visibility going forward. Coming to the chemical segment, the revenue for the quarter was INR 2297 million and increased by around 3% year-on-year, while the EBIT stood at INR 334 million. The business continues to record sequential and year-on-year improvement in turnover. However, the turnover was impacted primarily in March 26 due to logistic disruption from the West Asia crisis. In addition, the profitability during the quarter was also affected by input cost increases as well as the Loa facility cost. We have initiated appropriate pricing action to pass on the cost increases to the customers. We have also successfully completed during the quarter the commissioning of all the manufacturing lines at Loa. Further, the facility has since received post the end of the March quarter certification from the WQA, Water Quality Association, which is a globally reputed testing agency for the reasons which are manufactured at Roha. The certification is expected to enhance access to international markets and support future growth. We have also secured strategic contracts with key customers. Which augurs well for the business growth and strengthens our position in the market. For the consumer product division, the revenue for the quarter stood at INR 1047 million and increased by 34% year-on-year. The loss for the quarter was INR 46 million compared to a loss of 52 million in the same period of the previous year. This segment continues to witness healthy volume growth supported by expanding market reach and increasing product acceptance. The company continues to invest in the business to build a significantly higher and more scalable revenue platform. Coming to our international operations and our group companies, execution of the 20-year debut contract valued at Omani Real 73.46 million, which was awarded by the Petroleum Development Oman to our subsidiary company, Iron Exchange and LSU Oman. This is progressing as per the schedule. We have also entered into a project joint venture with a local partner in Malawi for the execution of a water treatment package valued at USD 18.1 million. This contract has been awarded by the Northern Region Water Board, Malawi. In parallel, we continue to strengthen our international footprint and are expanding our presence across overseas markets with a focused strategy to grow our product business and deepen customer engagement in key geographies. With this, I conclude the opening remarks and we can now open the floor to Q&A. Back to you, Furvanji.

Thank you so much. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Kishore Kumar with Unifi Capital, please. Mr. Kumar, you may please proceed ahead with the question. You may unmute and you may proceed. Mr. Kumar, you may please unmute yourself and proceed with the question. No response from Mr. Kumar. We'll move forward to the next participant. Our next question comes from the line of Nirmam with Unique BMS. Please go ahead. Virmav, you may please proceed ahead with your question. Our next question comes from the line of Harsh Shah with Meresis Advisors. Please go ahead.

Yeah, hi. Can you hear me?

Yes, we can hear you. Please go ahead.

Yeah, yeah. So, can you highlight the importance, the strategic significance of the Diabedman Hummel JV, and what will it do us in terms of capabilities, geographical reach, and client pre-qualifications?

Yeah, so this is Indranil Dutt, and I'll take the question. So the man and human partnership and collaboration is a very, very important milestone for the future success and growth of the company. As we have talked in the past, that along with resins and water treatment specialty chemicals, which is in the chemicals segment. The membrane technology and product line is one of the biggest strategic growth levers of the company for the future. Looking at the overall outlook of the membrane growth potential in the world, which stands at almost 10% plus the overall membrane market is growing. It's a very important market for the company, and we are the only company which has an almost comprehensive range of membrane products, starting from reverse osmosis membranes to ultrafiltration membranes and anofiltration membranes. This partnership with Man and Hummel was made with the intention of further expanding the membrane portfolio. The latest technologies of ultrafiltration, BBDF-type flat sheet membranes, and to get the, you know, MBR technology for which man and human is famous. So that will now, with this partnership and the work that we do, it will make ion exchanger membrane portfolio totally complete. And will give us access to the best technology in an area where we had to develop one, and with that we should be able to exploit the total potential of the global membrane market in the years to come.

Okay, sir. And can you also highlight on the geographical reach and, you know, how you propose to reach out to clients about the new product that, you know, you're going to develop?

You know, the membrane products are beginning to get distributed in our markets in Middle East as well as in the Asia-Pacific geographies. In the near future, we plan to take some of these products also to the Africa and the Europe markets as and when the membrane products... Co-developed with man and human and with the technology, then those products will also be added to the portfolio of membrane offerings in the global market as well.

And sir, can you also elaborate on the acquisition of material and what does this acquisition do for us in terms of capacity building or geographical expansion?

This acquisition by the company of Mapril was done in 2023, middle, and that gave the company a strategic foothold in the South Europe market, specifically in the Iberian Peninsula of Portugal and Spain. This company is based in Porto, on the west of Portugal. And allows us to be a local company and tap the potential of the market for the entire range of water treatment products and solutions in that geography. The company, since the acquisition, has been fully integrated into the ion exchange group. The company is expanding its presence and increasing its business in the Iberian region of Portugal and Spain, and we expect to see further growth and success for the company's expansion with the help of the Mapril acquisition.

Okay, sir. Thank you so much. I'll join back in the queue.

It comes from the line-off. Dr. Kumar with Unificata. Mr. Shur, you may please proceed with the question.

Sir, my question is on the Oman project that we won in last quarter. So, since it's a build-operate transfer project and we are executing in a JV, what is the upfront CAPEX that we need to incur? And is there any grant that will be coming from the customers which can actually ease out the CAPEX requirement?

It is being executed through our joint venture partner in Oman, which is Ion Exchange Oman, and the CapEx build-out is about 40 million U.S. dollars over the span of next two years, which will be funded with the debt and the equity structure.

What is our contribution to the debt, sir, in this, actually, out of the 40 million, and what would be the partner's contribution and equity as well?

Sir, a 50-50 joint venture between Ion Exchange, Ion Exchange holding 51% is a consolidated joint venture of the company, and based on, you know, those lines, the, you know, equity distribution will happen.

And my second question is on the Rova plant. Now we have commissioned it fully. Are we in line with our previous guidance to achieve the 25-30% of capacity utilization? And how are we proceeding on the customer acquisition front as well?

It has been in the past that we will work towards 25% capacity utilization of the roha plant in the first full year of operation. We continue to remain, you know, in line with those expectations, while there are some short-term headwinds in respect to the West Asia crisis, where some of the critical raw material used for these products. The name is Tyrene and Olium have gone up, but we believe that, you know, those risks would get mitigated, and we should be able to meet our earlier guidance from a planned capacitualization standpoint for this financial year.

And just a follow-up on this, since the input cost prices have gone up, Do you think that PBT is possible this year or it will actually differ one or two quarters?

We are trying our best to see that we can get there. As we all know, the West Asia crisis continues to be very, very dynamic. But as we are just in the first couple of months of this new financial year, we are still endeavoring our best to see that we can achieve that objective.

Sir, I have a question on the engineering segment as well. How is the legacy project execution been going on? We actually guided that it will spill into FY27 as well. How are we positioned there? Do you think there will be margin drag because of this in FY27 as well?

So, as we have given in the earlier guidance and updates, the project continues to move at the expected pace. A significant part of the project execution has already been done. However, you know, as we have said earlier, the balance of the project will be executed in this financial year. We continue to work on the site and with the customer in line with the earlier given timelines.

Any comments on the margins or engineering segments?

So on the margins for the engineering segment, we have seen some headwinds in terms of the deferral of some of our engineering export shipments, approximately about 60 crores because of the West Asia crisis. Some shipments were scheduled to be sent to the GCC countries, which had to get deferred, and also as a result of which Local shipments in the last quarter of the financial year had gone up versus the global exports, the global revenue percentages, which has given us some, you know, some headwind to the overall margin of the engineering segment.

Kishore, I'm sorry to interrupt you, but you may please read Jandik for more questions. Thank you. Our next question comes from the line of Nirmam with Unique PMS. Please go ahead.

Yes, sir. My first question is on the EPCB.

I'm sorry to interrupt you, but your voice is breaking. If you can just...

So, my first question is on the EPC business. So, you mentioned that we had some slowdown because of some GCC delivery deferrals, but apart from there, are there any challenges because of which we are seeing some issue on the growth side of things?

No, I think predominantly those were the two headwinds I talked about. Apart from that, our order intake has been quite healthy. In fact, it has been 40% more than the last full financial year, and we expect a majority of those projects to get executed in this financial year and the next. So, apart from those two headwinds, which we called out, we don't anticipate any other major challenges in the engineering segment.

Okay, sir. And my second question, sir, is on the chemical business. So, we've seen some impact on profitability, and again, you've mentioned one was the input price pressure, and the second was the roha. So, if you could comment on the profitability X of ROHA interest and depreciation, so, you know, how are we seeing the outlook there, and if we can maintain our historical hazard, it will be better.

So, as I said, you know, the two headwinds that we received was obviously on the ROHA interest depreciation costs. For the year, as well as some impact of the West Asia crisis due to which our revenues in the month of February and March were impacted. We expect some of those lost revenue to come back to us in this financial year. So, you know, there has been, I think I would say, a fourth. of the impact of the overall segment can be attributed, you know, to X-ROHA causes. So whatever delta that you see, one-fourth of that you could attribute to the non-ROHA reasons, which is what I talked about.

Okay, sir. And so this last question on the legacy project, so that completes by second or third quarter of this year?

We should be able to close it in this financial year. As you know, project work on the sites are, you know, dynamic in nature. So, at this point in time, the guidance we can offer is that it will close out in this financial year. And there are two legacy projects. One is the one that we talked about just now, and also, we also have the UP projects, which will continue to progress as the funds flow in for those projects.

Okay, sir, got it. Thanks and all the best.

Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly remit your question to two questions for participants. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Thiraj with Ingrid Equity. Please go ahead.

Hello, am I audible? Okay. Sir, I wanted to get some clarity on the margin that has been, you know, gotten in the chemical segment. So, like you said, 25% of the data that has been there, that is due to Roja expansion. But apart from that, can you clarify what's the bifurcation between the Middle East logistics issue or due to the price increases?

I think I'll clarify, I said that out of the 4% drop in the margin, Three-fourths of that is because of the ROHA expenses. Only one-fourth of that was because of the Middle East crisis that happened, for which some revenue, specifically for our resins business, was deferred out because of logistics challenges. We expect that to come back in this financial year.

So, I mean, out of the 10% margin decrease that has happened in, like, the chemical segment? Because the margins are coming from 25 to 15, right? So out of 10%, 7.5% is due to the ROHA expense.

The ROA impact will be just under 7% for the quarter, and what Mr. Injanil was explaining was the overall impact for the full year.

Okay. But still, you know, 7.5%, it's a very high number. Did we not capitalize that cost, which was, then for the business note, I think the routine expense that can impact margins so severely.

We have also mentioned in our earlier calls, the entire utility building and the associated infrastructure were capitalized in the month of September 25, while the manufacturing lines got progressively capitalized during the year, with a major capitalization taking place in March of 26. That is why there is a big delta in the bottom line for the Zohar.

Yes, sir, but if we capitalise it, then there shouldn't have been any impact on the EBITDA side, right? Or is this just that there is no change in the EBITDA, it's mainly the EBIT that we have been suffering?

That is what I am saying. I am talking of the segment margin, which is basically the EBIT margin. So for the quarter, it was just under 7%, and for the full year, it was around 3%.

Okay, sure. And coming on to the next, in the engineering segment also we suffered a lot of

margin contraction.

So is most of that, like almost all of that is contributed due to the Middle East operations only?

There were a variety of factors which were explained in the earlier question also, apart from the Middle East crisis because of the deferral in some of our export shipments, we also had the impact of the legacy project which is continuing and which is expected to continue for some part of the year going forward. And also the UP project which is there, that also is a factor which is impacting the margins. So this is a combination of factors which has overall impacted the engineering segment.

Okay, and I would like to do it.

I'm sorry to interrupt you, but please. Remindly to all the participants, kindly limit the question to two questions per participant. Thank you. Our next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead. Yeah, thank you for the opportunity.

Am I audible? Yes, you are. Please go ahead. Yeah, thank you. Sir, I just want to double-click on this Roha resin plant. Sir, have you fully commissioned the 42,600 cubic meter capacity along with full backward integration?

Commissioned the plant, but there is one backward integration that is underway, but that does not affect the production of the plant. It will help us improve our profitability. Otherwise, the plant is fully commissioned. We have said in the past, a significant part of the plant will be used, production will be used for exports in the global markets. Specifically in the U.S. in the drinking water segment for which a particular certification from the Water Quality Association of the U.S. for the National Sanitation Federation is required. That has been obtained and hence we expect the revenue from the ROHA plan to start picking up from this financial year onwards.

And, sir, you have spoken about some strategic contracts which you have won with some key customer in chemical division. I just wanted to clarify, was it related to Roha plant or was it related to the overall chemical segment? Because why I ask that question is because majority of your capacity addition is coming through that Roha plant. So, hence, I am asking that question.

So, that particular comment was linked to our other portfolio product lines. And offering in the chemical segment, which is into water treatment, specialty, and chemicals. So in that segment, you know, we have made that particular remark. As far as while the capacity addition of the company or the cap spin of the company has been predominantly in Roja, As we have said in the past, this capacity addition is essentially for the exports market, which is where our teams are working on with our global customers to get more of their volume, and we are confident in doing that as we go forward.

Okay, okay. And one last question, you know, you have highlighted about the RM inflation and logistic disruption also. With this backdrop, you know, what is our sales and margin outlook for 27 in both chemicals and engineering division? And how much KPIX are we planning to spend in FY27? And by the end of FY27, what would be our gross debt position?

At this point in time, we will not be able to offer you any specific guidance. This is in line with our traditional outlook providing practices, which we will try and do somewhere in the second half of the financial year. This is way too early for us to be able to answer those questions. Also more in keeping in mind the West Asia crisis. And the dynamics of the situation that we all see are changing by the day, we would like to defer answering this particular question. We can show more light in the second half of the year.

Okay. Is there any highlight on the KPEX, at least, like what kind of KPEX are we planning to do in FY27? And since you highlighted that we'll be spending some more on that Oman project also. So, just on CAPEX number and gross debt position, let's say, by the end of FY27, if Basun sir could answer, that would be very helpful.

At this juncture, the CAPEX, what we have envisaged is more into the maintenance and routine CAPEX, which is in the region of around 30 to 40 crores. As Mr. Indanil mentioned, as we move forward during the year, we will share with you any new major CAPEX which we have in mind, but that will be... In the later, during the quarters, and in terms of the gross debt, presently it is in the region of 384 crores. At the moment, we are not envisaging any major capex unless we go for any plant expansion, which we will inform in due course as and when the plants get crystallized.

Thank you so much.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one on your touch-tone telephone. Next question comes from the line of Harsh with Marisys Advisors. Please go ahead.

Yeah, just to carry forward from the previous participant, sir, can you just give the, so you told that the maintenance and routine capex for FY27 will be 30 to 40 crores and gross debt around 384 crores. So what are our current capacities which will get completed or any, across different products? You can give a brief idea about it.

That our current objective is to, you know, utilize the ROHA CAPEX and the ROHA capacity that we have set up. We are mindful of the... You know, of the return on capital employed for the ROHA project, and that is what the focus of the company is on. In addition to that, as Vatan has explained, we have, you know, the obligation of the necessary capix for the P.D. Oman project, concession project that we will be doing, plus the routine maintenance capix at this point in time. We do have some ongoing work in our membrane and in our standard. Standard plants and products area, which we continue to pursue well within the range that Vassal talked about. So, right now, that is what we are focusing on. As we work on, you know, growing the revenues from the ROHA segment, we continue to evaluate other CAPEX opportunities Please, for further expansion. However, we will come back. With those information at an appropriate time. For now, our focus is to see how we can improve the return on the capital deployed in Roja.

Okay, sir. Thank you. Thank you so much.

Christian comes from the line of Sake, Kapoor, Kapoor. Yeah. Namaskar, sir.

Hope I'm audible. Yes, you are. Thank you for the opportunity. Firstly, on the UP GELG-1 mission project, what percentage of the same has been executed, and if you could just explain to us how the receivable movement has been from March ending to till date? Peace. Hello.

So, I would say about 30% to 40% of the people who are in the hospital are in the hospital. The pace of execution remains slow. As we said, it is dependent on the cash inflow to this project. And currently, the focus is on closing out the projects which are almost finished. That is where the fund disbursement is happening. We continue to execute those projects to the extent of, you know, collections received so that we can manage our working capital, and we are facing the progress based on the receipt of funds.

Yes, sir. So, how have been the receivable movement, sir? The closing balance for March and the closing balance today, how much have we received out of the outstanding we had from this project?

We do not typically share any specific such details, sir, but what we can say is post the announcement from the government on the continuation of the Jaljeevan Mission Scheme, we have seen allocation of funds. to the scheme from the center to the state. And we have seen some start of funds flowing in the month of, you know, March and a little, you know, again in this current financial year. So we are hoping and which pace is definitely better than what we saw in the last financial year on an average in the whole. So we are hopeful that more funds will start flowing in. And as we see more funds coming in, we will also increase the pace of the balance execution.

And secondly, on the consumer product division, I think our revenues have gone up for this financial year. So, if you could just share the strategy or the outlook for the segment, and when can we expect this to start contributing profitability towards the company? I think if you could just throw some more light.

So, we are consistent with our earlier guidance on the consumer products division. As we had said in the earlier calls, we continue to invest for growth in this segment, and our efforts... We are showing results because this particular segment of the company has grown 34% year on year. If you read our financials for this segment in comparison to the past year, you will find that our overall profitability or the losses have reduced in this particular segment. And the outlook for this segment. Continues to be positive, and we expect to grow further on a similar trajectory or slightly lower, because the rate has also increased for this current financial year, and we are also expecting better. We can at least break even or have a moderate, very small, low single-digit profit in this business line. So all efforts are continuing to drive further top-line growth as well as improve the operational profitability and performance of the division so that we can break even and turn positive profitable in this financial year.

Only to add a point, sir, you did mention about your short money. You are not able to give us a guidance in terms of margin definitely, but for the core segment of chemicals, how is the operating environment currently? And how is our utilization level for the current ensuring quarter? We are, I think, two-thirds into it today. Can you just give us some understanding on the business operating environment on the chemical segment?

So, again, as in the past, we have said, you know, the chemical segment continues to be extremely dynamic. This is a segment where the company has been reporting significantly higher profitability compared to the rest of the company. We have gone up to the high 20s. From a profitability standpoint, and when asked whether we can continue to sustain or increase that, we have always continued to say this is a very dynamic environment, a lot of input parameters drive profitability, and we have to keep a very, very close watch on all these parameters to ensure sustained profitability performance. In the last quarter, because of the unexpected events leading to the West Asia crisis, We had a significant headwind on the raw material cost in this segment, which took us a bit of time to start passing it back to customers. As a result, we have seen some temporary softening of the profitability in this segment. The teams are working with our customers to see how we can pass on some of the raw material input cost. Back to the customers to pricing changes and we expect to some of those measures the overall profitability will improve. At the same time, we are also de-risking our supply chain by opening up manufacturing centers in other parts of the world close to our markets. We are happy to say that our manufacturing plant in Dhamam, Saudi Arabia for the Middle East market has now started commercial production, And we hope to cater to more customers locally from their facility, and we continue to work on their strategy in other parts of the world as well.

I'll just add a little bit to that, Indranil. Since the gentleman asked for an outlook for the segment, the long-term outlook for the segment remains extremely positive for us, and that's the reason why we have invested so heavily into that segment. We do feel that we have not even scratched the surface when it comes to the international markets, while, you know, the Asia crisis or otherwise. Some temporary admins do exist, but the long-term story...

First, in the margin trajectory is behind us as the March earnings we have reported for the segment or the headwinds which we faced are still negating our profitability going for the entering quarter also. If you could just give us some thought process on the same.

So, I would say that we have been able to mitigate, you know, the headwinds we have received and we expect to, you know, to see the outcome coming forward. Having said that, as I have always said about this segment, the situation is very dynamic, and at this point in time, other than this, it will be difficult to comment any further.

Okay, sir. Thank you. Thank you. Our next question comes from the line of Kishore Kumar with the New Capital.

Sir, my question is on the ROA facility. I think we started this investment back in 21-22, and we implemented it over a period of 2-3 years now. So, when you are actually guiding for 25% of utilization in the coming years, what kind of customers are we actually targeting to get into? Do we already have some kind of off-take arrangement with them? Because when we actually started the implementation, we would have already got in touch with those customers. Are they new customers or existing customers? How do you see this actually trending out in the coming quarters?

The Roha facility was set up as we have said to cater to our exports market and the reason to set up a brand new facility over and above our existing facility in Angleshwar was to cater to more demand that we were receiving than what the capacity of the company was. So many of our existing customers both in India and abroad have been asking for more demand And then more volume. We expect that the Roha plant will be able to cater to that, and we would like to progressively increase our share of business with the customers. Soon now, with the Roha capability and capacity that we have. However, it is to be noted that these products all go into the production in the customers' processes, and to be included, there is a... This is a period of introduction cycle time that one has to respect, and our teams are working with our customers across the various geographies to see that we can cater to more of their demand from the Roha facility.

Are these customers traders or end users, sir?

So, it's a combination of OEMs as well as end users that we cater to.

Sir, my second question is a bookkeeping question. So, if I look at the other income for the last quarter, Q4, there is a significant increase in the numbers. Is there any one-off there, or is it a forex gain that we are actually accounting it in the other income?

In the fourth quarter, there is primarily two elements which has got included. One is the forex gain on exports, which we have accounted in this quarter. And also, we have claims in terms of our EPC contract, which were recognized during the quarter, that also is forming part of the other income.

Can you quantify it, sir, actually, if possible?

We'll not be able to quantify, but we can say the major chunk is comprising of these two elements in the other income.

And also on the other, sorry, order value that we actually quoted in the presentation, it's not including the Oman project that we actually got in view for, isn't it? Any reason for excluding it, sir?

The order info and the order backlog, what we are disclosing is primarily for the standalone entity, that is IonExchange. We do not include the subsidiary or any associated order flow or backlog in the numbers.

Got it, sir. Question comes from the line of Deepak with Sundaram Meechafan. Yeah, thank you for the follow-up.

Yes, thank you. Yeah, so I just want to double check on that chemical. So, earlier you highlighted that due to some logistical issues, there were some delay in dispatches. Hence, you know, chemical revenue has seen a minor decline in QOQ. Just wanted to know what was the revenue loss which happened in Q4 in chemical division because of these issues.

We do not give any specific numbers per se on the revenue loss what we have incurred on account of the West Asia crisis, but that crisis continues, so we are expecting that impact to continue in this quarter also till the time the logistics and the shipping lines resume. So let us wait and see. We will be able to share more details maybe at the end of the first quarter.

And so one question I had on engineering, so this new alliance or tech transfer of man and human membranes, just wanted to understand, means, who are we competing here, means, are we trying to dislodge any existing competitors through our connection and will be supplying this to the clients or is it entirely new product which is currently not being used in India and you're trying to... So push it forward because of some better technological advancement versus what is being currently used. And what can be the main primary application? Is it more towards, you know, power and steel or which kind of standard or substandard subsystems which this membranes will be going into?

So, first of all, these are not new products. These products Have been present in the market. However, I said that the membrane market is growing at the rate of 10% plus globally, which is one of the fastest growing segments in the wastewater treatment space. This particular initiative was done to complete our already existing membrane portfolio to make us one of the widest portfolio offerers in the world. In the membrane space, we compete with the global technology leaders like Dow, now DuPont, Hydronautics, Torrey, Veolia, as well as NanoHQ. These are all global players. We compete against them and we will compete against them in India as well as in all other global markets. The applications for these membranes are many. It is required for recycled reuse. It is required for wastewater treatment. It is required for desalination. It is required for brackish water. So there are many applications, you know, for these membranes across the entire range of reverse osmosis, ultrafiltration, nanofiltration, and has wide-ranging applications, membranes, and ion exchange technologies. Both of which the company has are the two best proven technology platforms on which water treatment and wastewater treatment solutions work. So we are confident to leverage the man and human partnership and the new technology absorption to be able to cater to the global market, both with existing and new customers.

Okay. And so what is our, you know, since you have highlighted about some of the competitors, what is our pitch here then? Is it that since we will be manufacturing in our existing facility, so we have certain cost advantage?

Yeah, either US or Japanese. So we are one of the only few companies except the Chinese who make those products. So this is clearly a huge investment and reinforcement of the Make in India dream of the government. This is also our answer of an Indian mission with a global vision. So we expect significant You know, increase in our revenues, in our growth, in our presence, not only in the domestic, but also in the international markets.

Sir, on the engineering front, since you mentioned about that large contract win, are we expecting any revenue to flow through in FY27 from that project? Since it's a longer project, I understand that, but are we anticipating any revenue booking in FY27?

We are expecting some revenue from that project. If you remember, this is actually a good concession we have received. So the revenues will come in terms of O&M revenue. A part of that revenue will start coming in slowly from this financial year. However, we would like to remind you that this revenue will come into our joint venture company in Oman and will be recognized. As part of our consolidated revenue earnings. So you will see at the end of the financial year that there will be a delta growth in our revenues in the Oman joint venture.

Thank you. Our next question comes from the line of data with Ingrid Equality.

Hello, sir. I want to again get back on the engineering segment. So, I think most of the issue with the margin compression in this segment was due to the Middle East operations. Is that correct?

So what we said is, we had a headwind or a challenge in the last quarter because of the West Asia crisis. The other challenges were because of the continuing legacy project and the slow progress of the UP project.

Okay, and I think UP was around, I think 300 CR of project was remaining. How much have we executed in this quarter?

As I said, the inflows, the project execution pace is dependent on the inflows that we receive from the government and the customer. Those inflows have started showing a positive trend upwards. Especially after the last budget, where the government reaffirmed its commitment to the scheme and extended the scheme for the next four years. Since then, we are seeing the fund flow slowly improving, and we hope that that continues, and then we will also be able to speed up the execution of the balance part of the project. But that will not get over in this financial year. It will at least take the next financial year to complete the project. And more so, the government has exchanged the project officially for the next four years. No, that was the original plan, but as we have all seen, the fund flow to the project was stopped, and the fund flow has only started from the last month. After the reaffirmation, of funds to the project by the government in the last budget.

Okay. And, like, can you just give me a bifurcation, like, how much of the engineering segment revenue was of this legacy Middle East and these projects? Like, what's with 30%, 40%, 50%? So, you know, like, the severity, like, can you give that number, if it's possible? I mean, the percentage of projects in the engineering segment that were related to your legacy projects or your Middle East projects that, you know, had an impact on the margins.

We just told you that the impact of the West Asia crisis on the engineering projects, especially the West Asia crisis was 60 crores that we already announced in the opening statement, and the others are in continuation with the same ratio as we had in the last few quarters, both the legacy projects as well as Thank you, sir.

Thank you so much.

Anyone who wishes to ask a question, I press star and 1. There are no further questions from the participant. I would like to end the conference over to the management for closing remarks. Thank you, and over to you, team.

Thank you all for participating in this earnings conference call. I hope we've been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our investor relations managers at Valorum Advisors. Thank you, and have a good day.

Thank you, ma'am. Ladies and gentlemen, on behalf of ION Exchange, India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.