Q1 2027 Ion Exchange (India) Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to the Ion Exchange India Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator 3: Ladies and gentlemen, good day and welcome to the Ion Exchange (India) Limited Q1 FY27 earnings 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 Valorem Advisors. Thank you, and over to you.

Operator: Ladies and gentlemen, good day and welcome to the Ion Exchange (India) Limited Q1 FY 2027 Earnings 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 Valorem Advisors. Thank you, and over to you.

Speaker #1: 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.

Speaker #1: I now hand the conference over to Ms. Purvangi Chen from Vellorum Advisors. Thank you, and over to you.

Speaker #2: Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Chen from Vellorum Advisors. We represent the investor relations of Ion Exchange (India) Limited.

Purvangi Jain: Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Ion Exchange (India) Limited. On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the company's special conference call on reclassification of reporting segments. Please note that the management would take questions on the reclassification of reporting segments from 2:00AM to 3:00PM, then the Q1 FY27 earnings call will start at 3:00PM till 4:00PM. In case the question and answer session on the reclassification of reporting segments concludes earlier, we will subsequently move into quarterly earnings. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's call may be forward-looking in nature.

Purvangi Jain: Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Ion Exchange (India) Limited. On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the company's special conference call on reclassification of reporting segments. Please note that the management would take questions on the reclassification of reporting segments from 2:00AM to 3:00PM, then the Q1 FY 2027 earnings call will start at 3:00PM till 4:00PM. In case the question and answer session on the reclassification of reporting segments concludes earlier, we will subsequently move into quarterly earnings. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's call may be forward-looking in nature.

Speaker #2: On behalf of the company and Vellorum Advisors, I would like to thank you all for participating in the company's special conference call on the reclassification of reporting segments.

Speaker #2: Please note that management will take questions on the reclassification of reporting segments from 2:00 p.m. to 3:00 p.m., and then the Q1 FY27 earnings call will start at 3:00 p.m. and go until 4:00 p.m.

Speaker #2: In case the question-and-answer session on the reclassification of reporting segments concludes earlier, we will subsequently move into quarterly earnings. Before we begin, let me mention a short cautionary statement.

Speaker #2: Some of the statements made in today's call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainty, which could cause actual results to differ from those anticipated.

Purvangi Jain: Such forward-looking statements are subject to risk and uncertainty, 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 reclassification of reporting segments and 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 call and hand it over to them for their opening remarks. We have with us Mr. Aankur Patni, Vice Chairman, Mr. Indraneel Dutt, Managing Director and CEO, Mr. Vasant Naik, Group Chief Financial Officer, and Ms. Nikisha Solanki, Company Secretary.

Speaker #2: Such statements are based on management's belief, as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision.

Speaker #2: The purpose of today’s reclassification of reporting segments and the earnings call is purely to educate and bring awareness about the company’s fundamental business and the financial quarter under review.

Speaker #2: Let me now introduce you to the management participating with us on today's call, and hand it over to them for their opening remarks. We have with us Mr. Ankur Patni, Vice Chairman; Mr. Indranik Dutt, Managing Director and CEO; Mr. Vasanth Naik, Group Chief Financial Officer; and Ms. Nikisha Solanki, Company Secretary.

Speaker #2: Without any delay, I request Mr. Indranik Dutt to start with his remarks on classification of segments. Thank you, and over to you, sir.

Purvangi Jain: Without any delay, I request Mr. Indraneel Dutt to start with his remarks on reclassification of segments. Thank you, and over to you, sir.

Speaker #3: Thank you, ma'am. Good afternoon, everyone, and thank you for joining us today. On behalf of our Vice Chairman, Mr. Ankur Patni, and the entire management team on the call, I extend a warm welcome to everyone participating today.

Indraneel Dutt: Thank you, ma'am. Good afternoon, everyone, and thank you for joining us today. On behalf of our Vice Chairman, Mr. Aankur Patni, and the entire management team on the call, I extend a warm welcome to everyone participating today. As was mentioned, today's interaction has been structured into two parts because of the reclassification that has happened, which is an extraordinary event. The first session for the first one hour, we would like to talk about the rationale and the strategic imperative behind the reclassification. We also already uploaded a presentation for the reclassification, which I'm sure all of you would have got a chance to take a look at. We will spend the one hour from 2:00PM to 3:00PM to take you through some of the pages of this presentation that has been uploaded.

Speaker #3: As was mentioned, today's introduction has been structured into two parts. Because of this reclassification that has happened, which is an extraordinary event, the first session, for the first one hour, we would like to talk about the rationale and the strategic imperatives behind the reclassification.

Speaker #3: And we have already uploaded our presentation for the reclassification, which I am sure all of you have had a chance to take a look at.

Speaker #3: We will spend the one hour from 2:00 to 3:00 taking you through some of the pages of this presentation that has been uploaded, and then we will be happy to take any questions that you may have regarding the presentation.

Indraneel Dutt: We will be happy to take any questions that you may have regarding that presentation. That hopefully will conclude the first segment of our conversation. From 3:00 PM, we will follow it up with a regular 1Q27 earnings conference call where we will discuss our operational financial performance under the revised reporting framework for the quarter just concluded, which is Q1 2027. That is the broad direction in which we will follow. I will request each one of you to refer to the presentation that has been uploaded. I will kind of cover it very briefly, giving an overview. Once that is done, that itself will explain a lot of the questions that you may have. Any further follow-up questions, we will be very happy to take and answer for you. Okay.

Speaker #3: That, hopefully, will conclude the first segment of our conversation. From 3:00, we will follow up with a regular Q1 2027 earnings conference call, where we will discuss our operational and financial performance under the revised reporting framework for the quarter just concluded, which is the first quarter of 2027.

Speaker #3: So that's the broad direction in which we will follow. So I will request each one of you to refer to the presentation that has been uploaded and I will kind of cover it very briefly giving an overview and once that is done and that itself will explain a lot of the questions that you may have.

Speaker #3: Any further follow-up questions, we will be very happy to take and answer for you. Okay. So, I refer to the overview, first page, where we've given the company snapshot. The company has been in operation for 62 years, in 50-plus countries.

Indraneel Dutt: I refer to the overview page one where we have given the company snapshot, where the company is into 62 years of operation in 50 plus countries. We have one of the largest service networks in Asia Pacific region. About 200,000 plus worldwide installations, including 3,000 plus core industrial projects with world-class manufacturing facilities and assembly hubs in many parts of the world, totally committed to sustainability across continents. The company's vision is to be the leader in our business, which is so vital to people's lives and the environment. As the next page will show, our total portfolio of water and environment management solutions cuts across the entire water cycle, right from pretreatment to water treatment which is both Ion Exchange Resins as well as membrane technology-based. We also are into industrial wastewater treatment, recycle, and zero liquid discharge.

Speaker #3: We have one of the largest service networks in the Asia-Pacific region, about 200,000-plus worldwide installations, including 3,000-plus core industrial projects. With world-class manufacturing facilities and assembly hubs in many parts of the world, totally committed to sustainability across continents.

Speaker #3: The company's vision is to be the leader in our business, which is so vital to people's lives and the environment. As the next page will show, our total portfolio of water and environment management solutions cuts across the entire water cycle—right from pre-treatment to water treatment—which is both ion exchange resin as well as membrane technology-based. We are also into industrial wastewater treatment, recycle, and zero liquid discharge.

Speaker #3: We also have applications for our products like special resins, adsorbents, membranes, and chemicals for various applications. We are also involved in sewage treatment, tertiary treatment, and sludge treatment, and we have our offerings on the drinking water side with our Zero Waste Consumer Products portfolio.

Indraneel Dutt: We also have applications for our products like special resins, adsorbents, membranes, chemicals for various applications. We also are into sewage treatment, tertiary treatment, sludge treatment, and we also have our offerings on the drinking water side with our Zero-B consumer products portfolio. The next page captures the core offerings of the company, which is broadly categorized into 12 parts. This is, again, I think, one of the first times we are showing our company in this way. This is also very unique because we believe that we are one of the very few companies, if not the only one in the world who has under their umbrella Ion Exchange Resins, membranes, as well as specialty chemicals.

Speaker #3: The next page captures the core offerings of the company, which are broadly categorized into 12 parts. This is, again, I think one of the first times we are showing our company in this way.

Speaker #3: This is also very unique because we believe that we are one of the very few companies, if not the only one in the world, who has under their umbrella ion exchange resins, membranes, as well as specialty chemicals.

Speaker #3: We also offer standard systems and plants, home water solutions, and digital solutions, and we are applying those products and offerings in water treatment, ultra-pure and high-purity water, wastewater treatment, as well as zero liquid discharge and related services.

Indraneel Dutt: We also offer standard systems and plants, home water solutions and digital solutions, and we are applying those products and offerings into water treatment, ultrapure high purity water, wastewater treatment, as well as zero liquid discharge and services. The next page, we have covered our capabilities. We talked about all of them. Across the product offerings, we are pretty much present in every aspect of water and wastewater treatment and solutions. The next three pages of the presentation covers our solutions offerings.

Speaker #3: On the next page, we've covered our capabilities. We talked about all of them. So, across the product offerings, we are pretty much present in every aspect of water and wastewater treatment and solutions.

Speaker #3: And then, the next three pages of the presentation cover our solutions offerings. Again, I would say that in our solutions, we span across one of the widest portfolios of offerings, including our original core solutions which cover pre-treatment, water treatment technologies, condensate polishing, wastewater recycle, reuse, sewage treatment, zero liquid discharge, and home water. These areas have typically been the base and the core foundations of the solutions the company has been offering for the last 60-plus years.

Indraneel Dutt: Again, I would say in our solutions, we span across one of the widest portfolio of offerings across our original core solutions, which covers our pretreatment, water treatment technologies, condensate polishing, wastewater recycle, reuse, sewage treatment, zero liquid discharge, and home water, which typically has been the base and the core foundations of solutions that the company has been offering for the last 60 plus years. Over the last few years, the company has moved into the advanced solution portfolio, where we offer our solutions in seawater desalination. We have seen those projects we have done in various parts of the world, including in Morocco in the last couple of years. We've also gone into ultrapure water. A lot of questions have been asked in the past on our ultrapure water solutions that we've offered in solar and also in Semiconductor Mohali quite some time back.

Speaker #3: Over the last few years, the company has moved into the advanced solutions portfolio, where we offer our solutions in seawater desalination. We have seen those projects that we have done in various parts of the world, including in Morocco in the last couple of years.

Speaker #3: We've also gotten into ultra-pure water. A lot of questions have been asked in the past on our ultra-pure water solutions that we've offered in solar and also in semiconductor Mohali, quite some time back.

Speaker #3: And then our solutions on the pharma side in high-purity water. We've also gotten into technologies for advanced oxidation, for wastewater treatment, for produced water treatment, and our new applications in applied ion exchange and wellness solutions like hydrogen water and alkaline water, in the wellness range for the Zero Waste product line.

Indraneel Dutt: Then our solutions on the pharma side in high purity water. We've also got into technologies on advanced oxidation for wastewater treatment, for produced water treatment, and our new applications in applied ion exchange, and wellness solutions of hydrogen water and alkaline water on the wellness range for the Zero-B product line. In addition to that, the company is currently working on emerging solutions, which are the latest areas of focus on water, wastewater treatment, and resource recovery across the world. Whether it comes in brine valorization, in lithium extraction, in destroying forever chemicals or PFAS, not only in terms of PFAS treatment, plus also absorption and destruction using various technologies, including foam fractionation. The company is also gotten into new energy solutions, which is into high purity DM water for electrolyzers, for green hydrogen applications, and also offering integrated electrolyzer and BOP solutions.

Speaker #3: In addition to that, the company is currently working on emerging solutions, which are the latest areas of focus in water and wastewater treatment and resource recovery across the world. Whether it comes to brine valorization, lithium extraction, or destroying 'forever chemicals' or PFAS—not only in terms of PFAS treatment, but also absorption and destruction using various technologies, including foam fractionation.

Speaker #3: The company is also going into new energy solutions, which includes high-purity drinking water for electrolyzers for green hydrogen applications, and also offering integrated electrolyzer and BOP solutions.

Speaker #3: The company is also geared up to offer solutions in semiconductors as well as for data centers, with cooling water treatment solutions, high-efficiency RO and softening systems, and is also looking at technologies like direct liquid cooling.

Indraneel Dutt: The company is also geared up to offer solutions in semiconductor as well as for data centers with cooling water treatment solutions, high efficiency RO and softening systems, and also looking at technologies like direct liquid cooling. Then the all-encompassing area that the company is working with on digital solutions and portfolio, where we're trying to offer IoT-enabled smart products and offerings, and allowing our customers and our access to both remotely monitor, connected, analyzed, as well as optimized for predictive future monitoring. In terms of our global presence, we are present in certain 50-plus countries. 30% of the company's revenue come from our international markets. We have 14 global manufacturing and assembly facilities with 200,000-plus installations. The next page talks about all our project locations.

Speaker #3: And then the all-encompassing area that the company is working on is on digital solutions and portfolio, where we are trying to offer IoT-enabled smart products and offerings, allowing our customers access to systems that can be monitored, connected, analyzed, as well as optimized for predictive, future monitoring.

Speaker #3: In terms of our global presence, we serve in over 50 countries. Thirty percent of the company's revenue comes from our international markets. We have 14 global manufacturing and assembly facilities with over 200,000 installations.

Speaker #3: The next page talks about all our project locations, so we’ve just shown that apart from India, the company is present in many markets across the Middle East, Asia Pacific, and in various parts of Africa.

Indraneel Dutt: It just shows that apart from India, the company is present in many markets across Middle East, Asia Pacific, and in various parts of Africa. We've also given a quick glimpse of our manufacturing facilities. You could see all our facilities both in India as well as overseas in those subsequent slides, whether it is our resin manufacturing plant in Ankleshwar. The new plant, this is our first visuals of the new plant. We talked about Roha quite a bit, but this shows a glimpse of the resin plant that has come up in Roha in Maharashtra. It also shows our membrane manufacturing center of excellence in Goa, our specialty chemicals plant in Patancheru in Hyderabad, which is our mother facility for specialty chemicals. Then we also have our blending facilities in Saudi Arabia in Dammam, which is operational, as well as in Mapril in Portugal.

Speaker #3: We've also given a quick glimpse of our manufacturing facilities. You could see all our facilities, both in India as well as overseas, in those subsequent slides—whether it is a resin manufacturing plant in Ankleshwar or the new plant.

Speaker #3: This is our first visual of the new plant. We’ve talked about Roha quite a bit, but this gives a glimpse of the resin plant that has come up in Roha, Maharashtra.

Speaker #3: It also shows our membrane manufacturing center of excellence in Goa, our specialty chemicals plant in Patancheru in Hyderabad, which is a mother facility for specialty chemicals.

Speaker #3: And then we also have our blending facilities in Saudi Arabia, in Dammam, which is operational, as well as in Mapril in Portugal. Our standard plants are there in Hosur, in Verna, Goa, and in Wada, Maharashtra. We have large assembly centers—one of them is in Palaspay in Maharashtra—and smaller assembly centers in Sharjah, in South Africa, in Indonesia, and in Bangladesh.

Indraneel Dutt: Our tanker plants are there in Hosur, in Verna, Goa, in Wada, Maharashtra, and we have large assembly centers. One of them is in Palaspe in Maharashtra and smaller assembly centers in Sharjah, in South Africa, in Indonesia, and Bangladesh. Innovation is at the core of the company. The R&D facility of the company was founded in 1965 with 50-plus patents till date and 100-plus products launched. This is India's one of the oldest water-focused research center and working across all technologies of water treatment and wastewater treatment, including resins, chemicals, membranes, and focused on offering sustainable solutions for industries and communities. We've also given a glimpse of some of our marquee clients. Most of them are India-focused. We have another similar page for outside India, which is typically not put up in this deck. Given a glimpse in the presentation about our human capital.

Speaker #3: Innovation is at the core of the company. The R&D facility was founded in 1965, with over 50 patents to date and over 100 products launched.

Speaker #3: This is one of India's oldest water-focused research centers, working across all technologies of water treatment and wastewater treatment, including resins, chemicals, and membranes, and focused on offering sustainable solutions for industries and communities.

Speaker #3: We've also provided a glimpse of some of our marquee clients—most of them are India-focused. We have another similar page for clients outside India, which is typically not included in this deck.

Speaker #3: And then, given a glimpse in the presentation about our human capital: we are a team of about 3,500-plus professionals, with competencies and capabilities spread across 15-plus countries, with competencies in EPC and projects—over 650-plus people; in product and manufacturing—over 600-plus people; in consumer and retail, which is our Zero Waste product line.

Indraneel Dutt: We are a team of over 3,500-plus professionals with competencies and capabilities spread across 16-plus countries, with competencies in EPC and projects, over 650-plus people. In product and manufacturing, over 600-plus people. In consumer and retail, which is our Zero-B product line, we are over 1,400-plus people. Services and chemicals and corporate functions make up the rest. In the next section, we have tried to talk about some of the investments that the company has been doing over the past six to seven years, that is one of the rationale which has led to this reclassification of our reporting numbers.

Speaker #3: We have about 1,400-plus people, and then services, chemicals, and corporate functions make up the rest. In the next section, we have tried to talk about some of the investments that the company has been making over the past six to seven years, and that is one of the rationales which has led to this reclassification of our reporting numbers.

Speaker #3: We've all been talking about the Roha facility, for which we showed a picture earlier, and some other parts of the plant, where the capacity expansion for our flagship business, the ion exchange resins, has increased by five times.

Indraneel Dutt: We've all been talking about the Roha facility, where we've shown a picture earlier, which is another part of the plant, where the capacity expansion for our flagship business, the Ion Exchange Resins, has increased by five times through the setting up of the Roha plant, which is currently commissioned and going to stabilization and ongoing production increase. It expands our conventional resin capacity to support future growth. It will help us increase our share of the global market from current to at least by four times to get to double-digit numbers. This also establishes India's first non-solvent resin manufacturing facility, which is again doing away with solvent-based resin manufacturing, again, a first of its kind in India and one of the more sought-after product lines globally.

Speaker #3: Through the setting up of the Roha plant, which is currently commissioned and going through stabilization and ongoing production increase, it expands our conventional resin capacity to support future growth.

Speaker #3: It will help us increase our share of the global market from the current level to at least four times, to get to double-digit numbers. This also establishes India's first non-solvent resin manufacturing facility, which is different from other solvent-based resin manufacturing—again, a first of its kind in India, and one of the more sought-after product lines globally.

Speaker #3: And it is also working towards establishing an integrated spent acid recovery plant, which will be a global first and will help us become a more circular-driven, sustainable company.

Indraneel Dutt: It also is working towards establishing an integrated spent acid recovery plant, which will be a global first and will help us become a more circular-driven sustainable company. Clearly, Roha gives us technology leadership, circular manufacturing, a five times capacity expansion and future-ready operations. This, along with our existing plant in Ankleshwar, positions the company greatly, this is, I think, one of the biggest investments that the company has made, and we are going to very soon see the full results of Roha shaping up over the next few years as we have been talking about in past investor calls. The second area where we are building scale is on pharma resins. This is again happening in Ankleshwar. Our pharma resin factory is FDA approved, and the capacity expansion plan is six times.

Speaker #3: So clearly, Roha gives us technology leadership, circular manufacturing, a five-times capacity expansion, and future-ready operations. This, along with our existing plant in Ankleshwar, positions the company greatly.

Speaker #3: And this is, I think, one of the biggest investments that the company has made, and we are going to very soon see the full results of Roha shaping up over the next few years, as we have been talking about in past investor calls.

Speaker #3: The second area where we are building scale is on pharma resins. This is again happening in Ankleshwar. Our pharma resin factory is FDA approved.

Speaker #3: And the capacity expansion plan is six times. And there also, it will help us expand our product portfolio with the new weak acid cation and the acrylic anion resin grades. The enhanced FDA-approved manufacturing facility helps us deliver products globally to our customers, for the pharma customers.

Indraneel Dutt: There also, it will help us expand our product portfolio with the new Zircatic cation and the acrylic anion resin grades. The enhanced FDA-approved manufacturing facility helps us deliver products globally to our customers for the pharma customers. Also, this improves and gives us a much more repeatable, stringent, responsive, future-ready process and product line with pharma resins, which is currently within our resin product line overall. This helps us expand our portfolio of offerings, increases the capacity by six times, helps in import substitution in India, where we can supply to many of the Indian pharma customers and also allows us to be the third player only in the world who can cater to this kind of resin applications in the global market.

Speaker #3: This also improves and gives us a much more repeatable, strengthened response to future-ready processes and product lines with farmer resins, which is currently within our resin product line overall.

Speaker #3: This helps us expand our portfolio of offerings, increases the capacity by six times, helps in import substitution in India—where we can supply to many of the Indian pharma customers—and also allows us to be the third player in the world who can cater to this kind of resin applications in the global market.

Speaker #3: The other area that the company has been expanding significantly is on building scale in membrane manufacturing in Goa, where we are putting the entire comprehensive range of membranes right from reverse osmosis, ultra filtration, nano filtration, and MBR membranes in production the company also got into a tie-up to get this full range with man and human.

Indraneel Dutt: The other area that the company has been expanding significantly is on building scale in membrane manufacturing in Goa, where we are putting the entire comprehensive range of membranes, right from reverse osmosis, ultrafiltration, nanofiltration, and MBR membranes in production. The company also got into a tie-up to get this full range with MANN+HUMMEL, for our ultrafiltration PVDF technology. Overall, the plan is to have a three times business growth over the years. This kind of a range that we are building in membranes in our Goa facility, the second plant is coming up, we will be the only manufacturer in India who has the full range of integrated membrane facilities in the country with our own casting and coating lines, with our hollow fiber technologies on UF and with our strategic partnerships with MANN+HUMMEL.

Speaker #3: For our ultrafiltration PVDF technology, and overall, the plan is to have a three-times business growth over the years. With this kind of range that we are building in membranes in the Goa facilities, our second plant is coming up.

Speaker #3: We'll be the only manufacturer in India to have the full range of integrated membrane facilities in the country, with our own casting and coating lines, with our hollow fiber technologies on UF, and with our strategic partnerships with Mann+Hummel.

Speaker #3: The company is also building scale on the standard systems portfolio. And all the three factories across Hosur, Goa, and Wada have had investments being made, where capacities have been expanded multiple times.

Indraneel Dutt: The company is also building scale on the standard systems portfolio, all the three factories across Hosur, Goa, and Wada have had investments being made, where capacities have been expanded multiple times. Both our membrane business and the standard plants business is a part of the industrial product portfolio. That shows that on the industrial product side, apart from consumer products, the company has been slowly increasing scale and building capacity and expanding the portfolio. We believe that both the standard systems business as well as the membranes entire product portfolio will help us significantly ramp up our industrial products range, which has so far been clubbed within the engineering segment of the company. The other area that the company has been working on is on building scale in services, where we having had already 200 plus operation maintenance contracts, we have a significant reach.

Speaker #3: Both our membrane business and the standard plants business are part of the industrial product portfolio. So that shows that, on the industrial products side, apart from consumer products, the company has been slowly increasing scale and building capacity.

Speaker #3: And expanding the portfolio. We believe that both the standard systems business as well as the membranes' entire product portfolio will help us significantly ramp up our industrial products range, which has so far been clubbed within the engineering segment of the company.

Speaker #3: The other area that the company has been working on is building scale in services. We have already had 200-plus operation and maintenance contracts. We have significant reach—as I said in the beginning, we have one of the largest service networks in the Asia Pacific region.

Indraneel Dutt: As I said in the beginning, we have one of the largest service network in the Asia Pacific region. We have 30,000 plus customers served with a pan-India presence, also we are moving towards more of BOOT, BOO, rental, and water-as-a-service solutions. All of this will help us offer a comprehensive ring-to-ring service offerings in the water and the wastewater segment, both in India and overseas. Case in point was the order that the company won in Oman with Petroleum Development Oman, which was a comprehensive 20-year O&M contract concession that the company will be executing. That is how we are trying to build the service portfolio significantly across geographies, across the offerings, and across the solutions given.

Speaker #3: We have 30,000-plus customers served. We have a pan-India presence. And also, we are moving towards more of BOOT, BOO, rental, and water-as-a-service solutions.

Speaker #3: So all of this will help us offer a comprehensive, wing-to-wing service offering in water in India and overseas. Case in point was the order that the company won in Oman with Petroleum Development Oman.

Speaker #3: This was a comprehensive 20-year O&M contract concession that the company will be executing. That is how we are trying to significantly build this service portfolio—across geographies, across offerings, and across the solutions given.

Speaker #3: The last part of building scale we have witnessed is through our zero-day home water solutions range, where we have been growing at a significant rate of over 30%.

Indraneel Dutt: The last part of building scale we have witnessed that is through our Zero-B home water solutions range, where we have been growing at a significant rate of 30-odd percent, 30%+. We have been expanding with our product portfolios from filters to purifiers, to lab water purifiers, to water softeners, to on-the-go purifiers, heat pumps. The range keeps on growing across 700+ cities being covered, 2,000+ trained engineers, and a pan-India presence. We have also expanded into adjacent markets like Nepal. We also are exploring how we can expand into neighboring markets like Sri Lanka and Bangladesh. With all of this, our current reporting was into Engineering, Chemicals, and Consumer Products. In the past, we have talked mostly about our Engineering business.

Speaker #3: We have been expanding with our product portfolios—from filters to purifiers, to lab water purifiers, to water softeners, to on-the-go purifiers, to heat pumps—so the range keeps on growing, across 700-plus cities being covered.

Speaker #3: 2,000-plus trained engineers and a pan-India presence. And we are also expanded into adjacent markets like Nepal, we also are exporting how we can expand into neighboring markets like Sri Lanka and Bangladesh.

Speaker #3: So, with all of this, our current reporting was into engineering, chemicals, and consumer products. In the past, we have talked mostly about our engineering business.

Speaker #3: But what you'll find is, in the new reporting system, the engineering segment has been broken up into treatment solutions, industrial products, and lifecycle services.

Indraneel Dutt: What you will find is in the new reporting system, the Engineering segment has been broken up into Treatment Solutions, Industrial Products, and Life Cycle Services. All of these three are very important for us. In the presentation you saw that across the Treatment Solutions range, right from core solutions, we've moved on to advanced solutions, and also getting the emerging solutions of resource recovery, lithium extraction, new energy. All of these are very important, and the company is already positioning itself to be able to get a significant share of those business from both Indian as well as global markets. We talked about how we are expanding and how we've invested in our product portfolio across membranes and standard plants, and that is where we'll be able to show you progress for the Industrial Product segment going forward with standalone segment.

Speaker #3: All of these three are very important for us. In the presentation, you saw that across the treatment solutions range, right from core solutions, we have moved on to advanced solutions and also getting into emerging solutions of resource recovery, lithium extraction, and new energy. All of these are very important.

Speaker #3: And the company is already positioning itself to be able to get a significant share of those businesses from both Indian as well as global markets.

Speaker #3: We've talked about how we are expanding and how we've invested in our product portfolio across membranes and standard plants. That is where we'll be able to show you progress for the industrial product segment going forward as a standalone segment.

Speaker #3: We've also talked about how we are building our scale in services—across geographies, across the portfolio, across technologies. That is why we wanted to share our lifecycle services business segment and report that separately for you.

Indraneel Dutt: We also talked about how we are building our scale in services across geographies, across the portfolio, across technologies, and that is why we wanted to share our Life Cycle Services business segment and report that separately for you. Our Chemicals segment continues with specialty chemicals. The composition remains the same of industrial resins, pharma resins, specialty chemicals, water treatment specialty chemicals, and also process chemicals. The Consumer Product segment remains the same. Only the institutional product line has moved out of the Consumer segment towards Industrial Products. That's the classification we have done.

Speaker #3: Our chemicals segment continues with specialty chemicals. The composition remains the same with industrial resins, pharma resins, and specialty chemicals; water treatment specialty chemicals, and also process chemicals.

Speaker #3: And the consumer product segment remains the same. Only the institutional product line has moved out of the consumer segment towards industrial products. So that's the classification we have done, again emphasizing the fact that the company is much more than just chemicals, consumer products, and engineering.

Indraneel Dutt: Again, emphasizing the fact that the company is much more beyond Chemicals, Consumer Products, and Engineering, that beyond EPC and projects, the company is moving, pivoting more towards Treatment Solutions, advanced Treatment Solutions, emerging Treatment Solutions into membranes, standard plants, and products, and also into Life Cycle Services, offering the most comprehensive range of Life Cycle Services. This is how the current and the new reporting segments are structured. This page, for those of you who can refer to our presentation, will give you very good clarity of how we were reporting the businesses earlier and how we are starting to report the company from this financial quarter. The next page covers a little bit more of the reporting segments. It's again a classification of what we've talked about in the past few pages.

Speaker #3: That beyond EPC and projects, the company is moving or pivoting more towards treatment solutions—advanced treatment solutions, emerging treatment solutions—into membranes, standard plants, and product.

Speaker #3: And also into lifecycle services, offering the most comprehensive range of lifecycle services. So, this is how the current and the new reporting segments are structured.

Speaker #3: This page, for those of you who can refer to our presentation, will give you very good clarity of how we were reporting the businesses earlier and how we are starting to report the company from this financial quarter.

Speaker #3: And the next page covers a little bit more of the reporting segments. It is, again, a classification of what we have talked about in the past few pages.

Speaker #3: So it just again shows all of the readers and those on the call how the treatment solutions, industrial products, lifecycle services, specialty chemicals, and the consumer products offerings are stacked up.

Indraneel Dutt: It just again shows all of the readers and those on the call how the Treatment Solutions, Industrial Products, Life Cycle Services, Specialty Chemicals, and the Consumer Products offerings are stacked up. The next few pages just talk about how the breakup of the businesses has been. Again, some of this we can even cover as part of the Q&A, but you will see that our Treatment Solutions business has grown significantly year-over-year. If you look at the CAGR over the last four years, the Treatment Solutions business has grown at a rate of 23%. This just shows our continued focus on this segment. That's kind of our mothership. That's the strategy for us to get into projects, and then we execute through services, we execute through Specialty Chemicals which are all required to run those plants. We execute through membranes.

Speaker #3: The next few pages just talk about how the breakup of the businesses has been, and again, some of this we can even cover as part of the Q&A.

Speaker #3: But you will see that our Treatment Solutions business has grown significantly year over year. If you look at the CAGR over the last four years, the Treatment Solutions business has grown at a rate of 23%.

Speaker #3: This just shows our continued focus on this segment. That's kind of our mothership. That's the strategy for us to get into projects and then execute through services. We execute through specialty chemicals, which are all required to run those plants.

Speaker #3: We execute through membranes. Here, the EBIT has gone the other way and we have discussed this at length in many of our investor calls. We have talked about some legacy projects. We talked about the UP project, where the profitability has taken a hit.

Indraneel Dutt: Here, the EBIT has gone the other way. We have discussed about this at length in many of our investor calls where as we have talked about some legacy projects, we talked about the UP project where the profitability has taken a hit, which is what you typically see in this page on Treatment Solutions. On the Industrial Products, again, you will see it's a 9% CAGR, a little bit of softening in the last year, otherwise the numbers would have looked far better. There was some impact because of the West Asia crisis. We could not keep up on the same rate of growth. Again, a little bit of softening due to some investments in the last year, but there also the CAGR had grown for the last four years, slight dip in the current year, which we expect to overcome in the current financial year.

Speaker #3: Which is what you typically see on this page on treatment solutions. On the industrial products side, again, you will see it's a 9% CAGR, with a little bit of softening in the last year.

Speaker #3: Otherwise, the numbers would have looked far better. There was some impact because of the West Asia crisis. We could not keep up the same rate of growth.

Speaker #3: And again, there was a little bit of softening due to some investments in the last year. But even there, the CAGR had grown over the last four years.

Speaker #3: There was a slight dip in the current year, which we expect to overcome in the current financial year. On lifecycle services, I think it’s a good story—10% growth in revenue.

Indraneel Dutt: On Life Cycle Services, I think a good story. 10% growth in revenue over the last few years, now that we are reporting these numbers, segments separately, but a very, very positive, healthy 21% in a growth in CAGR over the year of the last four years. Specialty Chemicals and the Consumer Products, those two segments are the same as we've reported in the past, nothing new to talk about except the fact that both Specialty Chemicals has recorded double-digit growth in both the top-line revenue as well as on the profitability EBIT. While Consumer Products has been a very strong growth story, however, the profitability has been down. We have talked about how our plan is to come back and break even in this financial year. With that, I come to the end of the overall presentation.

Speaker #3: Over the last few years, now that we are reporting these numbers and segments separately, we have seen a very, very positive and healthy 21% growth in CAGR over the period of the last four years.

Speaker #3: Specialty Chemicals and the Consumer Products — those two segments are the same as we've reported in the past, so nothing new to talk about except the fact that both Specialty Chemicals has recorded double-digit growth in both the top-line revenue as well as on the profitability (EBIT).

Speaker #3: While consumer products has been a very strong growth story, the profitability has been down, and we have talked about how our plan is to come back and break even in this financial year.

Speaker #3: So, with that, I come to the end of the overall presentation. I wanted to give a voice-over for the pages that you would have seen.

Indraneel Dutt: I wanted to give a voice-over the pages that you would have seen. We'll be happy to take any questions that you may have around the reclassification beyond what I talked about just now on the call.

Speaker #3: We will be happy to take any questions that you may have regarding the reclassification beyond what I just discussed on the call.

Speaker #1: Thank you, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 3: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press * and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Surbhi Gupta with Greenidge Asset Managers. Please go ahead.

Operator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press * and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Surbhi Gupta with Greenidge Asset Managers. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handset while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Subhi Gupta with Three Data Asset Managers.

Speaker #1: Please go ahead.

Speaker #3: Good afternoon, sir. So, my first question is regarding the Portugal market. After our acquisition there, how is that market progressing, and what is the market scope that we see?

Surbhi Gupta: Good afternoon, sir. My first question is regarding the Portugal market. After our acquisition there, how is that market sort of progressing and what is the market scope that we see? If you could just comment on the margins that we would be getting from that specific market. Thank you.

Speaker #3: Also, if you could just comment on the margins that we would be getting from those markets—that specific market. Thank you.

Indraneel Dutt: Sorry, if you could repeat, ma'am. Which particular market segment you're talking about?

Speaker #2: Sorry, could you please repeat, ma'am? Which particular market segment are you talking about?

Speaker #3: So Portugal, Portugal—Spain and Portugal—we had this acquisition, so we were going to expand in Europe. So I just wanted to understand the margins and scope of expansion there.

Surbhi Gupta: Sir, Portugal. Spain and Portugal, we had this acquisition. We were going to expand in Europe, and just wanted to understand margins and scope of expansion there.

Speaker #2: So, that business was acquired about three years back, and I think we have completed the integration of that product line. I believe we have teams well trained on Ion Exchange products and solutions offering.

Indraneel Dutt: That business was acquired about 3 years back, and I think we have completed the integration of that product line, and I think we have got teams well-trained on Ion Exchange products and solutions offerings. We see good potential of growth for all our resins, chemicals, membranes portfolio. We also have participated in pursuits on the solution side of the business, and we have got also a project that we are executing right now. Clearly, there is more potential than what we have in mind so far, and the team continues to work to see that the full potential of growth and opportunity that exists in the South Europe Iberian market as well as in the North African market, which can be catered to also from that entity are fully leveraged.

Speaker #2: We see good potential for growth for all our resins, chemicals, and membranes portfolio. We've also participated in pursuits on the street on the solutions side of the business, and we also have a project that we are executing right now.

Speaker #2: Clearly, there is more potential than what we have mined so far, and the team continues to work to see that the full potential of growth and opportunities that exist in the South Europe Iberian market, as well as in the North African market—which can also be catered to from that entity—are fully leveraged.

Speaker #2: The company continues to see significant upside opportunities from that acquisition for Ion Exchange, and we continue to work towards that. We believe that the success from those countries, those geographies, in the next two to three years will be significantly more.

Indraneel Dutt: The company continues to see significant upsell opportunities from that acquisition for Ion Exchange, and we continue to work towards that, and we believe that the success from those countries, those geographies in the next 2 to 3 years will be significantly more.

Speaker #3: So, if you could just quantify the margins, in terms of, like, what is the incremental margin that we could get from there? Is it similar to our profile here, or will there be a difference?

Surbhi Gupta: Sir, if you could just quantify the margins in terms of what is the incremental margin that we could get from there. Is it similar to our profile here, or will there be a difference?

Speaker #2: So, we typically, ma'am, don't talk about specific margins for particular geographies, but I would say that, again, it varies segment to segment. We talked about the five segments; four of the five segments are present there.

Indraneel Dutt: We typically, ma'am, don't talk about specific margins for particular geography. I would say that again, it varies segment to segment. We talked about the 5 segments. The 4 of the 5 segments are present there. They're not the consumer products business. That varies segment to segment. Overall, the margins will be similar, if not better than what we see in India.

Speaker #2: They're not in the home or the consumer products business. That varies segment to segment, but overall the margins will be similar, if not better, than what we see in India.

Speaker #3: Okay sir. Thank you.

Surbhi Gupta: Okay, sir. Thank you.

Speaker #1: Thank you. The next question comes from the line of Pratik Kothari with Unique PMS. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Pratik Kothari with Unique PMS. Please go ahead.

Operator: Thank you. The next question comes from the line of Pratik Kothari with Unique PMS. Please go ahead.

Speaker #4: Hi. Good afternoon and thank you. So my first question regarding this reclassification. If you just go through what led to this and why this reclassification any corporate action per se that you expect on this just thoughts behind doing this.

Pratik Kothari: Hi, good afternoon, and thank you. My first question regarding this reclassification. If you just go through what led to this, and why this reclassification, any corporate action per se that you expect on this? Just thoughts behind doing this.

Speaker #2: So it's just that the engineering segment was not reporting the full—giving the full color of what was inside engineering. And it was, to a certain extent, construed as a projects business, but we had a very robust products business within it.

Indraneel Dutt: It's just that the engineering segment was not giving the full color of what was inside engineering. It was to a certain extent construed as projects business, but we had a very robust products business within it. We had a very growing services business within it. Then our pivot towards more solutions and advanced emerging solutions offerings. That is what we wanted to show separately because at a console level, what we were able to share with you was a combination of these three segments that were reported as engineering.

Speaker #2: We had a very growing services business within it, and then our pivot towards more solutions and advanced emerging solutions offerings. So, that is what we wanted to show separately, because at a console level, what we were able to share with you was a combination of these three segments.

Speaker #2: That were reported as engineering. Now, I think those interested in the company will be able to see all these three aspects of the company in terms of the growth of life cycle services as repeatable revenues, life cycle revenues, the growth of our industrial products portfolio beyond the consumer products that they've been reporting, and then the growth and performance of our treatment solution business.

Indraneel Dutt: I think those interested in the company will be able to see all these three aspects of the company in terms of the growth of lifecycle services as repeatable lifecycle revenues, the growth of our industrial products portfolio beyond the consumer products that we've been reporting, and the growth and performance of our treatment solutions business.

Speaker #4: Sorry. Any thoughts on kind of listing this separately—I mean, the three different divisions that we have for any activity in there? I mean, any such thought?

Pratik Kothari: Any thoughts on kind of listing this separately? I mean, three different divisions that we have or any activity in there? Any such thought?

Speaker #2: Right now, there is none. Right now, I think the objective is only to offer more transparency, to share with you the investments, because we have only talked about investments largely made in Roha. But there have been investments made in other parts of the company, and we want to share with you, very openly and transparently, the growth that we anticipate and expect to see in these segments that we have not talked about.

Indraneel Dutt: Right now there is none. Right now, I think the objective is only to offer more transparency to share with you the investments, because we've only talked about investments largely made in Roha, but there have been investments made in other parts of the company, and we want to share with you very openly and transparently the growth that we anticipate and expect to see in these segments that we have not talked about. We believe that with this reclassification, about 60% of the company will comprise of products, chemicals, and services, and the treatment solutions will be approximately 40% of the company.

Speaker #2: We believe that with this reclassification, about 60% of the company will comprise products, chemicals, and services, and the treatment solutions will be approximately 40% of the company.

Speaker #2: So, a lot of work, a lot of investment, and a lot of management bandwidth has been spent over the last five to six years in growing the products, the specialty chemicals, and the services portfolio of the company.

Indraneel Dutt: A lot of work, a lot of investment, a lot of management bandwidth has been spent over the last five to six years in growing the products, specialty chemicals, and the services portfolio of the company that we feel are now substantive enough to stand on their own feet and be reported separately as individual segments to our investors, while continuing to maintain our focus on treatment solutions. As new technologies emerge, we want to be on the forefront of treatment solutions as well. Right now, to answer your question, there's no separate corporate action plan. It is more at offering more transparency and more perspective and color of how the company's performing across these segments.

Speaker #2: That we feel are now substantive enough to stand on their own feet and be reported separately as individual segments to our investors, while continuing to maintain our focus on treatment solutions. As new technologies emerge, we want to be on the forefront of treatment solutions as well.

Speaker #2: But right now, to answer your question, there's no separate corporate action plan. It is more about offering more transparency and more perspective and color on how the company is performing across these segments.

Speaker #4: No, thank you for that. That's highly appreciated. Just one clarification on this Roha slide, which I think is slide 23. We have mentioned a 5X capacity expansion.

Pratik Kothari: No, thank you for that. That's highly appreciated. Sir, one clarification on this Roha slide, which is I think slide 23. We have said 5X capacity expansion. Is this for one specific product? Because our understanding was we are doubling the resins capacity. If you can clarify this 5X number.

Speaker #4: So is this for one specific product? Because our understanding was we are doubling the resin's capacity. So, if you can clarify this 5x number.

Speaker #2: So, this is a global number. Okay, so we are talking about actually becoming a bigger global player in the market. And these, again, are broader numbers you could look at, based on how you define the global resin market.

Indraneel Dutt: This is a global number. Okay, we are talking about actually becoming a bigger global player in the market, and this again, our broader numbers, you could look at based on how you define the global resin market. What we're trying to say is, we expect through the Roha plant and the ongoing Ankleshwar plant, that we are aspiring to take 10% of the global resin volume, which I think is a fairly big aspiration from that perspective.

Speaker #2: But what we're trying to say is, we expect, through the Roha plant and the ongoing Ankleshwar plant, that we are aspiring to take 10% of the global resin volume, which I think is a fairly big aspiration from that perspective.

Speaker #4: No, the point—again, sorry, but coming back to this. Last year, we had called out about ₹500 crore of resin revenue in our chemical business, roughly, give or take.

Pratik Kothari: No, the point taken, sorry, coming back on this. Last year we had called out about INR 500 crores of resin revenue in our chemical business, roughly, give or take. When we say 5X capacity expansion, what does that mean?

Speaker #4: So, when we say 5x capacity expansion, what does that mean?

Speaker #2: No, sir. That means when I said that, this is not just for Roha. This is for Roha and Ankleshwar together, for the entire resin business.

Indraneel Dutt: That means when I said that this is not just for Roha, this is for Roha, Ankleshwar together, for the entire resin business. We believe that, with all debottlenecking done and the final capacity that we may get, we will end up with the total resin capacity across both the plants will be 5x together of what we had in the past.

Speaker #2: We believe that with all debottlenecking done and the final capacity that we may get we will end up with the total resin capacity across both the plants will be five times together of what we had in the early in the past.

Speaker #4: So just to reconfirm, the ₹500 crore of resin revenue that we did last year—what we are seeing is, post this debottlenecking in Roha, we can do ₹2,500 crore.

Pratik Kothari: Just to reconfirm, INR 500 crores of resin revenue that we did last year, what we are saying is post this debottleneck in Roha, we can do INR 2,500 crores?

Speaker #2: No, no. That was for the entire chemical segment. Our chemical segment includes the specialty chemicals business as well.

Indraneel Dutt: No, no. That was for the entire chemical segment. Our chemical segment includes the specialty chemicals business also.

Speaker #4: No, that's correct. So, last year, specialty chemicals reported about ₹900 crore of revenue, give or take. ₹500 crore of that was resins, and ₹400 crore was water chemicals.

Pratik Kothari: No, correct, last year, specialty chemicals, we reported about INR 900 crores of revenue, give or take. INR 500 crores of that was Ion Exchange Resins, INR 400 crores was water chemicals.

Speaker #4: So what is it that.

Speaker #2: We have not given a segment breakup like that, but what we are saying is that together, this gives us a significant capacity expansion post-debottlenecking to be able to go after that market.

Indraneel Dutt: We have not given a segment breakup like that. What we are saying is that this together, this gives us a significant capacity expansion post debottlenecking to be able to go after that market.

Speaker #4: No, I'll take this offline if required. And the second, on these quarterly results—do we come back on that view, or should I ask that now?

Pratik Kothari: I'll take this offline if required.

Indraneel Dutt: Sure

Pratik Kothari: Depending on this quarterly results, do we come back on that view, or should I ask that now for the numbers?

Speaker #2: We'll come back. That will be once this particular segment is over; then we will start that segment.

Indraneel Dutt: We'll come back. That will be at once this particular segment is over, we will start that segment.

Speaker #4: Correct. Correct. No. Fair enough. Thank you. Thank you.

Pratik Kothari: Correct. No, fair enough. Thank you.

Operator 3: Thank you. The next question comes from the line of Rahul with Stratton Oakmont. Please go ahead.

Operator: Thank you. The next question comes from the line of Rahul with Stratton Oakmont. Please go ahead.

Speaker #1: Thank you. The next question comes from the line of Rahul. Let's start in Oakmont. Please go ahead.

Speaker #3: Hi. My question is more regarding the rebranding of the Chemicals division to Specialty Chemicals. So, with this Roha plant targeting utilization ramp-up, are there resins produced here moving up the value chain, and are they pharmaceutical-grade resins or the ultra-pure water resins for the semiconductor and EMS sectors?

Operator 2: Hi. My question is more regarding the rebranding of the chemicals division to specialty chemicals. With this Roha plant targeting utilization ramp up, are the resins produced here moving up the value chain? Are they pharmaceutical-grade resins or the ultra-pure water resins for the semiconductor and EMS sectors? What would be the ballpark margin profile for them, and what's the timeline for securing these high-margin certifications required for these new lines? That'd be all.

[Analyst] (Stratton Oakmont): Hi. My question is more regarding the rebranding of the chemicals division to specialty chemicals. With this Roha plant targeting utilization ramp up, are the resins produced here moving up the value chain? Are they pharmaceutical-grade resins or the ultra-pure water resins for the semiconductor and EMS sectors? What would be the ballpark margin profile for them, and what's the timeline for securing these high-margin certifications required for these new lines? That'd be all.

Speaker #3: And what would be the ballpark margin profile for them, and what's the timeline for securing these high-margin certifications required for these new lines?

Speaker #3: That'd be all.

Speaker #2: Yeah, so in a way, I think your assessment is correct at a broad level. As you all know, the reason for the Roha plant was that we were capacity-constrained in the first existing mother plant at Ankleshwar.

Indraneel Dutt: Yeah. In a way, I think your assessment is correct at a broad level. As you all know that the reason for the Roha plant was that we were capacity-constrained in the first existing mother plant of Ankleshwar. As a result of which, now with Roha coming in, that gives us a lot of additional volume by which we can not only take care of our core bread-and-butter business, that we have a significant high global demand, but this will also allow us to delve into more specialty resins for special purpose applications. You mentioned a few of them. There are other applications as well that the company would like to go after, which are typically more higher margin and coming out with higher quality and higher specification-grade product lines.

Speaker #2: And as a result of which now with Roha coming in that gives us a lot of additional volume by which we can not only take care of our core bread and butter business that we have a significant high global demand but this will also allow us to delve into more specialty resins for special purpose applications you mentioned a few of them there are other applications as well that the company would like to go after which are typically more higher margin and coming out with higher quality and higher specification grade product lines.

Speaker #2: Also, at the same time, this will allow us for the expansion in the pharma product line and also will give us more specialty grade resin product lines from a pharma applications standpoint.

Indraneel Dutt: Also, at the same time, the expansion in the pharma product line also will give us more specialty-grade resin product lines from pharma application standpoint. Across the board, we are moving more towards higher-end specialty application grade while continuing to keep the bread-and-butter core volume intact. That is why we felt that it was possibly time that we classify our chemicals, away from commodities to more specialized application offerings.

Speaker #2: So, across the board, we are moving more towards higher-end specialty application grades while continuing to keep the bread-and-butter core volume intact. That is why we felt that it was possibly time that we classify our chemicals away from commodities to more specialized application offerings.

Speaker #3: So, what's the ballpark margin number that we can expect in the medium term from this business, and how much revenue, as a percentage of the consolidated revenue, can we expect in the next two to three years from this segment?

Operator 2: What's the ballpark margin number that we can expect in the medium term from this business? How much revenue as a percentage of the consolidated revenue can we expect in the next two to three years from this segment?

[Analyst] (Stratton Oakmont): What's the ballpark margin number that we can expect in the medium term from this business? How much revenue as a percentage of the consolidated revenue can we expect in the next two to three years from this segment?

Speaker #2: Right now, we are not in a position to give you a breakup. I think those will become evident as the quarters unfold, and you will see the performance and the percentages as the Roha plant comes up. As we move more standard volume to Roha and more specialty volume to Ankleshwar, those will become evident, and at that time we can cover it with more specifics.

Indraneel Dutt: Right now, we are not in a position to give you a breakup. I think those will become evident as the quarters unfold and you will see the performance and the percentages as the Roha plant comes up, as we move more standard volume to Roha, as we move more specialty volume to Ankleshwar. Those will become evident, and at that time, we can cover it with more specifics. Right now, it's a bit premature to talk about those percentages at this point in time.

Speaker #2: Right now, it's a bit premature to talk about those percentages at this point in time.

Speaker #3: Right. And we've also separated Industrial Products from our Treatment Solutions. So does that mean that the Industrial Products segment will scale independently? Like, do we expect to become an OEM supplier to other EPC contractors who might be competing with our Treatment Solutions division?

Operator 2: Right. We've also separated our industrial products from our treatment solutions. Does that mean that the industrial products segment will scale independently? Do we expect to become an OEM supplier to other EPC contractors who might be competing with our treatment solutions division?

[Analyst] (Stratton Oakmont): Right. We've also separated our industrial products from our treatment solutions. Does that mean that the industrial products segment will scale independently? Do we expect to become an OEM supplier to other EPC contractors who might be competing with our treatment solutions division?

Speaker #2: We already are, but we believe that it can be more. As I said, we have made significant investments in the standard plants and systems.

Indraneel Dutt: We already are. We believe that it can be more. As I said, we have significant investments made on the standard plants and systems. We today have four manufacturing locations of scale, and they are small assembly locations. As I said, our second membrane expansion plant is coming up in our adjacent plot in Goa. That will manufacture the UF range of products, the MBR range of products. Clearly, we see that this segment, there's enough traction, enough activity, enough revenues, which is kind of now helping us set this up as a separate standalone segment vertical. We definitely believe that this has a very, very promising future. We believe that the products portfolio will grow in revenues both in India and outside. Our overseas teams are significantly getting strengthened to take these product lines outside India as well.

Speaker #2: We currently have four large manufacturing locations, as well as some small assembly locations. As I mentioned, our second membrane expansion plant is coming up on the adjacent plot in Goa.

Speaker #2: That will manufacture the UF range of products and the MBR range of products. So, clearly, we see that this segment has enough traction, enough activity, and enough revenues, which is kind of now helping us set this up as a separate, standalone segment vertical.

Speaker #2: And we definitely believe that this has a very, very highly promising future. We believe that the products portfolio will grow in revenues both in India and outside.

Speaker #2: Our overseas teams are significantly getting strengthened to take these product lines outside India as well. And that is where the company continues to focus on building a strong industrial products portfolio, a strong specialty chemicals portfolio, and a strong services portfolio, while continuing to look for higher-end advanced and emerging solutions in wastewater and water treatment.

Indraneel Dutt: That is where the company continues to focus on building a strong industrial products portfolio, a strong specialty chemicals portfolio, and a strong services portfolio, while continuing to look for higher-end advanced and emerging solutions in wastewater and water treatment.

Speaker #3: Thank you. That'll be all from my end. Thanks.

Operator 2: Thanks. That will be all for me. Thanks.

[Analyst] (Stratton Oakmont): Thanks. That will be all for me. Thanks.

Speaker #1: Thank you. The next question comes from the line of Costa Bhupna with Kamana Holdings. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Kaustubh Bhugna with Kamana Holdings. Please go ahead.

Operator: Thank you. The next question comes from the line of Kaustav Bubna with Kamana Holdings. Please go ahead.

Speaker #5: Yeah, hi. Thanks for taking my question. So, it kind of ties in with your non-solvent capacity increase in your specialty chemicals business, but I'll just frame it in another way.

Kaustubh Bhugna: Yeah. Hi. Thanks for taking my question. It kind of ties up with your non-solvent capacity increase in your specialty chemicals business. I'll just frame it in another way. A lot of companies are coming up who are trying to create resins for water treatment, which are not polymer-based. They're more carbon-based than other material based. They say that the polymer-based resins worsen the water in other aspects. They say that the countries like Europe are thinking of banning these type of resins on a whole. Given that Ion Exchange has a large exposure to polymer-based resins, what's your response to that, and is this company also diversifying out into other based resins?

Kaustav Bubna: Yeah. Hi. Thanks for taking my question. It kind of ties up with your non-solvent capacity increase in your specialty chemicals business. I'll just frame it in another way. A lot of companies are coming up who are trying to create resins for water treatment, which are not polymer-based. They're more carbon-based than other material based. They say that the polymer-based resins worsen the water in other aspects. They say that the countries like Europe are thinking of banning these type of resins on a whole. Given that Ion Exchange has a large exposure to polymer-based resins, what's your response to that, and is this company also diversifying out into other based resins?

Speaker #5: A lot of companies are coming up who are trying to create resins for water treatment which does not which are not polymer based. They're more carbon based and other material based.

Speaker #5: Because they say that the polymer-based resins pollute and worsen the water and other aspects. And they say that countries like those in Europe are thinking of banning these types of resins altogether.

Speaker #5: So what is your I mean given that Ion Exchange has a large exposure to polymer based resins what's your response to that and is this company also diversifying out into other based resins?

Speaker #2: So, ion exchange resins, as I said, is one of our first businesses. We continue to see a significant amount of demand and requirement for those resins.

Indraneel Dutt: Ion Exchange Resins, as I said, is one of our first businesses. We continue to see a significant amount of demand and requirement for those resins in the market. What you're referring to is the overall concern globally, especially more in developed markets like the US and Europe, around how to deal with residual chemicals, especially very tough-to-treat chemicals which refuse to go away and don't get destroyed. That's where they kind of get into this forever chemicals or PFAS category. There are companies already working. I had talked about this in our emerging solutions in our portfolio, where in terms of both absorption through resins and also destruction of those chemicals, we are coming up with technologies which will help us do that.

Speaker #2: In the market, what you're referring to is the overall concern globally, and especially more in developed markets like the US and Europe, around how to deal with residual chemicals—especially very tough-to-treat chemicals which refuse to go away and don't get destroyed. That's where they kind of get into this 'forever chemicals' or PFAS category.

Speaker #2: There are companies already working. I had talked about this in our emerging solutions portfolio, where, in terms of both absorption to resins and also destruction of those chemicals, we are coming out with technologies which will help us do that. There are very few companies in the world who can offer that in the market, and we would like to be one of them.

Indraneel Dutt: There are very few companies in the world who can offer that in the market, and we would like to be one of them. Apart from that, we don't right now see a significant threat to our polymer-based resin business. Having said that, we continue to look at various basic chemistry of seeing how those applications can be made. We believe that with the focus that we are putting in on absorbing and destroying PFAS assurance, we'll be able to cater to a lot of the concerns that today developed markets in US and Europe have around these forever chemicals.

Speaker #2: Apart from that, we don't right now see a significant threat to our polymer-based resin business. Having said that, we continue to look at various basic chemistry to see how the applications can be met.

Speaker #2: But we believe that with the focus that we are putting in on absorbing and destroying PFAS, PFAS assurance, we'll be able to cater to a lot of the concerns that today developed markets in the US and Europe have around these forever chemicals.

Speaker #5: Okay. So what you're saying is is that so what you're saying is is that you are the company is actively also working towards creating a portfolio of non-polymer based on a portfolio that tackles this issue of creating residual impact.

Kaustubh Bhugna: Okay. What you're saying is that the company is actively also working towards creating a portfolio of non-polymer base, or on a portfolio that tackles this issue of creating residual impact.

Kaustav Bubna: Okay. What you're saying is that the company is actively also working towards creating a portfolio of non-polymer base, or on a portfolio that tackles this issue of creating residual impact.

Speaker #2: Yes, I would say, secondly, that we are working to solve that problem of forever chemicals, which is extremely big if you look at markets—and just Google PFAS and look at markets in Europe and the USA.

Indraneel Dutt: Yes, I would say the second. I would say that we are working to solve that problem of forever chemicals, which is extremely big if you look at markets and just Google PFAS and look at markets in Europe and USA. It's an extremely big problem, and we believe we have some part of the solution. We are now putting the rest of the solution in place so that we can offer this to our customers. That, I think the second way you framed my response is aligned to our thinking.

Speaker #2: It's an extremely big problem, and we believe we have some part of the solution. We are putting the rest of the solution in place.

Speaker #2: So that we can offer this to our customers. So, I think the second way you framed my response is aligned with our thinking.

Speaker #5: Okay, and this last question: on your treatment solution business, your profitability—even in this presentation, you put out your profitability CAGR over five years—has been pretty discouraging.

Kaustubh Bhugna: Okay, just last question. On your treatment solution business, even in this presentation you put out, your profitability CAGR over 5 years has been pretty discouraging. Your EBIT has fallen from INR 60 crore to INR 27 crore. I agree you've grown top line at a healthy double-digit revenue. I'm just trying to understand what's the landscape now? As in what's happening, why has this performance been so bad on the profitability front for 5 years now, and how do we plan to move this back towards higher profitability? Is that the plan even, or are we focusing on other areas and this segment will continue to show weak profitability?

Kaustav Bubna: Okay, just last question. On your treatment solution business, even in this presentation you put out, your profitability CAGR over 5 years has been pretty discouraging. Your EBIT has fallen from INR 60 crore to INR 27 crore. I agree you've grown top line at a healthy double-digit revenue. I'm just trying to understand what's the landscape now? As in what's happening, why has this performance been so bad on the profitability front for 5 years now, and how do we plan to move this back towards higher profitability? Is that the plan even, or are we focusing on other areas and this segment will continue to show weak profitability?

Speaker #5: Your EBIT has fallen from 60 crores to 27 crores. I agree or you've grown top line at a healthy double digit revenue. But I'm just trying to understand what are the what's the landscape now as in what's happening why is this performance being so bad on the profitability front for five years now and how do we plan to move this back towards higher profitability.

Speaker #5: Is that the plan, or are we focusing on other areas if this segment will continue to show weak profitability?

Speaker #2: So, it's a mix of both, as we have always pointed out in past meetings and calls, that this segment is currently facing headwinds due to some large-value legacy projects that we are continuing to execute and finish.

Indraneel Dutt: It's a mix of both. As we have always called out in past meets and calls, that this segment is currently facing headwinds due to some large value legacy projects that we are continuing to execute and finish. I think we have borne a brunt of that pain of those projects as is evident in these numbers. They are kind of in the final stages. I would not say final, but they are, I think, a significant part of the work already done. Some of the numbers that you see are reflective of those. Having said that, we continue to look at ways of how we can improve the solutions business profitability, A, in terms of being selective and picking up projects which are definitely much better risk profile, much better execution predictability.

Speaker #2: I think we have borne the brunt of that pain from those projects, as is evident in these numbers. But they are kind of in the final stages—not, I would not say final, but I think a significant part of the work is already done.

Speaker #2: And so, some of the numbers that you see are reflective of those. Having said that, we continue to look at ways in which we can improve the Solutions business profitability.

Speaker #2: A in terms of picking being selective and picking up projects which are definitely much better risk profile much better execution predictability in terms of improving and strengthening our solutions business from a further from a competency standpoint in walking away from difficult projects being a lot more selective and that's what is experience has taught us.

Indraneel Dutt: In terms of improving and strengthening our solutions business further from a competency standpoint, in walking away from difficult projects, being a lot more selective, and that's what the experience has taught us. You have seen us pick up projects of different nature, whether it is the Oman concession of 20 years we picked up or the recently announced win that we had from a multinational customer for a project in the Middle East. Those are the profile of projects that we would like to get. That is what we're trying to work on to improve the overall, while continuing to maintain the growth trajectory. The focus on the treatment solutions business will not go away. We are working towards finding the right suites for our projects.

Speaker #2: You have seen us pick up projects of different nature, whether it is the Oman concession of 20 years we picked up, or the recently announced win that we had from a multinational customer for a project in the Middle East.

Speaker #2: So those are the profiles of projects that we would like to get. That is what we're trying to work on, to improve overall, while continuing to maintain the growth trajectory.

Speaker #2: The focus on the treatment solutions business will not go away. We are working towards finding the right suit for our projects. What you also see us doing in this presentation is to show how we try to move away from commoditized solutions towards more advanced and emerging solutions, where there is value for technology, there is a need in the market, and meeting the need in the market is how, as a technology company, you want to offer solutions that are not available across the board and hence will come with a little bit of that much of a premium.

Indraneel Dutt: What you also see us doing in this presentation is to see how we try to move away from commoditized solutions towards more advanced and emerging solutions where there is value for technology, there is a need in the market, unmet need in the market, is how as a technology company, we want to offer solutions that are not available across the board and hence, will come with a little bit of that much of premium. At the same time, we continue to build on our other portfolio of products, chemicals, and services. That's the broad company response in terms of the headwinds that we currently see on the solutions business. A lot of work is happening. Unfortunately, some of these projects are large projects. You can't stay away from it like you typically do on a maybe a products deal.

Speaker #2: At the same time, we continue to build on our other portfolio products—chemicals and services. So that's the broad company response in terms of the headwinds that we currently see on the solutions business. But a lot of work is happening—unfortunately, some of these projects are large projects. You can't stay away from them like you typically do on a media products deal, and that is where we have to grind it out, which we are currently doing. But as you see our growth happening on our industrial products portfolio, our consumer products portfolio, our services portfolio, our specialty chemicals portfolio—those are a lot less risky part of the company, and that's what we want to double down on.

Indraneel Dutt: That is where we have to grind it out, which we are currently doing. As you see our growth happening on our industrial products portfolio, our consumer products portfolio, our services portfolio, our specialty chemicals portfolio, those are a lot less risky part of the company, and that's what we want to double down. At the same time, work towards more higher end emerging advanced solutions that the world needs on water and wastewater solutions.

Speaker #2: At the same time, work towards more higher-end, emerging, advanced solutions that the world needs, like water and wastewater solutions.

Speaker #5: Okay, thank you so much for joining back in the queue later.

Kaustubh Bhugna: Okay. Thank you, sir. I shall join back in the queue later.

Kaustav Bubna: Okay. Thank you, sir. I shall join back in the queue later.

Speaker #1: Thank you. The next question comes from the line of Norris Krashto with IMS. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Norris Crasto with IMS. Please go ahead.

Operator: Thank you. The next question comes from the line of Norris Crasto with IMS. Please go ahead.

Speaker #3: Good afternoon gentlemen and thank you for taking my question. My question today is I just wanted to ask about the North America business the Americas and North America business and especially with the recent appointment of the CEO Mr. Sanjay Sapra and also on the water quality association certification.

Norris Crasto: Good afternoon, gentlemen, thank you for taking my question. My question today is, I just wanted to ask about the North America business, the Americas and North America business, especially with the recent appointment of the CEO, Sanjay Sapra, and also on the Water Quality Association certification. My question specifically is, has this certification already started contributing to the revenue in the current quarter? If so, if the management could kindly quantify this revenue contribution. Also looking ahead, how do we see the certification driving incremental revenue over the next two and three quarters?

Speaker #3: So just one—my question specifically is: has this certification already started contributing to the revenue in the current quarter, and if so, could the management kindly quantify this revenue contribution? Also, looking ahead, how do we see the certification driving incremental revenue over the next two or three quarters?

Speaker #2: So good observation and good question and while this discussion is primarily on the segment classification but it kind of related to one of the segments so we'll try to give a perspective so the appointment that you talked about referred to is a part of our ongoing strategy to become more local in global markets we've already while we kind of highlighted the appointment of our North Americas leader we've also our Americas leader rather we've also appointed a leader for our Asia Pacific business.

Indraneel Dutt: Good observation and good question. While this discussion is primarily on the segment classification, but it's kind of related to one of the segments, so we'll try to give a perspective. The appointment that you talked about, referred to, is a part of our ongoing strategy to become more local in global markets. While we kind of highlighted the appointment of our Americas leader, we've also appointed a leader for our Asia Pacific business. We've appointed a leader for our Middle East Africa business, and we are in the process of appointing a leader for our Europe business. It's not an Americas effort alone. It's part of a very concerted effort to take the company global, and below these leaders have country leaders so that we can go after the potential market opportunities in those respective countries.

Speaker #2: We've appointed a leader for our Middle East Africa business, and we are in the process of appointing a leader for our Europe business. So, it's not a North, it's not an Americas effort alone.

Speaker #2: It's part of our way to consider the effort to take the company global, and below these leaders, we have country leaders so that we can go after the potential market opportunities in those respective countries.

Speaker #2: This plays well with the investments that the company has planned and has made, specifically with respect to the investments in our resins business in Roha, with the Roha plant, with our membranes business that is being made, and also with our standard plants business. Because all of these product lines and offerings will be sold in most of these markets across the world, including the Americas market.

Indraneel Dutt: This plays well with the investments that the company has planned and has made, specifically with respect to the investments in our resins business, with the Roha plant, with our membranes business that is being made, and also with our standard plants business. All of these product lines and offerings will be sold in most of these markets across the world, including the Americas market. These markets also require our products to have local certifications to be able to meet the requirements of customers in those local markets as per local stat regulations, and the WQA certification is a step in that regard for our resins business. For us to be able to sell in the Americas market, the WQA certification is a must, and that is what the company has gone and done.

Speaker #2: The these markets also require our products to have local certifications to be able to meet the requirements of customers in those local markets as far as local stat regulations and the WQA certification is a step in that regard for our resins business for us to be able to sell in the Americas market the WQA certification is a must and that is what the company has gone and done so yes with the WQA certification with our Roha plant commission with our leadership team in places some of these global markets we will see an uptick on the on the on the businesses based on which reminds the investment was approved.

Indraneel Dutt: Yes, with the WQA certification, with our Roha plant commission, with our leadership team in place in some of these global markets, we will see an uptick on the businesses based on which premise the investment was approved. This is as per the norms agreed and the progressive growth plan we've already given in past calls. We expect the growth to happen on those lines, in those markets, for the businesses that we are investing in.

Speaker #2: So this is as per the norms agreed and the progressive growth plan we've already given in past calls. So we expect the growth to happen on those lines, in those markets, for the businesses that we are investing in.

Speaker #3: Right. I highly appreciate the detailed answer, but if you could just give a quantification in terms of whether the WQA certification has contributed to the current quarter revenue, and if so, what is the contribution? Also, what is the growth you see with the WQA certification, and how aggressively are we targeting North America—or, sorry, the Americas—and what is the growth in the quarters to come?

Norris Crasto: Right. I highly appreciate the detailed answer, but just if you could just give a quantification in terms of has the WQA certification contributed to the current quarter revenue, and if so, what is the contribution? Also the growth you see with the WQA certification and how aggressively are we targeting the Americas, and what is the growth in the quarters to come?

Speaker #2: So, the question on this current quarter will take in the call for the quarter. As I said, we would not be in a position to give a quantification, but we expect a significant part of our Roha plant capacitization to come from overseas markets, and specifically the North American market.

Indraneel Dutt: The question on this current quarter we will take in the call for the quarter. As I said, we would not be in a position to give a quantification, but we expect a significant part of our Roha plant capacity utilization to come from overseas markets and specifically the North American market. There is a significant assumption that, not a majority, but a significant part of the Roha volume will be used to cater to the North American market growth.

Speaker #2: So there's a significant assumption that a major—not a majority, but a significant—part of the Roha volume will be used to cater to the North American market growth.

Speaker #3: Thank you. Thanks.

Norris Crasto: Thank you.

Indraneel Dutt: Thanks.

Speaker #1: Thank you. The next question comes from Deepak with Sundaram Mutual Funds. Please go ahead.

Norris Crasto: Thank you. The next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead.

Operator: Thank you. The next question comes from the line of Deepak with Sundaram Mutual Fund. Please go ahead.

Speaker #4: Yeah, thank you for the opportunity. I am audible.

[Analyst] (Sundaram Mutual Funds): Yeah. Thank you for the opportunity. Am I audible?

Deepak Kumar: Yeah. Thank you for the opportunity. Am I audible?

Speaker #2: Yes.

Indraneel Dutt: Yes.

Speaker #4: Hi sir. Sir, I just want to double-click on that pharma resin which we spoke about at the Ankleshwar location. So, when we talk about 6x capacity expansion, is this the expansion which has already taken place, or do you mean to say that from here on we'll be expanding 6x in the next couple of years?

[Analyst] (Sundaram Mutual Funds): Hi, sir. Sir, I just want to double-click on that pharma resin which we spoke about at that Ankleshwar location. When we talk about 6x capacity expansion, is this the expansion which has already taken place? Or, you mean to say that from here on, we'll be expanding 6x in the next couple of years?

Deepak Kumar: Hi, sir. Sir, I just want to double-click on that pharma resin which we spoke about at that Ankleshwar location. When we talk about 6x capacity expansion, is this the expansion which has already taken place? Or, you mean to say that from here on, we'll be expanding 6x in the next couple of years?

Speaker #2: So it's in process. It is not as big as the Roha plant that we had to set up. It's in process. The former resins are not measured by volume, but by value.

Indraneel Dutt: It's in the process. It is not as big as the Roha plant that we had to set up. It's in the process. The pharma resins are not measured by volume, but value, and we believe that we have the necessary actions being put in place to get this up and done in the next 12 months.

Speaker #2: And we believe that the necessary actions have been put in place to get this up and done in the next 12 months.

Speaker #4: Okay, so what would be possible to quantify—like, what do we quantify in terms of Roha plant, maybe in cubic meters? What is it currently for this pharma resin, and what will it be? And how much capex will we be incurring in the next 12 months to expand this capacity by 6x?

[Analyst] (Sundaram Mutual Funds): Okay. Sir, would it be possible to quantify, like what we quantify in terms of Roha plant maybe in cubic meter, what is it currently for this pharma resin and what it will be? And how much CapEx we'll be incurring in the next 12 months to expand this capacity by 6x?

Deepak Kumar: Okay. Sir, would it be possible to quantify, like what we quantify in terms of Roha plant maybe in cubic meter, what is it currently for this pharma resin and what it will be? And how much CapEx we'll be incurring in the next 12 months to expand this capacity by 6x?

Speaker #2: So, we typically have not given a breakup. If you look at our past commentaries around the breakup of the industrial and the pharma resins, it's an FDA-approved plant, but it is the capacity we are trying to grow. The capex is manageable.

Indraneel Dutt: We typically have not given a breakup. If you look at our past commentaries around the breakup of the industrial and the pharma resins. It's an FDA-approved plant, but it is the capacity we are trying to grow. The CapEx is manageable. It's not so much the CapEx as to the knowledge and the technical knowhow that helps us unlock that potential and the value, and we believe that we are on course to get that done in the next 12 months.

Speaker #2: It's not so much the capex as it is the knowledge and technical know-how that helps us unlock that potential and value.

Speaker #2: And we believe that we are on course to get that done in the next 12 months.

Speaker #4: Okay, so the third term would be, hello.

[Analyst] (Sundaram Mutual Funds): sir, the asset turn would be Hello?

Deepak Kumar: sir, the asset turn would be Hello?

Speaker #2: Sorry.

Indraneel Dutt: Sorry?

Speaker #4: And so the third term would be similar to what we see in the Roha plant at around, I think, 2 to 2.5 times.

[Analyst] (Sundaram Mutual Funds): sir, the asset turn would be similar to what we see in the Roha plant at around, I think, two to 2.5 times?

Deepak Kumar: sir, the asset turn would be similar to what we see in the Roha plant at around, I think, two to 2.5 times?

Speaker #2: It will be quite a bit more than that because it's a little bit of an asset-like investment, more on technology know-how and IP.

Indraneel Dutt: It will be quite more than that because it's a little bit of an asset-light investment, more on technology knowhow and IP.

Speaker #4: Okay, okay. And so, would it be possible to call out, as of FY26, what was our revenue contribution from this pharma resin?

[Analyst] (Sundaram Mutual Funds): Okay. sir, would it be possible to call out, as of FY26, what was our revenue contribution from this pharma resins?

Deepak Kumar: Okay. sir, would it be possible to call out, as of FY26, what was our revenue contribution from this pharma resins?

Speaker #2: No, we don't do that. As and when the segment grows, as you see, our entire effort with the reclassification is to become more transparent and share more insights about the company with you.

Indraneel Dutt: No, we don't do that. As and when the segment grows, as you see and our entire effort of the reclassification is to become more transparent and share more insights of the company to you. As and when we find that this segment becomes big enough to be able to stand on its own and report, we will do that. Right now, this still continue to be classified under the Specialty Chemicals segment.

Speaker #2: As and when we find that this segment becomes big enough to be able to stand on its own and report, we will do that.

Speaker #2: But right now, this still continues to be classified under the specialty chemical segment.

Speaker #4: Okay, and just one last point. I noticed in your presentation you had given a breakup of all three segments, but somehow I'm not able to reconcile that with the actual reported number that was given earlier.

[Analyst] (Sundaram Mutual Funds): Okay. Sir, one last point. I noticed in your presentation you had given a breakup of all three segments, but somehow I'm not able to reconcile that with the actual reported number, which was earlier. It would be helpful if you can provide the actual number plus the intersegment, which could be related to all three segments, so that at least I'm able to match with the past number as provided.

Deepak Kumar: Okay. Sir, one last point. I noticed in your presentation you had given a breakup of all three segments, but somehow I'm not able to reconcile that with the actual reported number, which was earlier. It would be helpful if you can provide the actual number plus the intersegment, which could be related to all three segments, so that at least I'm able to match with the past number as provided.

Speaker #4: So it would be helpful if you can provide the actual number plus the inter-segment, which could be related to all three segments, so that at least I'm able to match it with the past number as provided.

Speaker #2: Good. We will provide that to Valorim. Yeah. Through Valorim, you'll be able to get.

Indraneel Dutt: Sure. We will provide that to Valorem. Yes, through Valorem you'll be able to get it.

Speaker #4: Sure. Thank you so much, sir.

[Analyst] (Sundaram Mutual Funds): Sure. Thank you so much, sir.

Deepak Kumar: Sure. Thank you so much, sir.

Speaker #1: Thank you. The next question comes from the line of Sagar Parekh with Renaissance Asset Managers. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Sagar Parekh with Renaissance Investment Managers. Please go ahead.

Operator: Thank you. The next question comes from the line of Sagar Parekh with Renaissance Investment Managers. Please go ahead.

Speaker #5: Yeah. Hi sir, and good afternoon. My question was on this—what is a treatment solution, basically? So I was just looking at your presentation, and I'm new to this company.

Sagar Parekh: Yeah. Hi, sir, and good afternoon. My question was on this water treatment solution, basically. I was just looking at your presentation, and I'm new to this company, so maybe my questions will be basic. I wanted to understand on, you have written ultrapure water and high purity water as your solution that you offer. Do you all also have the capability to service the semiconductor industry, which is upcoming in India, for the ultrapure and high purity water?

Speaker #5: So maybe my questions would be basic but I wanted to understand on you have written ultra pure water and high purity water as your like as your solution that you offer.

Speaker #5: So, do you all also have the capability to service the semiconductor industry, which is upcoming in India, for ultra-pure and high-purity water?

Speaker #2: Yeah, yeah. So, "ultra pure" is more for solar, semiconductors, and batteries, and "high purity water" is a term that we associate more with pharma, biopharma, life sciences, and biotech companies.

Indraneel Dutt: Yeah. Ultrapure is more for solar, semiconductor, and batteries. High purity water is a term that we associate more with pharma, biopharma, life sciences, biotech companies. Yes, we have the capability to offer ultrapure water solutions to semiconductor companies. We have participated in some of the bids that have happened in the projects in the past, I would say, year plus. We continue to pursue. We've got good strength. In fact, we have picked up a small project of a semiconductor application. It's still not in the public domain, but we picked up a small project with a partner. We're very much in that space. This is out of interest of the company. The company had done an ultrapure water project for Semiconductor Complex Limited, Mohali, SCL Mohali, quite about 30 years back. A lot of that knowledge resided in the company.

Speaker #2: And yes we have the capability to offer ultra pure water solutions to semiconductor companies. We have participated in some of the bids that have happened in the projects in the past couple of past I would say year plus.

Speaker #2: And we continue to pursue. We've got good strength. In fact, we have picked up a small project of a semiconductor application. It's still not in the public domain, but we picked up a small project with a partner.

Speaker #2: So we are very much in that space, and this is not a new space for the company. The company had done an ultra-pure water project for Semiconductor Limited, Mohali (SCL Mohali), quite about 30 years back.

Speaker #2: So, a lot of that knowledge resided in the company. However, with the advancements in chip manufacturing, we've had to upgrade our technology, work with a partner, and I believe we have the best technology to offer for our customers in India and abroad.

Indraneel Dutt: However, with the advancements in chip manufacturing, we've had to upgrade the technology of ours, work with a partner, and I believe we have the best technology to offer for our customers in India and abroad.

Speaker #5: So in terms of size for example let's say the startups planted some of which is a 90,000 crore kind of capex. So within that what would be the opportunity size for us that we can cater to?

Sagar Parekh: In terms of size, for example, let's say the Tata's plant is somewhere which is a INR 90,000 crore kind of CapEx. Within that, what would be the opportunity size for us that we can cater to?

Speaker #2: Yeah. It's a very specific one. I wouldn't want to—and again, that varies plant to plant. All I can tell you is that the semiconductor fabs are extremely dirty industries.

Indraneel Dutt: Yeah, it's a very specific one. Again, that varies plant to plant. All I can tell you is that the semiconductor fabs are extremely dirty industries. A, they require very high quality source water. Now that again depends on the kind of water you get. If you get municipality water, that will be one investment requirement. If you get sewage water, as again some of these industries have been talked about to get, then to treat that into making ultrapure water will be another investment level. Then the wastewater that comes from these fabs also will need to get treated. Even those require very large treatment facilities. In fact, the investments required to treat processed water from these fabs is bigger than what you need for setting up ultrapure water plants.

Speaker #2: So, A, they require very, very high-quality source water. That, again, depends on the kind of water you get. If you get municipality water, that will be one investment requirement.

Speaker #2: If you get sewage water, as again some of these industries are being talked about to get, then to treat that and to make it ultra-pure water will be another investment level.

Speaker #2: And then the wastewater that comes from these fabs also needs to get treated. And even those require very large treatment facilities. In fact, the investments required to treat process water from these fabs are bigger than what you need for setting up an ultra pure water plant.

Speaker #2: So, significant water guzzlers, significant water degraders, and all these fabs will require a significant amount of their plant capex to go into water and wastewater treatment.

Indraneel Dutt: Significantly water guzzlers, significant water degraders, and all these fabs will require a significant amount of their plant CapEx to go into water and wastewater treatment.

Speaker #5: And this business would be order book driven, this entire treatment solutions business?

Sagar Parekh: This business would be order book driven, this entire treatment solutions business?

Speaker #2: Yeah. And these are all customized plants. So unless and until it's like it's a large projects depending on the size of the plant. So yes you'll have to it's like any other project pursuit that we do.

Indraneel Dutt: Yeah. These are all customized plants, I'll listen until it's like it's our large projects, depending on the size of the plant. Yes, it's like any other project pursuit that we do.

Speaker #5: So just my last question on this entire treatment solutions business, please. So you have about ₹1,100 crores kind of revenue last year with ₹27 crores of EBITDA, right?

Sagar Parekh: Just my last question on this entire treatment solutions business, please. You have about INR 1,100 crore kind of revenue last year with INR 27 crore of EBIT, right? Your margins have been coming up, you have alluded to the fact that there were some large legacy projects that are getting over now. If I look at FY21, FY22, you did about 11% to 12% kind of EBIT margins on a INR 500 crore kind of top line, right? Our top line has more than doubled, our margins have come off. With this entire new space which is coming up, which is semiconductors and solar, where we have our capabilities, do you think we can go back to 10% to 11% margins with significant scale-up in terms of top line?

Speaker #5: And your margins have been coming up, and you have alluded to the fact that there were some large legacy projects that are getting over now.

Speaker #5: But if I look at FY21 and FY22, you did about 11–12 percent kind of EBIT margins on a ₹500 crore kind of top line, right?

Speaker #5: And now our top line has more than doubled but our margins have come off. Now with this entire new space which is coming up which is semiconductor and solar where we have our capability do you think we can go back to like 10 11 percent margins with significant scale up in terms of top line or you think the top line will remain more or less in this range with some margin improvement?

Sagar Parekh: Do you think the top line will remain more or less in this range with some margin improvement? How should we look at this business overall?

Speaker #5: How should we look at this business overall?

Speaker #2: I think the business will see first of all I'll qualify your comment around the legacy projects as they have been saying that while a substantive part of the project has been done yet we don't quantify percentages but yet a part of the a fair bit of the project is still left out.

Indraneel Dutt: See, first of all, I'll qualify your comment around the legacy projects. We have been saying that while a substantive part of the project has been done, yet we don't quantify percentages, yet a fair bit of the project is still left out. Okay? We don't want to give a kind of a feeling that we are kind of out of the woods. We are not. We grind through, we should be out of the woods soon. The immediate short term, I think we still have to execute our commitments on this project. Having said that, the effort of the company, as I said, has been on three, four areas. One, we're very selective in what we pick up, we have been very selective over the last couple of years.

Speaker #2: Okay. So we should not don't want to give a kind of a feeling that we are kind of out of the woods. We are not.

Speaker #2: But we grind through, and we should be out of the woods soon. But in the immediate short term, I think we still have to execute our commitments on this project.

Speaker #2: Having said that, the effort of the company, as I said, has been on three or four areas. One, be very selective in what we pick up.

Speaker #2: And we have been very selective over the last couple of years. Other jobs that we have won also reflect a much better profitability profile that we have picked up, which we announced as well.

Indraneel Dutt: The drops that we have won also reflect a much better profitability profile that we have picked up, which we've announced as well. Number three is to look towards areas which are more high-tech, more where there are challenges, where there are few technology providers, and which is where the entire segments are advanced. Treatment solutions and emerging solutions come into play. These are not easy. Not too many companies in the world can offer on the emerging solutions side. We'll be one of the very few companies in the world who can offer resource recovery, brine mineralization, electrolysis, water electrolysis, lithium extraction. These are high-tech spaces, that is where we believe if we move towards that, fully changes the profile mix while not reducing the focus on the treatment solutions portfolio, we should be able to improve the overall mix of the particular segment.

Speaker #2: Number three is to look towards areas which are more high-tech, where there are challenges, where there are few technology providers, and which is where the entire segments of advanced technical solutions and emerging solutions come into play.

Speaker #2: These are not easy. Not too many companies in the world can offer, on the emerging solution side. We'll be one of the very few companies in the world who can offer resource recovery, brine mineralization, electrolysis, and water for electrolysis for lithium extraction.

Speaker #2: These are high-tech spaces, and that is where they believe if you move towards that, it fully changes the profile mix. While not reducing the focus of the treatment solutions portfolio, we should be able to improve the overall mix of the particular segment.

Speaker #5: Got it. Got it. Perfect. That's it from my side. Thank you.

Sagar Parekh: Got it. Perfect. That's it from my side. Thank you.

Speaker #1: Thank you. Ladies and gentlemen, that was the last question. Now, I would like to hand the conference over to the management for their Q1 earnings results.

Operator 3: Thank you. Ladies and gentlemen, that was the last question. I would hand the conference over to the management for their Q1 earnings results. Hello.

Operator: Thank you. Ladies and gentlemen, that was the last question. I would hand the conference over to the management for their Q1 earnings results. Hello.

Speaker #1: Hello.

Speaker #4: Yes.

Indraneel Dutt: Yes.

Purvangi Jain: Yes.

Speaker #1: Oh yes ma'am.

Operator 3: Yes, ma'am.

Operator: Yes, ma'am.

Speaker #4: Sure. What is it?

Indraneel Dutt: What is it?

Speaker #1: Oh, sir, now I have the conference. So, over to the management for their Q1 earnings results.

Operator 3: Sir, now I hand the conference over to the management for their Q1 earnings results.

Operator: Sir, now I hand the conference over to the management for their Q1 earnings results.

Speaker #4: Good afternoon, everybody. This is Vasanth Naik. It is a pleasure to welcome you all to the earnings conference call for the first quarter of financial year 2027.

Vasant Naik: Good afternoon, everybody. This is Vasant Naik. It is a pleasure to welcome you all to the Earnings Conference Call for Q1 of FY27. For Q1 under review on a consolidated basis, the company reported an operating income of INR 701 crores, increase of 20% year-on-year. The EBITDA stood at INR 32 crores, a decline of 49% year-on-year. The EBITDA margin stood at 4.54%, and net profit was INR 3 crores, while the PAT margin was 0.44%. Let me take you through the quarterly segmental performance on a consolidated basis. Within our engineering division, we have now introduced a more granular reporting structure to provide investors with better visibility into the underlying business mix and growth drivers. Going forward, the engineering segment will now be reported under three distinct sub-segments: treatment solutions, industrial products, and lifecycle services.

Vasant Naik: Good afternoon, everybody. This is Vasant Naik. It is a pleasure to welcome you all to the Earnings Conference Call for Q1 of FY 2027. For Q1 under review on a consolidated basis, the company reported an operating income of INR 701 crores, increase of 20% year-on-year. The EBITDA stood at INR 32 crores, a decline of 49% year-on-year. The EBITDA margin stood at 4.54%, and net profit was INR 3 crores, while the PAT margin was 0.44%. Let me take you through the quarterly segmental performance on a consolidated basis. Within our engineering division, we have now introduced a more granular reporting structure to provide investors with better visibility into the underlying business mix and growth drivers. Going forward, the engineering segment will now be reported under three distinct sub-segments: treatment solutions, industrial products, and lifecycle services.

Speaker #4: For the first quarter under review, on a consolidated basis, the company reported an operating income of INR 701 crore, an increase of 20 percent year-on-year.

Speaker #4: The EBITDA stood at INR 32 crore, a decline of 49 percent year on year. The EBITDA margin stood at 4.54 percent, and net profit was INR 3 crore, while the PAT margin was 0.44 percent.

Speaker #4: Now, let me take you through the quarterly segmental performance on a consolidated basis. Within the Engineering division, we have now introduced a more granular reporting structure to provide investors with better visibility into the underlying business mix and growth drivers.

Speaker #4: Going forward, the engineering segment will now be reported under three distinct subsegments: Treatment Solutions, Industrial Products, and Life Cycle Services. The Treatment Solutions segment reported a revenue of INR 210 crore, an increase of 14% year on year.

Vasant Naik: The treatment solutions segment reported a revenue of INR 210 crores, increase of 14% year-on-year, with an EBIT level loss of INR 17 crores. The profitability continues to be impacted by certain legacy projects. On the operational front, dispatches to the GCC regions have resumed and are expected to progressively gain momentum. Our focus remains on execution of the existing backlog while continuing to pursue opportunities across emerging segments and international markets. The industrial products delivered a strong performance during the quarter, with revenue growing 14% year-on-year to INR 105 crores. The segment EBIT margin increased by 145% to INR 13 crores, and as a percentage to 11.89% from just under 6% in the corresponding quarter of last year. This was supported by a strong performance across the water treatment solutions and the membrane segment.

Speaker #4: With an EBIT-level loss of INR 17 crores, profitability continues to be impacted by certain legacy projects. On the operational front, despite it, the GCC regions have resumed and are expected to progressively gain momentum.

Speaker #4: A focus remains on execution of the existing backlog, while continuing to pursue opportunities across emerging segments and international markets. The industrial products delivered a strong performance during the quarter, with revenue growing 14 percent year on year to INR 105 crore.

Speaker #4: The segment EBIT margin increased by 145 percent to INR 13 crore, and as a percentage of sales, to 11.89 percent from just under 6 percent in the corresponding quarter of last year.

Speaker #4: This was supported by a strong performance across the water treatment solutions and the membrane segment. Going forward, growth will be supported by the expansion of our UF membrane manufacturing capabilities, our capacity for standard plants, and an increasing overseas presence.

Vasant Naik: Going forward, the growth will be supported by the expansion of our UF membrane manufacturing capabilities, enhanced capacity for the standard plants, and our increasing overseas presence. The lifecycle services maintained its healthy growth trajectory, with revenue increasing 28% year-on-year to INR 72 crores. The segment EBIT margin stood at INR 7 crores, increase of 22% year-on-year. The margin percentage was 9.92% as compared to 10.5% in the previous year. We continue to focus on scaling our O&M and consumable business while expanding our offerings across retrofit projects, BOOT models, and digital solutions. Across these three businesses, our order book stood at INR 2,473 crores as of June 26, providing healthy execution visibility. However, this order backlog does not include the recent contract win of Hyundai of around $52 million, which was announced post the closing of the quarter.

Speaker #4: The Life Cycle Services segment maintained a healthy growth trajectory, with revenue increasing 28 percent year on year to INR 72 crore. The segment EBIT margin stood at INR 7 crore, an increase of 22 percent year on year.

Speaker #4: The margin percentage was 9.92 percent, as compared to 10.5 percent in the previous year. We continue to focus on scaling our O&M and consumables business, while expanding our offerings across retrofit projects, BOOM, BOOT models, and digital solutions.

Speaker #4: Across these three businesses, our order book stood at INR 2,473 crores as of June 26th, providing healthy execution visibility. However, this order backlog does not include the recent contract win from Hyundai of around $52 million, which was announced post the closing of the quarter.

Speaker #4: In addition, the bid pipeline stood at INR 9,777 crores, providing a strong opportunity funnel for future order improvement. Moving to specialty chemicals, revenue for the quarter stood at INR 230 crores, an increase of 21 percent year on year.

Vasant Naik: In addition, the bid pipeline stood at INR 9,777 crores, providing a strong opportunity funnel for future order inflow. Moving to the specialty chemicals, revenue for the quarter stood at INR 230 crores, an increase of 21% year-on-year. The segment EBIT stood at INR 22 crores, reflecting a decline of 52%. Profitability during the quarter was impacted by the geopolitical factors as well as the Roha facility cost. As utilization of the expanded facility improves, we expect increased off-take from the Roha plant to support the business. Pharma resins and a higher contribution from processed chemicals remain an important growth area for us. Lastly, we come to the consumer products segment, which delivered a strong top-line growth, with revenue increasing 33% year-on-year to INR 112 crores. The segment reported a loss of approximately INR 34 lakhs, compared to a loss of INR 45 lakhs in the corresponding quarter last year.

Speaker #4: The segment EBIT stood at INR 22 crore, reflecting a decline of 52 percent. Profitability during the quarter was impacted by geopolitical factors as well as the ROA facility cost.

Speaker #4: As utilization of the expanded facility improves, we expect increased offtake from the ROA plant to support the business. Pharma resins and a higher contribution from processed chemicals remain important growth areas for us.

Speaker #4: Lastly the we come to the consumer product segment which delivered a strong top line growth with revenue increasing 33 percent year on year to INR 112 crores.

Speaker #4: The segment reported a loss of approximately INR 34 lakhs, compared to a loss of INR 45 lakhs in the corresponding quarter last year, reflecting a modest improvement in the financials.

Vasant Naik: Reflecting a modest improvement in the financials. Growth during the quarter was broad-based across key product lines, and going forward, we continue to see opportunities in the water softener market, wellness products, and newer product categories such as the OTG. Overall, we saw double-digit growth across all the five business segments during the quarter. While profitability was impacted by the pressures in certain businesses, our focus remains on improving execution, scaling our expanded capacities, and growing our recurring services portfolio, and capitalizing on the healthy opportunity pipeline across the domestic and the international markets. With this, we conclude the opening remarks, and we can now open the floor to the Q&A.

Speaker #4: Growth during the quarter was broad-based across three product lines, and going forward, we continue to see opportunities in the water softener market, wellness products, and newer product categories such as OTGs.

Speaker #4: Overall, we saw double-digit growth across all the five business segments during the quarter. While profitability was impacted by the pressures in certain businesses, our focus remains on improving execution, scaling our expanded capabilities and capacities, growing our recurring services portfolio, and capitalizing on the healthy opportunity pipeline across the domestic and international markets.

Speaker #4: With this, we conclude the opening remarks and can now open the floor to the Q&A.

Speaker #1: Thank you, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 3: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sunil Kothari with Unique PMS. Please go ahead.

Operator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sunil Kothari with Unique PMS. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sunil Kothari with Unique PMS. Please go ahead.

Speaker #5: Hi, thanks. It's great to hear a lot about the capabilities and the exchanges happening, as well as the reclassification of the businesses. I would also like to hear something more from Mr. Patni, if possible—his comments on this reorganization, reclassification, and the growth we are planning over the next two to three years.

Sunil Kothari: Hi. Thanks, Indranil. Really great to hear a lot about the capability Ion Exchange is having and the reclassification of the businesses. I would like to listen something more from Mr. Patni also, if possible, his comments of this reorganization, reclassification, and the growth we are planning to do maybe over the next two to three years after completing these challenging legacy projects and challenging time. Some comments from you will be really helpful.

Speaker #5: After completing these challenging legacy projects and going through a challenging time, some comments from him would be really helpful.

Speaker #6: Good afternoon. Sunilji, you heard from Indianel in detail about how we are trying to make sure that the company aligns to a lot of the upcoming business opportunities.

Aankur Patni: Good afternoon, Sunil Ji. You could have heard from Indranil in detail about how we are trying to make sure that the company aligns to a lot of the upcoming business opportunities, sunrise industries both in terms of how we are pursuing these opportunities, also in terms of how we are adding capacities and capabilities within the organization. I look forward to the future with a lot of optimism. Of course, we have had not just one, quite a few challenging quarters. As Indranil mentioned that legacy project overhang is still not over. We are definitely trying to make sure that has less of a bearing as we build an order book of more profitable contracts, larger contracts, not just in India, substantially outside.

Speaker #6: Sunrise Industries, both in terms of how we are pursuing these opportunities, but also in terms of how we are adding capacities and capabilities within the organization.

Speaker #6: I look forward to the future with a lot of optimism. Of course, we have had not just one but quite a few challenging quarters. As indicated earlier, the legacy project overhang is still not over, but we are definitely trying to make sure that has less of a bearing as we build an order book of more profitable contracts—larger contracts not just in India, but substantially outside as well.

Speaker #6: The portfolio of products, services, specialty chemicals—all of these are definitely going to be, you know, driving a little bit more on the margin side. We will continue to work extensively to increase our order book on the treatment solutions segment also. I think that continues to be, continues to be, will be a significant contributor to the top line.

Aankur Patni: The portfolio of products, services, specialty chemicals, all of these are definitely going to be driving a little bit more on the margin side. We will continue to work extensively to increase our order book on the treatment solutions segment also. I think that continues to be, will be a significant contributor to the top line. I dare say our effort will be to increasingly make it more profitable and be a substantial contributor to the bottom line also. All in all, looking at the future with a lot of hopes, Sunil Ji.

Speaker #6: And I dare say our effort will be to increasingly make it more profitable and be a substantial contributor to the bottom line also. So, all in all, looking at the future with a lot of hopes, Sunilji.

Speaker #5: Thank you, sir. Thanks a lot for the detailed reply. Thanks a lot.

Sunil Kothari: Thank you, sir. Thanks a lot for the detailed reply. Thanks a lot.

Aankur Patni: Okay.

Speaker #1: Thank you. The next question comes from the line of Koster Bhubna with Kamana Holding. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Kaustubh Bhugna with Kamana Holding. Please go ahead.

Operator: Thank you. The next question comes from the line of Kaustav Bubna with Kamana Holding. Please go ahead.

Speaker #7: Yeah, hi. So if you could kind of explain, after all the capacity expansions in the specialty chemicals business, if you were to theoretically assume that the plants would get fully utilized, what would the maximum revenue potential for the specialty chemicals business be versus ₹868 crore in FY26?

Kaustubh Bhugna: If you could kind of explain after all the capacity expansions in the specialty chemicals business, if you were to theoretically assume that the plants would get fully utilized, what would the maximum revenue potential for the specialty chemicals business be versus INR 868 crore in FY26?

Kaustav Bubna: If you could kind of explain after all the capacity expansions in the specialty chemicals business, if you were to theoretically assume that the plants would get fully utilized, what would the maximum revenue potential for the specialty chemicals business be versus INR 868 crore in FY26?

Speaker #4: Yeah. We had said in the past that we expect, once the ROA plant achieves full capacity over the next four years, we should have an asset turnover of just under two times on the manufacturing capex which we are incurring.

Vasant Naik: We have said in the past that we expect once the Roha plant achieves full capacity over the next four years, we should have an asset turnover of just under two times on the manufacturing CapEx, which we are incurring. Currently, our specialty chemical, as you just mentioned, is just under INR 900 crore for the year for 2025, 2026. We expect a substantial increase of at least 50% increase, at least in this capacity over the next couple of years.

Speaker #4: So currently, our specialty chemicals, as you just mentioned, is just under ₹900 crore for the year for 2025-26. So we expect a substantial increase of at least 50% in this capacity over the next couple of years.

Speaker #7: Okay. And sir how do we see you know this year going ahead in terms of you know as the company bouncing back on profitability front do should we expect what on quarter improvement and still not getting back to those double digit margins or would the situation still be tough for the next for this year ahead?

Kaustubh Bhugna: Okay. Sir, how do we see this year going ahead in terms of the company bouncing back on profitability front? Should we expect Quarter-on-quarter improvement and still not getting back to those double-digit margins? Or would the situation still be tough for this year ahead, given the struggles you're facing in some verticals, expansion in some, et cetera?

Kaustav Bubna: Okay. Sir, how do we see this year going ahead in terms of the company bouncing back on profitability front? Should we expect Quarter-on-quarter improvement and still not getting back to those double-digit margins? Or would the situation still be tough for this year ahead, given the struggles you're facing in some verticals, expansion in some, et cetera?

Speaker #7: Given that you know the struggles you're facing in some verticals, expanding in others, etc.

Speaker #8: Yeah. So I think you know you're right. I mean I agree that the performance in the first quarter has been disappointing and it's a combination as you said you know some of the legacy projects that continue to which continue to grind through.

Indraneel Dutt: Yeah. I think you're right. I agree that the performance in Q1 has been disappointing, and it's a combination, as I already said, some of the legacy projects which continue to grind through. It's a combination of Roha coming up to speed as we go through debottlenecking and stabilizing the plant. It's also a combination of the current geopolitical situation due to which some of our invoicing got impacted. A lot of this have contributed. I think across the board, as the geopolitical situation improves, as Roha is stabilizing, and I think there's a lot of work that's happening every day towards that. As the volume starts picking up in some of these overseas geographies that we talked about, we definitely see the outlook improving.

Speaker #8: It's a combination of, you know, ROA coming up to speed as we, you know, go through the bottlenecking and stabilizing of the plant. It's also a combination of the current geopolitical situation, due to which some of our invoicing, you know, got impacted. So a lot of this has contributed.

Speaker #8: So I think across the board as the geopolitical situation improves as you know ROA is stabilizing and I think there's a lot of work that's happening every day towards that and as the volume start picking up in some of these overseas geographies that we talked about we definitely see you know the outlook improving as we said as Vasanth called out the you know order that we got from Hyundai for 500 plus crores you know it's a very it works something that the team has been working on for quite some time and I think we're very happy with the you know with the close and the overall profile and you know profitable profile of those projects.

Indraneel Dutt: As we said, as Mr. Vasant Naik called out the order that we got from Hyundai for INR 500 plus crores, it's worth something that the team has been working on for quite some time, and I think we're very happy with the close and the overall profile and the profitable profile of those projects. As we get more of such projects coming in, we definitely see the treatment solution business profile also improving as Roha kicks in a stronger way as we have projected so far. We see the overall performance of the specialty chemicals segment improving as our standard plants and membranes are able to expand or post the investments made. We see those segments coming up.

Speaker #8: So as we get more of such projects coming in we definitely see the you know the treatment solution business profile also improving as ROA kicks in you know in a stronger way as we have projected so far you know we see the overall you know performance of the specialty chemical segment improving as our standard plants and membranes you know are able to you know expand or you know post the investments made we see those segments you know coming up.

Speaker #8: So I think across the board the effort is to see that across these five segments we improve not only the top line but also the profile of the bottom line of the company and that is why we voluntarily you know split up into these five segments to you know voluntarily be open to showing how we are performing in each of those.

Indraneel Dutt: I think across the board, the effort is to see that across these five segments, we improve not only the top line, but also the profile of the bottom line of the company. That is why we voluntarily split up into these five segments, to voluntarily be open to showing how we are performing in each of those. Yes, double-digit profitability, that I think the company had done great at that point in time. It will be a process for us to get there. I think we remain fairly confident, though quietly confident, that I think we have a path to get there. It's a process for us to go and reach there. Even the focus on products, chemical services, while retaining the intent on treatment solutions is a part of that process. Our focus on international growth is a part of that process.

Speaker #8: So yes you know double digit you know profitability that I think was the company has had done great at that point in time. It will be a process for us to get there but I think we remain you know fairly you know fairly confident though quietly confident that I think we have a path to get there.

Speaker #8: But it will take us—you know, it's a process for us to go and reach there. Even the focus on products, chemical services, while retaining the intent on treatment solutions, is a part of that process.

Speaker #8: Our focus on international growth is a part of that process. Our focus on looking at more emerging, advanced tech solutions is also part of the process.

Indraneel Dutt: Our focus to look at more emerging advanced tech solutions is also part of the process. A lot of that we are working on to see that we can get back in due course of time to the double-digit profitability you referred to.

Speaker #8: So, a lot of that, you know, we are working on to see that we can get back in due course of time to the double-digit profitability you referred to.

Kaustubh Bhugna: Thank you so much.

Kaustav Bubna: Thank you so much.

Speaker #7: Thank you so much.

Speaker #1: Thank you. The next question comes from the line of Rahul with Saturn Oakmont. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Rahul with Citron Mont. Please go ahead.

Operator: Thank you. The next question comes from the line of Rahul with Citron Mont. Please go ahead.

Speaker #5: Hi. With respect to the restructuring of the Life Cycle Services as a standalone pillar, do we expect improvement in working capital velocity compared to our traditional EPC segment? And as this Life Cycle Services segment grows as a percentage of total revenue, can we expect some free cash flow conversion to structurally detach from these heavy working capital cycles we have historically seen in our government project verticals?

[Analyst] (Stratton Oakmont): Hi. With respect to the restructuring of the life cycle services as a standalone pillar, do we expect an improvement in working capital velocity compared to our traditional EPC segment? As this life cycle services segment grows as a percentage of total revenue, can we expect some free cash flow conversion to structurally detach from this heavy working capital cycles we have historically seen in our government project verticals?

Speaker #8: So clearly, this is, you know, a step partly in the direction that you talked about—towards having a less capital-intensive growth plan. You know, and also, in the course of time, we will see if we can use some more specific flavor and color of those segments. We can speak about those segments in particular.

Indraneel Dutt: Clearly, this is a step partly in the direction that you talked about towards having a less capital-intensive growth plan. Also in the course of time, we will see we can give you some more specific flavor and color of those segments. We can speak about those segments in particular. Yes, that's the plan. As I said, we already closed a large deal for a 20-year O&M concession with one of our large industrial existing customers, Petroleum Development Oman. We believe these will give us a better revenue profile at a group level because some of the profitability of these O&M contracts will reside in our industrial products business, will reside in our specialty chemicals business. Overall, a much better profile for the group. It gives us predictability of revenue, repeatability of revenue, and we want to do more.

Speaker #8: But yes, that's the plan. I mean, as I said, we already closed a large deal for a 20-year O&M concession, you know, with one of our large industrial existing customers—you know, Petroleum Development Oman. And we believe this will give us a better revenue profile at a group level, because some of the profitability of these O&M contracts also resides in, or will reside in, our industrial products business and our specialty chemicals business.

Speaker #8: So overall a much better profile for the group. It gives us predictability of revenue repeatability of revenue and it want to do more clearly you know one of the areas that we will explore is to also look at boot and book contracts but again that will also come with their share of some developmental you know investments but overall you know whether it is you know whether it is concession based you know repeatable O&M revenue whether it is consumables and spares revenue whether it is rental revenue these are all service models that we're evaluating and we have a very senior leader leading our services business for the company globally and you know our effort will be to build this vertical substantively to deliver higher turnover really establish itself as a major service segment of focus for the company and also give a higher wall to wall profitability for the company.

Indraneel Dutt: Clearly, one of the areas that we will explore is to also look at boot and boo contracts. Again, that will also come with their share of some developmental investments. Overall, whether it is concession-based repeatable O&M revenue, whether it is consumables and spares revenue, whether it is rental revenue, these are all service models that we're evaluating. We have a very senior leader leading our services business for the company globally. Our effort will be to build this vertical substantively to deliver Really establish itself as a major service segment of focus for the company, and also give a higher wall-to-wall profitability for the company.

Speaker #5: Thanks. And my second question is more related to the specialty business. So, as India incentivizes semiconductor fabrication and green hydrogen electrolyzer manufacturing, do we expect the demand for ultra-pure water and special membranes to scale exponentially? And are our current R&D expenses and efforts equipped to reduce semiconductor-grade resins and these electrolyzer membranes natively? And what is the total addressable size of this in the next few years?

Operator 2: Thanks. My second question is more related to the specialty business. As India incentivizes semiconductor fabrication and green hydrogen electrolyzer manufacturing, do we expect the demand for ultrapure water and special membranes to scale exponentially? Are our current R&D expenses and efforts equipped to produce semiconductor-grade resins and these electrolyzer membranes natively? What is the total addressable size of this in the next few years?

[Analyst] (Stratton Oakmont): Thanks. My second question is more related to the specialty business. As India incentivizes semiconductor fabrication and green hydrogen electrolyzer manufacturing, do we expect the demand for ultrapure water and special membranes to scale exponentially? Are our current R&D expenses and efforts equipped to produce semiconductor-grade resins and these electrolyzer membranes natively? What is the total addressable size of this in the next few years?

Speaker #8: So you know, these segments you've identified are absolutely correct, spot on, and, you know, there is definitely higher potential for growth in these segments.

Indraneel Dutt: All the segments you identified are absolutely correct and spot on. There is definitely higher potential and growth in these segments. I am not so sure how fast only India alone can be a big enough market for us because as we are looking at some of these plays, whether it is green hydrogen, whether it is ultrapure water, high purity water, we're looking at India and also beyond as well. That is where we are trying to see how we can partner for the right competencies to be able to cater to those markets. Yes, in India, but also beyond, we believe that this will grow. Again, some of the competencies we already have, with which we are playing in the market.

Speaker #8: I am not so sure you know how fast only India alone can can you know be a beginner market for for us because we're looking as we're looking at some of these plays whether it is you know green hydrogen whether it is ultra pure water high purity water we're looking at India and also beyond as well.

Speaker #8: And that is where we are trying to see how we can partner with them for the right competencies to be able to cater to those markets.

Speaker #8: So yes, in India, but also beyond, we believe that this will grow. Again, some of the competencies we already have, which is what we are playing with in the market. Some competencies we are in the process of building because these segments, whether it is in India or in other parts of the world, we will see a lot more investment in semiconductors, in data centers, and that is what we are working towards.

Indraneel Dutt: Some competencies we are in the process of building because these segments, whether it is in India, whether it is in other parts of the world, you will see a lot more investment in semiconductors, in data centers. That is what we are working towards. Not all the solutions are in place, our teams are working, our technology teams, our leadership are working to see that we become one of the favored players in these spaces.

Speaker #8: Not all the solutions are in place, but our teams are working. Our technology teams' leadership are working to see that we become one of the favored players in these spaces.

Speaker #5: And what would be the total addressable market for this right now in India and outside?

Operator 2: What would be the total addressable market for this right now, India and outside?

[Analyst] (Stratton Oakmont): What would be the total addressable market for this right now, India and outside?

Speaker #8: I will not be able to comment, but you know, I'm sure these are, you know, readily available figures that you can get. As I said, India has been a little bit slow, you know, post that last project that we had, the last large project in India. But I think there are, again, other projects in the anvil, and you know, it could only pick up over time. I think it's only how fast it happens is possibly something we need to see.

Indraneel Dutt: I will not be able to comment, but I'm sure these are readily available figures that you can get. As I said, India has been a little bit slow post that last project that we had, last large project in India. I think there are, again, other projects in the anvil. It could only pick up over time. I think it's only how fast it happens is possibly something we need to see.

Speaker #5: Thanks. That'll be all from my side. All the best for the coming quarter.

Operator 2: Thanks. That'll be all from my end then. All the best for the coming quarter.

[Analyst] (Stratton Oakmont): Thanks. That'll be all from my end then. All the best for the coming quarter.

Speaker #1: Thank you. Participants, if you wish to ask a question, you may press star then one. The next question comes from the line of Norris Krashtal with IMS.

Operator 3: Thank you. Participants, if you wish to ask a question, you may press star and one. The next question comes from the line of Norris Crasto with IMS. Please go ahead.

Operator: Thank you. Participants, if you wish to ask a question, you may press star and one. The next question comes from the line of Norris Crasto with IMS. Please go ahead.

Speaker #1: Please go ahead.

Speaker #7: Yes, thank you. Thank you so much. My question is: with the softening crude prices, you know, from the March and April 26 levels of, you know, over $100 a barrel to the current $80 levels that we are having at the moment, and you know our major inputs—input raw materials for the petrochemical monomers, and especially amines—because in the last call it was mentioned that there was a significant increase in the price of these raw materials.

Norris Crasto: Yes. Thank you. Thank you so much. My question is, with the softening crude prices from the March and April 2026 levels of over INR 100 a barrel to the current INR 80 levels that we are having at the moment, and our major input raw materials for the petrochemical monomers and especially amines, because in the last concall it was mentioned that there was a significant increase in the price of these raw materials. With the crude softening, I just wanted to know how would this impact our input costs for the upcoming quarters?

Speaker #7: You know, with the crude softening, okay, I just wanted to know how would this impact our input cost for the upcoming quarters.

Speaker #8: So directionally what you're saying is correct any hardening impacts us and right now while there's been you know some drop at the same time we have seen fluctuations as well the geopolitical situation as we always been extremely uncertain so it's still I think you know extremely fluid and fluctuating and but over time yes I think you know as things stabilize as the you know the benchmark crude prices come down and settle down at a much lower level or before the geopolitical crisis level definitely our input costs will also start improving and we should be able to come out of the current situation we definitely see a little bit of softening but you know it is still you know yet to pan out fully and we continue to observe the situation very closely you know as we speak.

Indraneel Dutt: Directionally, what you are saying is correct. Any hardening impacts us. Right now, while there has been some drop, at the same time, we have seen fluctuations as well. The geopolitical situation has always been extremely uncertain. It is still, I think, extremely fluid and fluctuating. Over time, yes, I think as things stabilize, as the benchmark crude prices come down and settle down at a much lower level or before the geopolitical crisis level, definitely our input costs will also start improving, and we should be able to come out of the current situation. We definitely see a little bit of softening, but it is still yet to pan out fully, and we continue to observe the situation very closely as we speak.

Speaker #7: Right. And just on the on the UP legacy contract in the previous on-call you know management had indicated that this should be fully resolved by you know the end of this calendar year okay.

Norris Crasto: Right. Just on the UP legacy contract, in the previous concall, management had indicated that this should be fully resolved by the end of this calendar year. Could you just give us an update on where we stand currently? Are we, as you said, out of the woods in the coming quarter or the quarter after that or within this financial year? Are we still on track with the earlier guidance? Just a clarification on how many legacy contracts there are. Is it just the UP legacy contract or is there another legacy contract as well?

Speaker #7: Could you just give us an update on where we stand currently and are we like as you said you know out of the woods you know in the coming quarter or the quarter after that or within this financial year are we still on track with the earlier guidance and just a clarification on how many legacy contracts there are.

Speaker #7: Is it just the UP legacy contract, or is there another legacy contract as well?

Speaker #8: So first of all, I’d like to correct the understanding. I do not think that we have said that, you know, the UP contract will be fully over in this financial year.

Indraneel Dutt: First of all, I would like to correct the understanding. I do not think that we have said that the UP contract will be fully over in this financial year. We have always maintained that our effort, our teams are mobilized across all the locations, and our effort remains to close the project as quickly as possible. Having said that, it is entirely dependent on the fund flow that is coming into these projects. That has been severely constrained and restricted in the whole of the last financial year. We are happy to note that some trickling of funds have started. There is some progress we are making. However, I think it will be far too premature to say that the project will be closed in this financial year.

Speaker #8: We've always maintained that we this we have always maintained that our effort our teams are mobilized across all the locations and our effort remains to close the project as quickly as possible having said that it is entirely dependent on the fund flow that is coming into this projects which we are all aware that has been severely constrained and restricted in the whole of the last financial year we are happy to note that some trickling of funds have started there's some progress we are making however I think it will be far too premature to say that you know the project will be closed in this financial year as of now the way the funds flow are happening it will spill over to the next year because there's a huge amount of work that is still left to be done we continue to remain extremely keen to get this work done we are fully mobilized having said that we do not want to increase our exposure as a company to more you know receivables unless and until the funds flow happen having said that directionally the last three months has been positive for us and we hope that if this continues I think in the next two year which is this year and the next year I think we should be able to see a major part of the project done with respect to your other question about how many legacy projects I mean we typically don't give the number of the such projects but there's one very large project and you know and then there are a few others smaller ones but you know apart from the UP project there's at least one large project that we continue to work through as I said we continue to grind through a significant part of that work is done but we still have you know a lot of ground still to cover.

Indraneel Dutt: As of now, the way the funds flow are happening, it will spill over to the next year because there's a huge amount of work that is still left to be done. We continue to remain extremely keen to get this work done. We are fully mobilized. Having said that, we do not want to increase our exposure as a company to more receivables unless and until the funds flow happen. Having said that, directionally, the last three months has been positive for us, and we hope that if this continues, I think in the next two years, which is this year and the next year, I think we should be able to see a major part of the project done.

Indraneel Dutt: With respect to your other question about how many legacy projects, I mean, we typically don't give the number of such projects, but there's one very large project, and then there are a few other smaller ones. Apart from the UP project, there's at least one large project that we continue to work through. As I said, we will continue to grind through. A significant part of that work is done, we still have a lot of ground still to cover.

Speaker #7: Right. I just wanted to just elaborate a little bit more on this if you may. You know in terms of the quantification of this year this this financial year and the next financial year what percentage of the legacy contracts overall now that you're saying there's more than one legacy contract what quantification would you say like would we finished in this year in percentage wise and in the next year?

Norris Crasto: Right. Just wanted to elaborate a little bit more on this, if you may. In terms of the quantification of this financial year and the next financial year, what percentage of the legacy contracts overall, now that you're saying there's more than one legacy contract? What quantification would you say would be finished in this year percentage-wise and in the next year?

Speaker #8: So from a legacy I'm leading the UP project out because the UP project is clearly you know government fund driven project there's no other issue apart from the flow of government funds okay but having said that you will all appreciate that you know keeping a site mobilized you know you know increase increasing interest cost on outstanding receivables those also are tailwinds for the solutions business and those are also reflecting in our performance numbers but leaving that project out you know the other legacy projects we believe a significant part of the work will be completed in this financial year especially for the large project so we we would ideally want to close everything out but at this point in time we are saying a significant part of that big legacy project should you know should make progress you know by the end of this financial year again we have to keep in mind it's a quasi government contract and the progress clearly depends upon how fast the client wants to progress this plant will be commissioning is linked to the customers readiness to commission the plant till the customers ready to commission the

Indraneel Dutt: I'm leaving the UP project out because the UP project is clearly government fund driven project. There's no other issue apart from the flow of government funds. Okay? Having said that, you will all appreciate that keeping a site mobilized, increasing interest costs on outstanding receivables, those also are tailwinds for the solutions business, and those are also reflecting in our performance numbers. Leaving that project out, the other legacy projects, we believe a significant part of the work will be completed in this financial year, especially for the large project. We would ideally want to close everything out, at this point in time, we are saying a significant part of that big legacy project should make progress by the end of this financial year.

Indraneel Dutt: We have to keep in mind it's a quasi-government contract, and the progress clearly depends upon how fast the client wants to progress. This plant will be commissioning is linked to the customer's readiness to commission the plant. Till the customer is ready to commission the plant, we'll not be in a position to step out of that project site.

Speaker #1: A plant will not be in a position to step out of their project site.

Speaker #2: Right . Right And just the final question for congratulations on the contract . But , you know , with the current geopolitical situation going on and the supply being in in Iraq and this directly comes under the Strait of Hormuz exposure , do you see any deferral in the commitments or do you see this being on track

Norris Crasto: Right. Just a final question. Firstly, congratulations on the Hyundai contract. With the current geopolitical situation going on and the supply being in Iraq, and this directly comes under the Strait of Hormuz exposure, do you see any deferral in the commitments, or do you see this being on track?

Speaker #1: At this point in time? I think we just picked up the contract as we speak. The kick-off meetings are happening.

Indraneel Dutt: At this point in time, I think we just picked up the contract. As we speak, the kickoff meetings are happening. We're not directly supplying to the end customer, but to an EPC, as we've already spelled out the name. We don't anticipate any delay as of now. However, if the crisis geopolitically continues, then there'll be cause for worry. At this point in time, we feel good with the timelines that has been there in the contract.

Speaker #1: You know , directly supplying to the end customer . But to an EPC as we've already spelt out the name , we don't anticipate any delay as of now However , if the crisis geopolitically continues , then you know there will be cause for worry at this point in time .

Speaker #1: We feel good with the timelines. They have been there in the contract.

Speaker #3: And I would just like to add, the contractual term for Ion Exchange is FOB Mumbai. So we have to hand over the goods to...

Vasant Naik: I would just like to add the contractual term for Ion Exchange are FOB Mumbai, so we have to hand over the goods at the Mumbai port.

Speaker #3: At the Mumbai port . So our contractual . This liability ends once we hand over in Mumbai . We are not responsible for the transportation .

Norris Crasto: Fantastic

Vasant Naik: contractual liability ends once we hand over goods in Mumbai. We are not responsible for the transportation.

Speaker #2: Right. Yeah. Thank you. Thank you for that. That's all from me. Thank you.

Norris Crasto: Right. Yeah. Thank you. Thank you for that. That's all from me. Thank you.

Speaker #4: Thank you. The next question comes from the line of Richard Chaudhuri with Electron Beams. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Richa Chaudhary with Electrum PMS. Please go ahead.

Operator: Thank you. The next question comes from the line of Richa Chaudhary with Electrum PMS. Please go ahead.

Speaker #5: Yeah . Hi , sir . Thank you for the opportunity . So my question is specific to the plant . You had previously guided 25% utilization for the first year of operation .

Richa Chaudhary: Yeah. Hi, sir. Thank you for the opportunity. My question is specific to the Roha plant. You had previously guided 25% utilization for the first year of operation. Given the current geopolitical situation, do we still have the visibility for the same, or how are we seeing that?

Speaker #5: Given the current geopolitical situation, do we still have visibility for the same, or how are we seeing that?

Speaker #1: So we continue to hold on , ma'am . This is about four months of the year gone . It has been softer than than what we expected .

Indraneel Dutt: We continue to hold on, ma'am. This is about four months of the year gone. It has been softer than what we expected. At this point in time, we are not throwing in the towel. We are still holding on and working with our teams in the overseas geographies and with our plants to see that we are able to meet the guidance. If and when, I think by the end of Q2, we will be in a better position to come back and share with you, depending on how we progress in Q2, ma'am.

Speaker #1: But at this point in time , we are not throwing in the towel . We are still holding on and working with our teams in the overseas geographies and with our plants to see that we are able to meet the guidance so if and when I think by the end of the second quarter , we'll be in a better position to come back and share with you , depending on how we progress in this quarter .

Speaker #1: Ma'am

Speaker #5: Okay . And secondly , on the consumer segment , now that the consumer segment is three 5400 crores of the scale at what scale do we expect it to start making profits ?

Richa Chaudhary: Okay. Secondly, on the consumer segment. Now that the consumer segment is INR 350 to 400 crores of the scale, at what scale do we expect it to start making profits, and what is the optimum profit margins that we expect from this business probably in the next three to four years?

Speaker #5: And what are the optimum profit margins that we expect from this business, probably in the next three to four years?

Speaker #1: So our plan, as we have said in past calls, is to see if we can break even in this financial year. That's the first target for us, as and when we reach that.

Vasant Naik: Our plan, as we have said in past calls, is to see if we can break even in this financial year. That is the first target for us. As and when we reach that milestone, we would be in a position to talk about what kind of single-digit margins we are talking about. Right now, our first objective for the team and the company is to see if we can break even with this level of growth in this financial year.

Speaker #1: You know , milestone , we would be in a position to talk about , you know , what kind of single digit margins we're talking about .

Speaker #1: But right now, our first objective for the team and the company is to see if we can break even, you know, at this level of growth in this financial year.

Speaker #5: Okay. Thank you so much.

Richa Chaudhary: Okay. Thank you so much.

Speaker #4: The next question comes from the line of Prateek Katari with Unique PMS. Please go ahead.

Operator 3: The next question comes from the line of Pratik Kothari with Unique PMS. Please go ahead.

Operator: The next question comes from the line of Pratik Kothari with Unique PMS. Please go ahead.

Speaker #6: Yes . Hi . Thank you again . So my first question on the chemicals . So so last quarter we had called out the effect of RUR on the profitability .

Pratik Kothari: Yes. Hi. Thank you again. My first question on the chemicals. Last quarter, we had called out the effect of Roha on the profitability, if we can do the same this quarter. Ex of CapEx depreciation OpEx, what would margins look like on the chemical side?

Speaker #6: If we can do the same this quarter . So X of k depreciation opex . What would margins look like . So on the chemical side

Speaker #3: The impact on the chemical segment margin was approximately 6%. At the segment level,

Vasant Naik: The impact of Roha on the chemical segment margin was approximately 6% at the segment level.

Speaker #6: Okay . So so the 15 percentage points that we see decrease from last year . Q1 you said six comes from . So there is a material compression in gross margins when it comes to chemical in general .

Pratik Kothari: Okay. The 15 percentage points that we see decrease from last year Q1, you said six comes from Roha. There's a material compression in gross margins when it comes to chemicals in general.

Speaker #3: Yeah . Because in the last first quarter of the last year , we also had a foreign exchange gain . So in the current quarter , there is no foreign exchange gain .

Vasant Naik: Yeah, because in Q1 of the last year, we also had a foreign exchange gain. In the current quarter, there's no foreign exchange gain. That impact is almost around 3% to 4%. As we mentioned that because of the input cost increase, we have gone for the price increases across all the customers and the segments. There is a time lag in passing of the cost increases. That also has contributed to the overall margin erosion.

Speaker #3: So that impact is almost around 3 to 4%. And as we mentioned, because of the input cost increase, we have gone for the price increases.

Speaker #3: Across all the customers and the segments . But there is a time lag in passing of the cost increases . So that also has contributed to the overall margin erosion But as we mentioned , we are experiencing certain moderation in the input costs .

Pratik Kothari: Correct.

Vasant Naik: As we mentioned, we are experiencing certain moderation in the input costs. Going forward, if the crude remains at a softer level, we do expect some of the input cost increases, which we have seen in the past 2 quarters. We should see a moderation in that, and hopefully some amount of margin should we'll be able to plow back in the current year.

Speaker #3: So going forward , if the crude remains at a softer level . So we do expect some of the input cost increases which we have seen in the past two quarters .

Speaker #3: We see moderation in that. And hopefully some amount of margin should be able to—we’ll be able to flow back in the current year, correct?

Speaker #6: Correct . The second on this Bo and boot projects that we kind of now , I mean , the Oman one that we run , have we earmarked what kind of maximum capital of our balance sheet would want to kind of because the capital kind of gets blocked for a longer period of time .

Pratik Kothari: Correct. Second on this BO and BOOT projects that we kind of now, I mean, the Oman one that we won. Have we earmarked what kind of maximum capital of our balance sheet we would want to kind of occupy? Because the capital kind of gets blocked for a longer period of time. I'm sure you get better IRRs, et cetera. Any earmarking of how much capital will we spend chasing such kind of orders?

Speaker #6: I'm sure you'll get better IRR, etc., but is there any earmarking of how much capital will be spent or chasing such kind of orders?

Speaker #1: Yeah , we will not be able to share any specifics with you , but we are aware , I think it's a very valid point that you mentioned , which is what I called out myself when we talked .

Vasant Naik: Yeah, we'll not be able to share any specifics with you, we are aware. I think it's a very valid point that you've mentioned, which is what I called out myself when I was answering another question on life cycle services. Yes, those are better margin profiles, they kind of put us under pressure in a different way. We will continue to be very, very selective as we look at those projects. All of those considerations, as you said, will be kept in mind as we grow this BOOT segment. There are multiple ways of doing it, we are exploring all possible options. We would want to remain as asset-light as possible.

Indraneel Dutt: Yeah, we'll not be able to share any specifics with you, we are aware. I think it's a very valid point that you've mentioned, which is what I called out myself when I was answering another question on life cycle services. Yes, those are better margin profiles, they kind of put us under pressure in a different way. We will continue to be very, very selective as we look at those projects. All of those considerations, as you said, will be kept in mind as we grow this BOOT segment. There are multiple ways of doing it, we are exploring all possible options. We would want to remain as asset-light as possible.

Speaker #1: I was answering another question on life cycle services . So yes , those are better margin profiles , but they , you know , kind of put us under pressure in a different way .

Speaker #1: So we will continue to continue to be very , very selective as we look at those projects and , you know , all of those considerations , as you said , will be kept in mind as we grow this boat segment .

Speaker #1: And there are multiple ways of doing it. So, we are exploring all possible options, but we would want to remain as asset-light as possible.

Speaker #6: So currently, our life cycle would be largely on spares, etc. I mean, we do not have material BOO or BOOT projects. So, this 10-12% margin for O&M and spares seems very low compared to maybe what others report.

Pratik Kothari: Currently our life cycle would be largely O&M spares, et cetera. I mean, we don't have material BO or BOT project there. The 10% to 12% margin for O&M and spares seems very low compared to maybe what others report. Can you highlight, I mean, what goes on behind this?

Speaker #6: If you can highlight, I mean, what goes on behind this?

Speaker #1: Yeah . The reason for that is it's not wall to wall . So because a lot of the profits are there in our products segment , a lot of the profits are there in our chemicals segment .

Vasant Naik: Yeah. The reason for that is it's not wall to wall. Because a lot of the profits are there in our products segment, a lot of the profits are there in our chemicals segment. The life cycle services do not report. It's not wall-to-wall profitability numbers. The wall-to-wall profitability numbers of the company is significantly higher and will be comparable, if not better, than what you see from other companies. This is just as a result of what the life cycle services P&L reports, not wall to wall.

Indraneel Dutt: Yeah. The reason for that is it's not wall to wall. Because a lot of the profits are there in our products segment, a lot of the profits are there in our chemicals segment. The life cycle services do not report. It's not wall-to-wall profitability numbers. The wall-to-wall profitability numbers of the company is significantly higher and will be comparable, if not better, than what you see from other companies. This is just as a result of what the life cycle services P&L reports, not wall to wall.

Speaker #1: The speciality chemicals life cycle services do not report . It's not wall to wall profitability numbers . The wall to wall profitability numbers of the company is significantly higher .

Speaker #1: And will be comparable , if not better , than what you see from other companies . This is just , you know , as a result of what the life cycle services PNL reports , not wall to wall .

Speaker #6: And then lastly, on this legacy, have the cost overruns or the losses that we are reporting gone up materially from what they were a year or two back?

Pratik Kothari: Fair enough. Lastly on this legacy, has the cost overrun or the losses that we were reporting gone up materially from, say, what it was a year or two back?

Speaker #1: So the project continues to , you know , progress in execution . And as a result of which there is obviously , you know , the project progress is dependent on a how the customer , how fast the customers , you know , progressing there .

Vasant Naik: No, the project continues to progress in execution and as a result of which there is, obviously, the project progress is dependent on, as I said, how the customer, how far the customer's progressing there. There are site conditions that decide how fast the project will move. Obviously, in a project of this nature, because of a longer time delay, there'll be some element of costs. We continue to work on that with our project execution teams and keep a track. Clearly, some of the headwinds on the treatment solution number that you see does come from the impact of overruns on this particular project. It's a large project in the portfolio, so something that does impact. It's anyway a segment where you don't make as much profitable margins as you make on our specialty chemicals or our product numbers or our services for that matter.

Indraneel Dutt: No, the project continues to progress in execution and as a result of which there is, obviously, the project progress is dependent on, as I said, how the customer, how far the customer's progressing there. There are site conditions that decide how fast the project will move. Obviously, in a project of this nature, because of a longer time delay, there'll be some element of costs. We continue to work on that with our project execution teams and keep a track. Clearly, some of the headwinds on the treatment solution number that you see does come from the impact of overruns on this particular project. It's a large project in the portfolio, so something that does impact. It's anyway a segment where you don't make as much profitable margins as you make on our specialty chemicals or our product numbers or our services for that matter.

Speaker #1: There are site conditions that , you know , decide how fast the project will move . And so obviously , you know , in a project of this nature , because of longer time delays , there will be some element of , of costs .

Speaker #1: We continue to work on that with the , you know , with our project execution teams and keep a track . But clearly some of the , you know , some of the headwinds on the treatment solution numbers that you see , you know , does come from the impact of , overruns on this particular project .

Speaker #1: It's a large project in the portfolio, so it's something that does have an impact, you know, in a segment where you don't make as much profit margin as you do on specialty chemicals or our product numbers, right?

Speaker #1: Or our services, for that matter. On top of that, there is a large project that's a drag. It doesn't help our cause.

Vasant Naik: On top of that, there's a large project that's a drag. It doesn't help our cause. We continue to grind through that and hopefully once that is over, then the true picture of the treatment solutions performance will be out for everyone to see.

Indraneel Dutt: On top of that, there's a large project that's a drag. It doesn't help our cause. We continue to grind through that and hopefully once that is over, then the true picture of the treatment solutions performance will be out for everyone to see.

Speaker #1: So we continue to grind through that, and hopefully once that is over, then the true picture of the treatment solution's performance will be out for everyone to see.

Speaker #6: And we don't intend to call that out right now. Example of legacy: What does treatment—

Pratik Kothari: We don't intend to call that out right now, ex of legacy orders treatment?

Speaker #1: Know ? I mean , we we are not it doesn't help the purpose . The numbers remain the same .

Indraneel Dutt: I mean, it doesn't help the purpose. The numbers remain the same.

Speaker #6: , right ? Correct . And just to reconfirm this , Hyundai order , this is nothing EPC this is just pure supply of products

Pratik Kothari: Correct. Just to reconfirm this Hyundai order, this is nothing EPC in that. This is just pure supplier product.

Speaker #1: So it is a solution that we are offering . It's but it's a it's a lot you know , less risky version of a solution .

Indraneel Dutt: It's a solution that we are offering. It's a lot less risky version of a solution, if you'd want to put it that way, which is why we feel good about what we picked up.

Speaker #1: We'd want to put it that way, which is why we feel good about what we picked up.

Speaker #6: Got it. No, great. Thank you, and all the best. Thank you.

Pratik Kothari: Got it. No, great. Thank you and all the best. Thank you.

Speaker #4: Thank you. The next question comes from the line of Saket Kapoor with Kapoor and Co. Please go ahead.

Operator 3: Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Operator: Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Speaker #6: Yes .

Saket Kapoor: Yes. Namaskar, sir. Hope I'm audible, sir.

Speaker #7: Hi, namaskar, sir. Hope I'm audible, sir.

Speaker #1: Yeah. Namaskar. You?

Indraneel Dutt: Yeah, namaskar. You are audible.

Speaker #7: Yeah , sir . Sir . Thank you . Firstly , for the elaborate discussion . But I . I missed a part of the your opening remark also .

Saket Kapoor: Yeah, sir. Sir, thank you firstly for the elaborate discussion, but I missed a part of your opening remark also, so pardon me for any repetition. Sir, as earlier participant has also outlined about the path to profitability, if you could just explain to us, especially for the category of treatment solution, wherein I think the legacy contract part losses have been booked. How do you see, as we progress through the year, how are things going to shape up, firstly? Secondly, for the UP Jal Jeevan project part, in percentage terms or in value terms, can you quantify what is the unexecutable portion and how much is receivable from them as on March and as on 30 June?

Speaker #7: So pardon me for for any repetition . But sir , as earlier participant has also are outlined about the path to profitability . If you could just explain to us the especially for the category of treatment solution wherein I think .

Speaker #7: So the legacy contract part losses have been booked . How do you see the the as as we progress through the year , how are things going to shape up ?

Speaker #7: And secondly , for the U . P just given project part . In percentage terms or in value terms , can you quantify what is the executable portion and how much is the receivable from them as on March and as on 30th June .

Speaker #1: So I'll request Vasanth to answer the latter portion, but I'll answer the first part of your question, which is, I see clearly on the treatment solutions business.

Indraneel Dutt: I'll request Vasan to answer the UP portion, but I'll answer the first part of your question, which is, see, clearly on the Treatment Solutions Business, these are project businesses, so there is no easy fix here. As an example, a little bit of the past in case any of you have been tracking the company, you benefited from the great project in Sri Lanka that the company had done, both in terms of top line and bottom line over a very long time. Some of these large projects do take time to kind of get to the full impact. We're working through that on that legacy project. We continue to strengthen and improve our effectiveness across all parts of the EPCM value chain for our Treatment Solutions Business.

Speaker #1: Is a project business . So there is no easy fix here . You know , I mean , as an example , it's a little bit of the past in case any of you have been tracking the company , you know , you've benefited from the great project in Sri Lanka .

Speaker #1: And the company has done both in terms of top line and bottom line over a very long time . So some of these longer this large projects do take a time to kind of , you know , get through the full impact .

Speaker #1: So we're working through that on that legacy project. We continue to strengthen and improve our effectiveness across all parts of the E value chain for our treatment solutions business.

Speaker #1: We continue to be very, very selective in what kind of projects we are picking up. And that's evident in a couple of things we talked about earlier.

Indraneel Dutt: We continue to be very selective in what kind of projects we are picking up, and that's evident in a couple of these we talked about earlier part of the call, including this Hyundai contract that we got. We continue to focus on looking for advanced and emerging solutions, high-tech solutions away from commoditized offerings. All of these are steps that we are taking to fundamentally improve the mix profile of the Treatment Solutions Business, move away from commoditized EPC towards more where we can add value, work on areas around resource recovery, around new technologies, green hydrogen, ultra pure water, high purity water. All of that is being done to fundamentally improve the profile and the mix of the Treatment Solutions Business, which will play out for us to advantage in the medium to longer term.

Speaker #1: Part of the call in putting this contract that we got , we continue to focus on looking for advanced and , you know , emerging solutions , high tech solutions away from commoditized offerings .

Speaker #1: So all of these are steps that we are taking to fundamentally improve the , you know , mix profile of the treatment solutions business , move away from commoditized PC towards more where we can add value , work on areas , you know , around resource recovery around , you know , around , you know , new technologies in hydrogen ultrapure water , high purity water , all of that is being done to fundamentally improve the profile in the mix of the treatment solutions business , which will play out for us to advantage in the medium to longer term , short term .

Indraneel Dutt: Short term, unfortunately, we have to bear the pain and go through some of these legacy contracts. Unfortunately, I don't have a better answer or a more positive answer for you, but it's a reality. I'll let Vasan answer the question.

Speaker #1: Unfortunately , we have to bear the pain and go through some of these legacy contracts . So that's unfortunately , I don't have a better answer or a more positive answer for you , but it's a reality .

Speaker #1: I answer the question of you.

Saket Kapoor: If I may just squeeze in, sir, here. We as investors can conclude that even today also, worst is not behind in terms of this translating into the P&L. The P&L flow for this quarter at a revenue of INR 200 crore, the bottom line is depleted by INR 18 crore. Is the worst of the pain behind us, or at least you can give what path are we going to glide going ahead for this category?

Speaker #7: If I may just if I may just squeeze in here . So , so we can be as investors can conclude that even today , the worst is not behind in terms of this translating into the PNL , the PNL flow for this quarter at a revenue of 200 crore , the bottom line is depleted by 18 crore .

Speaker #7: So, is still the worst of the pain behind us, or at least can you give—what path are we going to glide going ahead for this category?

Speaker #1: What I said is that, you know, a significant part of the project is behind us, but also a sizable amount is left.

Indraneel Dutt: What I said is that a significant part of the project is behind us, but also a sizable amount is left. That is as much quantification or proportion I can share with you. As I said, we are picking up other projects. The way to kind of moderate the impact of this project is to pick up more profitable projects. That's what you see us doing in Hyundai. As and when that comes into play, it'll moderate down the impact of this large project. We continue to work on finding good opportunities, which will moderate this impact down till we can say we are fully done with that job. That's the effort that we're working on.

Speaker #1: That is as much quantification or proportion . I can share with you . We and as I said , we are picking up other projects .

Speaker #1: You know, the way to kind of moderate the impact of this project is to pick up more profitable projects. So that's what you see us doing in Hyundai as well.

Speaker #1: And when that comes into play , it will moderate down . The impact of this large project . So we continue to work on finding good opportunities , which will monitor this impact down till we can say we are fully done with that job .

Speaker #1: That's the effort that we are working on.

Speaker #7: Okay .

Saket Kapoor: Okay.

Speaker #1: And

Indraneel Dutt: On the UP one, Vasan will answer.

Speaker #7: Yes .

Saket Kapoor: Yes.

Speaker #3: Rupee Unexecuted portion is around 11% of the order backlog as of June . Our order backlog was around 2477 crores . And in terms of the exposures on the accounts receivable , we don't call out separately on the contract specific details .

Vasant Naik: Yes. The UP unexecuted portion is around 11% of the order backlog as of June. Our order backlog was around INR 2,477 crores. In terms of the exposures on the accounts receivable, we don't call out separately on the contract specific details, but as we have mentioned in the previous calls, we are moderating and calibrating our execution in proportion to what funding is received from the government on this project. Materially, our exposure has not changed over the past few quarters.

Speaker #3: But as we have mentioned in the previous calls, we are moderating and calibrating our execution in proportion to what funding is received from the government on this project.

Speaker #3: So, materially, our exposure has not changed over the past few quarters.

Speaker #4: Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments.

Operator 3: Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments.

Operator: Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments.

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

Speaker #8: Thank you for participating in the earnings call 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 Advisor.

Speaker #8: Thank you

Speaker #4: Thank you ma'am , on behalf of Ion Exchange India Limited , that concludes this conference . Thank you for joining us . And you may now disconnect your lines .

Operator 3: Thank you, ma'am. On behalf of Ion Exchange (India) Limited, that concludes this conference. Thank you for joining us, you may now disconnect your lines. Thank you.

Operator: Thank you, ma'am. On behalf of Ion Exchange (India) Limited, that concludes this conference. Thank you for joining us, you may now disconnect your lines. Thank you.

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Q1 2027 Ion Exchange (India) Ltd Earnings Call

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