Ion Exchange shares jump nearly 11%; brokerage assigns 'Buy', check target

Shares of Ion Exchange (India) Ltd surged 10.76 per cent in Monday's trade to hit a high of Rs 453.50.

AUM Capital, in a recent note, highlighted Ion Exchange's diversified revenue profile, with its engineering, chemicals and consumer products divisions contributing around 61 per cent, 29 per cent and 10 per cent, respectively, to sales. The brokerage said the company has a diversified product and customer base across industries including solar, pharmaceuticals, petrochemicals and refineries, power, steel, sugar, electronics, pulp and paper, textiles, cement and automobiles.

The brokerage also pointed to Ion Exchange's acquisition of Portugal-based MAPRIL, completed in June 2023, saying it provides the company with better access to markets in and around Europe.

At the end of Q1 FY27, Ion Exchange had an order book of around Rs 2,473 crore, according to AUM Capital.

Roha plant

AUM Capital said Ion Exchange's Roha plant is currently operating at around 25 per cent of capacity and is expected to take about four years to reach full capacity. The brokerage expects margins to remain in the range of around 18 per cent-24 per cent.

Around Rs 275 crore of the company's expenditure went into the core manufacturing plant, while the facility has the potential to generate annual sales of around Rs 500-550 crore, AUM Capital said.

The brokerage also highlighted the Water Quality Association (WQA) certification received by the company, which it said enables direct exports to drinking water treatment markets in North America, the UK and Europe.

'Buy' rating

AUM Capital said Ion Exchange has long-term potential, citing its position in the water-treatment industry, healthy order book and diversified product profile.

The brokerage said the Roha plant could provide production advantages by enabling the local manufacture of advanced ion-exchange resins to cater to domestic and global demand.

Based on its assessment, AUM Capital recommended a 'Buy' rating on Ion Exchange with a target price of Rs 468 over the next 9-12 months.

Ion Exchange was formed in 1964 as a subsidiary of the UK-based Permutit Company. It became an Indian company in 1985 after Permutit divested its stake.