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 2:00 PM to 3:00 PM, and then the Q1 FY '27 earnings call will start at 3:00 PM till 4:00 PM.

In case a 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. 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 Dutta, Managing Director and CEO; Mr. Vasant Naik, Group Chief Financial Officer; and Ms.

Nikisha Solanki, Company Secretary. Without any delay, I request Mr.

Indraneel Dutta to start with his remarks on classification of segments. Thank you and over to you, sir.

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 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 imperative behind the reclassification.

We also already have 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 2:00 to 3:00 to take 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 that presentation.

That hopefully will conclude the first segment of our conversation. From 3:00, we will follow it up with a regular 1Q '27 earnings conference call where we will discuss our operational financial performance under the revised reporting framework for the quarter just concluded, which is first quarter of fiscal 2027.

That's 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 in a very briefly, giving you an overview. Once that is done, and that itself will explain a lot of the questions that you may have.

Any further follow-up questions, we'll be very happy to take and answer for you. Okay?

I refer to the overview first page where we've given the company snapshot, where the company is into 62 years of operation in 50+ countries. We have one of the largest service networks in the Asia-Pacific region, about 200,000+ worldwide installations, including 3,000+ core industry 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 resin as well as membrane technology based.

We also are into industrial wastewater treatment, recycle, and zero liquid discharge. 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 ZeroB consumer products portfolio. The next page captures the core offerings of the company.

This 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. We also offer standard systems and plants, home water solutions, and digital solutions.

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've 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.

Then the next three pages of the presentation covers our solutions offerings. 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.

This typically has been the base and the core foundations of solutions that the company has been offering for the last 60+ years. 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 we have done in various parts of the world, including in Morocco in the last couple of years. We've also gotten to 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. 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 ZeroB 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 and PFAS, not only in terms of PFAS treatment plus also absorption and destruction using various technologies including foam fractionation.

The company has 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. 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 on is on digital solutions and portfolio where we are trying to offer IoT-enabled smart products and offerings, and allowing our customers and our assets to both be monitored, connected, analyzed, as well as optimized for predictive future monitoring. In terms of our global presence, we are present in serving 50+ countries.

30% of the company's revenue come from our international markets. We have 14 global manufacturing and assembly facilities with 200,000+ installations.

The next page talks about all our project locations. 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 a mother facility for specialty chemicals, and then we also have our blending facilities in Saudi Arabia in Dammam, which is operational, as well as in Mafra in Portugal.

Our standard 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 the core of the company. The R&D facility of the company was founded in 1965, with 50+ patents till date and 100+ 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 focus 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.

Then given a glimpse in the presentation about our human capital. We have a team of about 3,500+ professionals with competencies and capabilities spread across 15+ countries, with competencies in EPC and projects of about 650+ people, in products and manufacturing about 600+ people, in consumer and retail, which is our ZeroB product line, we have about 1,400+ people, and then 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 6 to 7 years, and that is one of the rationale which has led to this reclassification of our reporting numbers. We've all been talking about the Roha facility, which we've shown a picture earlier and this is another part of the plant, where the capacity expansion for our flagship business, the ion exchange resin, has increased by 5 times.

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. It'll help us increase our share of the global market from current to at least by 4 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. 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 5 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 investment that the company has made. 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 6 times. There also, it'll 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. Also, this improves and gives us a much more repeatable, strengthened, 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 6 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. 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 3 times business growth over the years.

With this kind of a range that we are building in membranes in our Goa facilities, our second plant is coming up, 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. 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.

Both our membrane business and our standard plants business is a part of the industrial products 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 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+ operation maintenance contracts, we have a significant reach.

As I said in the beginning, we have one of the largest service network in the Asia-Pacific region. We have 35,000 customers served, pan-India presence, and 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 wing-to-wing 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're trying to build this service portfolio significantly across geographies, across the offerings, and across the solutions given. The last part of building scale, we have witnessed that is through our ZeroB home water solutions range, where we have been growing at a significant rate of 30-odd%, 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 are 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've talked mostly about our engineering business. What you'll 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 have moved on to advanced solutions, and also getting into 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 products 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. We 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 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, and 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, 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're starting to report the company from this financial quarter. The next page covers a little bit more of the reporting segments, is again a classification of what we've talked about in the past few pages.

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, and again, some of this we can even cover as part of the Q&A.

You will see that our treatment solutions business has grown significantly year-over-year. If you look at the CAGR over the last 4 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. Here, the EBIT has gone the other way, and 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, and again a little bit of softening due to some investments in the last year.

There also the CAGR had grown for the last 4 years, slight dip in the current year, which we expect to overcome in the current financial year. On life cycle services, I think a good story, 10% growth in revenue over the last few years.

Now that we're reporting these segments separately, but a very, very positive healthy 21% in growth in CAGR over that period of the last 4 years. Specialty chemicals and 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 their 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, and 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.

I wanted to give a voiceover the pages that you would have seen, and 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.

Good afternoon, sir. 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? Also, if you could just comment on the margins that we would be getting from that specific market.

Thank you.

If you could repeat, ma'am, which particular market segment you're talking about?

Sir, Spain and Portugal, we had this acquisition, we were going to expand in Europe. Just wanted to understand margins and scope of expansion there.

That business was acquired about 3 years back, and I think we have completed the integration of that product line. 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've 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 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 be catered to also from that entity, are fully leveraged. 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 geographies in the next 2 to 3 years will be significantly more.

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

We typically, ma'am, don't talk about specific margins for particular geography, but I would say that that again varies segment to segment. We talked about the 5 segments, the 4 of the 5 segments are present there, not 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.

Sir. Yeah.

Hi. Good afternoon and thank you.

Sir, my first question regarding this reclassification, if you can just go through what led to this, why this reclassification? Any corporate action per se that you expect on this?

Just thoughts behind doing this.

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, and then our pivot towards more solutions and advanced emerging solutions offerings. That is what we wanted to show separately because at a consol level, what we were able to share with you was a combination of these three segments 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 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 solutions business.

Sir, any thoughts on kind of listing this separately? Three different divisions that we have for any activity in there, any such thought?

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.

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 about 40% of the company.

A lot of work, a lot of investment, a lot of management bandwidth has been spent over the last 5 to 6 years in growing the products, the 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 planned.

It is more at offering more transparency and more perspective and color of how the company is performing across these segments.

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 resin capacity? If you can clarify this 5x number.

No, sir.

This is a global number, okay? We are talking about actually becoming a bigger global player in the market.

This again are 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.

No, point taken. Sorry, but coming back on this, last year, we had called out about 500 crores of resin revenue in our chemical business, roughly, give or take.

When we say 5x capacity expansion, what does that mean? No, sir.

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 5 times together of what we had in the past.

Just to reconfirm, 500 crores of resin revenue that we did last year, what we are seeing is post this debottlenecking in Roha, we can do 2,500 crores?

No. That was for the entire chemicals segment.

Our chemicals segment includes the specialty chemicals business also.

No, correct. Last year, specialty chemical, we reported about 900 crores of revenue, give or take.

500 of that was resin, 400 was water chemicals. What is it that

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

I'll take this offline if required

so.

Second, on this quarterly results, do we come back on that, or should I ask that now for the numbers?

We will come back. That'll be once this particular segment is over, then we will start that segment.

Correct. No, fair enough.

Thank you.

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, and are they pharmaceutical-grade resins or the ultrapure water resins for the semiconductor and EMS sectors? What would be the ballpark margin profile for them, and what's the timeline for securing this high-margin certifications required for these new lines?

That'll be all.

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, 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 higher quality and higher, higher specification grade product lines.

Also, at the same time, this will allow us to, the expansion in the pharma in, product line also will give us more specialty-grade resin product lines on the from pharma application stand standpoint. Across the board, we are moving more towards higher-end specialty specialty application grade while continuing to keep the, 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.

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 2 to 3 years from this segment?

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.

Right. We've also separated industrial products from 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?

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 there are smaller 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 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 this product lines outside India as well.

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.

Thanks. That'll be all from my end.

Thanks.

Hi. Thanks for taking my question.

It kind of ties up with your non-solvent capacity increase in your specialty chemicals business, but 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 non-polymer-based.

They're more carbon-based and other material-based because 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 how is this company also diversifying out into other-based resins?

Ion exchange resin is, 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 and specially more in developed markets like the US and Europe around how to deal with residual chemicals, specially very tough-to-treat chemicals which refuse to go away and don't get destroyed.

That's why they kind of get into this forever chemicals or PFAS category. Our company is already working.

I had talked about this in our emerging solutions portfolio, where in terms of both absorption through 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.

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 this applications can be met.

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 this forever chemicals.

What you're saying is that the company is actively also working towards creating a portfolio of non-polymer-based, or on a portfolio that tackles this issue of creating residual impact?

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 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.

Okay. Just last question.

On your treatment solutions business, your profitability, even in this presentation you put out, your profitability CAGR over 5 years has been pretty discouraging. Your EBIT has fallen from 60 crores to 27 crores.

I agree you've grown top line at a healthy double-digit revenue, but I'm just trying to understand what's the landscape now, as in what's happening, why is 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?

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, but they are kind of in the final stages.

I would not say final, but they are, I think, with 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 a much better risk profile, much better execution predictability, in terms of improving and strengthening our solutions business from a competency standpoint, in walking away from difficult projects, being a lot more selective, and that's what this experience has taught us. You've 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'd 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 tunes for our projects.

What you also see us doing this presentation is to see how we're trying 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 step away from it like you typically do on a media products deal, and 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. 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.

Thank you so much. I'll join back in the queue later.

Good afternoon, gentlemen, and thank you for taking my question. My question today is, I just wanted to ask about the North America business, and especially with the recent appointment of the CEO, Mr.

Sanjay Sapra, and also on the Water Quality Association certification. My questions particularly is, has this certification already started contributing to the revenue in the current quarter, and 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?

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, we'll try to give a perspective.

The appointment that you 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.

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. 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 state regulations.

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.

Yes, with the WQA certification, with our Roha plant commissioned, with our leadership team in place for 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.

Right. I highly appreciate the detailed answer, but 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?

The question on this current quarter we'll 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's 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.

Thank you. Thanks.

Yeah. Thank you for the opportunity.

Am I audible?

Yes.

Hi, sir. Sir, 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 will be expanding 6x in the next couple of years?

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. These pharma resins are not measured by volume, but value.

We believe that we have the necessary actions being put in place to get this up and done in the next 12 months.

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

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 know-how that helps us unlock that potential and the value.

We believe that we are on course to get that done in the next 12 months.

Sir, the asset turn would be Hello?

Sorry?

Sir, the asset turn would be similar to what we see in the Roha plant at around I think 2

to 2.5 times? It'll be quite more than that because it's a little bit of an asset-light investment, more on technology know-how and IP.

Okay. Sir, would it be possible to call out, as of FY '26, what was our revenue contribution from this pharma resins?

No, we don't do that. As and when the segment grows, as you see, our entire effort of this 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, but right now, this will continue to be classified under the specialty chemicals segment.

Okay. Sir, one last point.

I noticed in your presentation you had given a breakup of all the three segment, 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.

We will provide that to Valorem. Through Valorem, we'll be able to give.

Sure. Thank you so much, sir.

Hi, sir. Good afternoon.

My question was on this water treatment solutions basically. I was just looking at your presentation and I'm new to this company.

Maybe my questions will be basic, but I wanted to understand on you have written ultrapure water and high-purity water as a 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?

Yeah.

Ultrapure is more for solar and semiconductor and batteries, and 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 partly in the public domain, but we picked up a small project with a partner. We're very much in that space.

This is not a new space for the company. The company had done our ultrapure water project for Semiconductor Limited, Mohali, SCL Mohali, quite about 30 years back.

A lot of that knowledge resided in the company, but however, with the advancements in chip manufacturing, we've had to upgrade the technology of ours, worked with a partner, and I believe we have the best technology to offer for our customers in India and abroad.

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

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

A, they require very, very high-quality source water. Now, that again depends on the kind of water you get.

If you get municipality water, that'll be one investment requirement. 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 ultrapure water will be another investment level.

Then the wastewater that comes from this fabs also we need to get treated. Even those require very large treatment facilities.

In fact, the investments required to treat process water from this fabs is bigger than what you need for setting up ultrapure water plant. 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.

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

These are all customized plants. Unless and until, it's like if a large project depending on the size of the plant, yes, you'll have to It's like any other project pursuit that we do.

Just my last question on this entire treatment solutions business piece. You have got 1,100 crores kind of revenue last year with 27 crores of EBIT, right?

Your margins have been coming off when you have alluded to the fact that there were some large legacy projects that are getting over now. If I look at FY '21, '22, you did about 11, 12% kind of EBIT margins on a 500 crore kind of top line, right?

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 semiconductors and solar, where we have our capabilities, do you think we can go back to 10, 11% 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?

How should we look at this business overall?

See, first of all, I'll qualify your comment around the legacy project as we have been saying that while a substantive part of the project has been done, yet we don't quantify percentages, but 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, and 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, be very selective in what we pick up, and we have been very selective for the last couple of years. The jobs 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, where there are challenges, where there are few technology providers, and which is where the entire segment of advanced tech 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 valorization, water for electrolysis, lithium extraction.

These are high-tech spaces, and that is where we believe if we move towards that, 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.

Got it. Perfect.

That's it from my side. Thank you.

Yes?

What is it?

Good afternoon, everybody. This is Vasant Naik.

It is a pleasure to welcome you all to the earnings conference call for the first quarter of financial year 2027. For the first quarter 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%.

Now 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 Indian segment will now be reported under three distinct subsegments: treatment solutions, industrial products, and life cycle services. The treatment solution 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 sales 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.

Going forward, the growth will be supported by the expansion of our UF membrane manufacturing capabilities, enhanced capacity for the standard plants, and an increasing overseas presence. The life cycle 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, BOO, BOOT models, and digital solutions. Across these three businesses, our order book stood at INR 2,473 crores as of June 2026, 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. In addition, the bid pipeline stood at INR 9,777 crores, providing a strong opportunity funnel for future order inflows.

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 costs. 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 process chemicals remain an important growth area for us. Lastly, we come to the consumer product 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 45 lakhs in the corresponding quarter of last year, 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 OTGs.

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, 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.

Hi, thanks. 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 2 to 3 years after completing this challenging legacy projects and challenging time.

Some comments from him will be really helpful.

Good afternoon, Sunil ji. You could have heard from Indraneel 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, but 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, but quite a few challenging quarters.

As Indraneel mentioned, that legacy project overhang is still not over, but we are definitely trying to make sure that that has less of a bearing as we build in order book of more profitable contracts, larger contracts, not just in India, but substantially outside. 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 will be significant contributor to the top line.

I daresay, 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 hope, Sunil ji.

Thank you, sir. Thanks a lot for detailed reply.

Thanks a lot.

Hi. 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 full maximum revenue potential for the specialty chemicals business be versus 868 crores in FY '26?

We had said in the past that we expect, once the Roha plant achieves full capacity over the next 4 years, we should have a asset turnover of just under 2 times on the manufacturing CapEx what we are incurring. Currently, our specialty chemicals, as you just mentioned, is just under 900 crores for the year for 25 '26.

We expect substantial increase of at least 50% in this capacity over the next couple of years.

Okay. Sir, how do we see, this year going ahead in terms of, us the company bouncing back on profitability front?

Do do should we expect quarter-on-quarter improvement and still not getting back to those double-digit margins, or would would the situation still be tough for the next for this year ahead, given, the struggles you're facing in some verticals, expansion in some, etc.?

Yeah. I think, you're you're right.

I I agree that the performance in the first quarter has been disappointing. It's a combination, as we've said, some of the legacy projects that continue to we 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 everyday towards that, and as the volume start picking up in some of these overseas geographies that we talked about, we definitely see, the outlook improving.

As we said, as Vasant called out, the, order that we got from Hyundai for 500+ crores, it's a it's a very it's worth something that the team has been working on for quite some time. I think we're very happy with the with the blows and the overall profile and the, profitable profile of those projects.

As as we get more of such projects coming in, we definitely see the, the treatment solution business profile also improving. As Roha kicks in, in a stronger way as we have projected so far, we see the overall performance of the specialty chemical segment improving.

As our standard plants and membranes, are able to, expand or, post the investments made, we see those segments, coming up. 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 the profile of the of the bottom line of the company.

That is why we've voluntarily, split up into these five segments to, voluntarily be open to showing how we're performing in each of those. Yes, double-digit, profitability that I think was was the company has had done great at that point in time.

It'll be a process for us to get there, but I think we remain, fairly, fairly confident, though quietly confident that I think we have a path to get there. It'll take us, it's a process for us to go and reach there.

Even the focus on products, chemicals, 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.

Our focus to look at more emerging, advanced tech solutions is also part of that 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 refer to.

Thank you so much.

Hi. With respect to the restructuring of the life cycle services as a standalone pillar, do we expect the 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?

Clearly, this is a step partly in the direction that you talked about towards having a less capital-intensive growth plan, and also in the course of time, we will see we can use 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, a 20-year O&M concession, with one of our large industrial existing customers, Petroleum Development Oman.

We believe these will give us better revenue profile at a group level because some of the profitability of this O&M contracts also 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'd want to do more. Clearly, one of the areas that we will explore is to also look at BOOT and BOO contracts, but 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 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.

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?

The segments you've identified are absolutely correct and spot-on, and 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 you're 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're 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, which is with which we are playing in the market, 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, and that is what we are working towards. Not all the solutions are in place, but our teams are working, our technology teams, our leadership are working to see that we become one of the favored players in these spaces.

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

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 large project in India, but I think there are, again, other projects in the anvil.

It's going to only pick up over time. I think it's only how fast it happens is possibly something we need to see.

Thanks. That'll be all from my end.

All the best for the coming quarter.

Yes. Thank you.

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

With the crude softening, okay, I just wanted to know how would this impact our import cost for the upcoming quarters.

Directionally, what you're saying is correct. Any hardening impacts us.

Right now, while there's been some drop, at the same time we have seen fluctuations as well. The geopolitical situation, as we all know, has been extremely uncertain.

It's 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. We continue to observe the situation very closely as we speak.

Right. Just on the UP legacy contract, in the previous con-call, management had indicated that this should be fully resolved by the end of this calendar year, okay?

Could you just give us an update on where we stand currently, and 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?

I'd 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 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'll be far too premature to say that 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 receivables unless and until the funds flow happen. Having said that, directionally, the last 3 months has been positive for us.

We hope that if this continues, I think in the next 2 years, 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, we typically don't give the number of the 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 continue to grind through.

A significant part of that work is done, but we still have a lot of ground still to cover.

Right. Just wanted to just elaborate a little bit more on this if you may.

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 finish in this year in percentage-wise and in the next year? From our legacy,

I'm leaving the UP project out, because 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'll 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, but 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. 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.

Commissioning is linked to the customer's readiness to commission the plant. Till the customer is ready to commission the plant, we will not be in a position to step out of that project site.

Right. Right.

Just a final question, firstly, congratulations on the Hyundai contract, but with the current geopolitical situation going on and with 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?

At this point in time, I think we've just picked up the contract. As we speak, the kickoff meetings are happening.

You'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.

I would just like to add, the contractual terms for Ion Exchange are FOB Mumbai. We have to hand over the goods at the Mumbai port.

Our contractual liability ends once we hand over this in Mumbai. We are not responsible for the transportation.

Right. Yeah.

Thank you. Thank you for that.

That's all from me. Thank you.

Yeah. Hi, sir.

Thank you for the opportunity. Sir, 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?

We continue to hold on, ma'am. This is about 4 months of the year gone.

It has been softer than what we expected, but at this point in time, we're not throwing in the towel. We're 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 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, ma'am.

Okay. Secondly, on the consumer segment, now that the consumer segment is 350, 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 3 to 4 years?

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 milestone, we would be in a position to talk about what kind of single-digit margins we're 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.

Okay. Okay.

Thank you so much.

Yes, hi. Thank you again.

Sir, 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?

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

Okay. The 15 percentage points that we see decrease from last year Q1, you said 6 comes from Roha.

There is a material compression in gross margins when it comes to chemical in general.

Because in the first quarter of the last year, we also had a foreign exchange gain. In the current quarter, there's no foreign exchange gain, so 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, but there is a time lag in passing of the cost increases. That also has contributed to the overall margin erosion.

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 two quarters, we should see a moderation in that, and hopefully some amount of margin we'll be able to claw back in the current year.

Correct, correct. Sir, second, on this BOO and BOOT projects that we, from the Oman one that we won, have we earmarked what kind of maximum capital of our balance sheet we would want to, because the capital kind of gets blocked for a longer period of time.

I'm sure you get better IRRs, etc. Any earmarking of how much capital will be spent pursuing such kind of orders?

We'll not be able to share any specifics with you, but 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, but they kind of put us under pressure in a different way. We will continue to be a 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're exploring all possible options, but we would want to remain as asset-light as possible.

Sir,

currently, our life cycle would be largely O&M, spares, etc. We don't have material BOO or BOOT project there.

This 10, 12% margin for O&M and spares seems very low compared to maybe what others report. If you can highlight what goes on behind this?

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.

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.

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

No, the project continues to progress in execution. As a result of which, the project progress is dependent on, as I said, how fast the customer is progressing there.

There are site conditions that decide how fast the project will move. Obviously, in a project of this nature, because of longer time play, there will 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 numbers that you see does come from the impact of overruns on this particular project.

It's a large project in the portfolio, 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 products numbers, right, or our services for that matter. On top of that, with 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.

We don't intend to call that out right now, ex of legacy, what does treatment look like?

No, it doesn't help the purpose. The numbers remain the same.

Correct, correct. Just to reconfirm, this Hyundai order, this is nothing EPC in there, this is just pure supply of products?

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

Correct, correct. No, great.

Thank you and all the best. Thank you.

Yes. Namaskar, sir.

Hope I'm audible, sir.

Namaskar. You're audible.

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Sir. Sir, thank you firstly for the elaborate discussion, but I missed a part of your opening remark also.

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 so 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 the receivable from them as on March and as on 30th June?

I'll request Vasant 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, there's no easy fix here. As an example, it's a little bit of the past in case any of you have been tracking the company, we 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 a 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 EP and C value chain for our treatment solutions business. We continue to be very, very selective in what kind of projects we're picking up, and that's evident in a couple of deals 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, ultrapure 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.

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, a more positive answer for you, but it's a reality.

I'll let Vasant answer the question of the UP. ): Right,

sir. 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 200 crore, the bottom line is depleted by 18 crore.

Is still 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?

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.

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Okay.

On the UP one, Vasant will answer. Yeah.

Yes.

The UP unexecuted portion is around 11% of the order backlog as of June. Our order backlog was around 2,477 crores.

In terms of the exposure on the accounts receivable, we don't call out separately on the contract-specific details. 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.

Thank you all for participating in the 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.