ION EXCHANGE legacy projects drive Rs 121.5 crore EBIT loss

ION EXCHANGE reported a Rs 121.5 crore consolidated Treatment Solutions earnings before interest and tax, or EBIT, loss in the second quarter of fiscal year 2027 (Q2-FY27), after revising estimated completion costs for certain legacy projects. The segment loss coincided with a Rs 82.8 crore consolidated net loss, despite revenue growth in Industrial Products, Specialty Chemicals and Consumer Products.

Why did ION EXCHANGE's Treatment Solutions loss rise in Q2-FY27?

ION EXCHANGE says revised estimated costs to complete a few legacy Treatment Solutions projects significantly affected its Q2-FY27 financials. Consolidated Treatment Solutions revenue fell to Rs 149.8 crore from Rs 295.8 crore in Q2-FY26, while EBIT widened to a Rs 121.5 crore loss from a Rs 12.2 crore loss. The year-on-year EBIT deterioration was Rs 109.3 crore.

The standalone figures show a similar movement. Treatment Solutions revenue declined to Rs 143 crore in Q2-FY27 from Rs 290.1 crore a year earlier, and EBIT changed from a Rs 7.2 crore profit to a Rs 113.9 crore loss. Management also said turnover was affected because certain high-value contracts are scheduled for execution in the second half of FY27 (H2-FY27).

Management said dispatches to Gulf Cooperation Council (GCC) markets were delayed by the ongoing Middle East crisis. This timing issue was separate from the estimated completion-cost changes on legacy projects, which the company specifically identified as having significantly affected Q2-FY27 financials.

How did Treatment Solutions affect ION EXCHANGE's first-half results?

ION EXCHANGE recorded a Rs 138.9 crore consolidated Treatment Solutions EBIT loss in the first half of FY27 (H1-FY27), compared with a Rs 4.6 crore profit in H1-FY26. Segment revenue fell by Rs 120 crore to Rs 359.7 crore from Rs 479.7 crore over the same periods.

At the group level, H1-FY27 consolidated operating income increased 4.4% year on year to Rs 1,375.2 crore, but operating earnings before interest, tax, depreciation and amortisation, or EBITDA, changed from a Rs 131 crore profit to a Rs 53 crore loss. Expenses rose 20.4% to Rs 1,428.2 crore, compared with operating income of Rs 1,375.2 crore.

Consolidated profit after tax changed from a Rs 98.4 crore profit in H1-FY26 to a Rs 79.7 crore loss in H1-FY27. In Q2-FY27 alone, consolidated operating income fell 8.1% to Rs 674.7 crore, operating EBITDA changed from a Rs 68.5 crore profit to a Rs 84.8 crore loss, and the EBITDA margin moved to negative 12.57% from positive 9.33%.

Which ION EXCHANGE businesses grew despite the Treatment Solutions setback?

Industrial Products was the only reported operating segment to increase both consolidated revenue and EBIT year on year in Q2-FY27. Revenue rose to Rs 136 crore from Rs 100.9 crore, while EBIT increased to Rs 8.6 crore from Rs 7.4 crore. Management described the revenue increase as approximately 35% year on year.

Specialty Chemicals increased consolidated Q2-FY27 revenue to Rs 254.6 crore from Rs 218.1 crore, but EBIT declined to Rs 22.5 crore from Rs 62.9 crore. Management attributed the lower profit contribution to input-cost inflation arising from the West Asia crisis and costs associated with the Roha facility.

Consumer Products revenue rose to Rs 100.5 crore in Q2-FY27 from Rs 77.1 crore in Q2-FY26, while its EBIT loss widened to Rs 4.1 crore from Rs 2.3 crore. H1-FY27 revenue increased to Rs 212.9 crore from Rs 161.3 crore, and the EBIT loss widened to Rs 4.5 crore from Rs 2.7 crore as the company continued investments intended to scale the business.

Did Lifecycle Services offset losses elsewhere in Q2-FY27?

Lifecycle Services did not offset the Treatment Solutions loss in Q2-FY27. Consolidated Lifecycle Services revenue declined to Rs 70.6 crore from Rs 77 crore, while EBIT fell to Rs 5.9 crore from Rs 23.1 crore. Management said the business recorded sequential growth during the quarter while maintaining stable margins.

On a first-half basis, consolidated Lifecycle Services revenue increased to Rs 142.2 crore in H1-FY27 from Rs 132.9 crore in H1-FY26. EBIT, however, fell to Rs 13 crore from Rs 28.9 crore. The presentation provides year-on-year figures for the quarter and first half, while management's sequential-growth statement refers to the comparison with the preceding quarter.

Industrial Products, Specialty Chemicals and Lifecycle Services together generated Rs 37 crore of consolidated EBIT in Q2-FY27. That combined amount was below the Rs 121.5 crore Treatment Solutions EBIT loss, while Consumer Products reported a further Rs 4.1 crore loss.

What is ION EXCHANGE expecting in H2-FY27?

ION EXCHANGE expects Treatment Solutions turnover and margin profile to improve in H2-FY27, supported by its order backlog and planned execution schedules. As of 30 September 2026, the order book for Treatment Solutions, Industrial Products and Lifecycle Services was about Rs 2,969 crore, and the disclosed bid pipeline was about Rs 9,370 crore.

Management expects healthy order inflows to sustain Industrial Products growth in coming quarters. It also said offtake from the new Roha resin manufacturing facility is gradually improving and is expected to contribute increasingly to Specialty Chemicals growth.

Management said improved cost pass-through to customers is expected to support Specialty Chemicals margin recovery in coming months. It also said Advanced Digital solutions are receiving an encouraging response, but the presentation does not quantify their expected revenue, earnings contribution or timing.

Conclusion

ION EXCHANGE's Q2-FY27 performance was principally affected by revised completion-cost estimates for certain legacy Treatment Solutions projects, which resulted in a Rs 121.5 crore consolidated EBIT loss. Industrial Products added Rs 35.1 crore of revenue and Rs 1.2 crore of EBIT year on year, while Specialty Chemicals and Consumer Products increased revenue, but these gains did not absorb the Treatment Solutions loss.

The next reported indicators are execution of high-value Treatment Solutions contracts scheduled for H2-FY27, the status of delayed GCC dispatches and the company's expected improvement in Treatment Solutions turnover and margins. Management's disclosed order book of about Rs 2,969 crore, Industrial Products order inflows, Roha facility offtake and Specialty Chemicals cost pass-through will also be relevant to subsequent results.