Ion Exchange is an Indian company that has been pioneering water treatment solutions for over 50 years. It offers a complete range of water, wastewater, and solid waste management services for industries and municipalities. The company has a large presence in India and is recognized internationally for its expertise in water and environmental management. Ion Exchange has a diverse portfolio of products, services, and process technologies to provide total water treatment solutions to its industrial, institutional, and community clients.

1. Company background
•A pioneered the Production of world class resins in India.
Commenced water treatment plant in India with a legacy spanning
over five decades.
•Ion Exchange is recognized internationally as a premier company in
water and environment management.
•IEIL offers complete range of solutions for water, waste water
management, solid waste management and waste to energy to
industries and municipal corporations.
•Ion exchange is among the largest environment solutions
providers, one of very few companies worldwide with a complete
range of technologies, products and services. It offers one stop
water and non-water treatment solutions. This enables them to
offer total solutions for every sector of society.
Sector Industrials
Industry
Scrip code 500214
No. of
share
146.66(lakh)
Investment
style
Core + Small
Face value 10
1 Year Avg.
trading
volume
4920
Source: company, morning star

2. Key milestone
• 1964 Incorporated as 60% subsidiary of Permutit Co., U.K.
• 1965 pioneered the production of world class resins in India and commenced water treatment plant
to India’s industrials sector at Ambernath.
• 1977 Listed on BSE.
• 1978 First company to launch RO concept in India.
• 1979 Expanded the manufacturing of Resins and convert into fully automated unit at Ankleshwar.
• 1982 Engineering and fabrication setup started at Hosur.
• 1983 Industrial Chemical Production started at Patancheru.
• 1986 Zero-B Launched with Suraksha tap attachment.
• 1987 Started manufacturing RO membranes at Halol.
• 1996 First sea water RO desalination plant in India at GEB, Sikka.
• 1998 Consumer products manufacturing started at Goa.
• 2010 Commissioned largest RO based water desalination plant.
• 2015 Contract for Water supply project worth USD 194 mn signed with Sri Lanka Water Board. 9
• 2017 Integrated and automated reverse osmosis membrane manufacturing process at Verna, Goa.
Source: Youtube, company

3. Business Model (P1)
Source: Company, Self
Industries
•Water Treatment
•Waste water
treatment
•Boiler and cooling
water chemical
treatment
programmes
•Comprehensive O&M
•24/7 service support
•Supply of
consumables like ion
exchange resins,
membranes, water
treatment chemicals,
antiscalants and
critical spares
•Water Consultancy
•BOT contracts
•EPC contracts
•Turnkey contracts
Institution
•Potable water
•Softened water for
laundry and toilet
•Boiler and cooling
water chemical
treatment
programmes
•Swimming pool water
filtration and
disinfection
•Comprehensive O&M
Communities and
municipalities
•Public water supply
and sanitation
Realty
•Drinking water
•Swimming pools
•Comfort cooling
•Recycle water from
Toilet washing, Car
washing and
Gardening

4. Application
Industrial
• Automotive
• Cement and
12 others
Institution
• Education
Institution
• Hospitality
• Hospitals
• Railway
• Defense
Communities &
Municipalities
• Urban
• Rural
Realty
• Residential
• Commercial
Source: Company, Self

5. Product, service, & process
ACF Activated carbon filter FDA Food and drug administration
AVGF Activated valve less gravity filter MCA Medicine control agency
DM Demineralization TGA Therapeutic goods administration
ETP Effluent treatment plant MB Mixed bed
MGF Multi grade filter RGF Rapid gravity filter
PT Pre-treatment plant CRM Cold rolling mill
RO Reverse osmosis DMF Dual media filter
SCAD Short cycle Automatic Demineralizer MBR Membrane bio reactor
SF Softener NF Nano filtration
STP Sewage treatment plant WTP Water treatment plant
UF Ultra-filtration
FLT Filtration
SSF Side stream filter
HRSCC High rate solid contract clarifier
SWRO Sea water reverse osmosis
EDI Electrodeionisation
TWM Total water management
CPU Condensed polishing unit
PCP Process condense plant
Source: Company, Self

6. Marquee Client
Industrial
• Bajaj, Honda
• Ambuja, ACC
• Aditya Birla Nuvo, Bayers
• LG, Samsung
• Kwality ice-cream
• GSFC
• Alkem
• ITC
• TATA group
• IRCTC
• NTPC
• BHEL
Institutions
• Taj hotels
• Leela hotels
• Oberoi
• DLF
• Apollo Hospital
• Military Engineering services
Internationals
• Cargill
• Technip France
• Unilever group
• Jurong
• Jacobs
• Kawasaki
• Mitsubishi
• PDO Oman
• Emirates steel
• IKPP Indonesia
Source: Company, Self

7. Business segment (P2)
Chemicals
35%
Consumer product
9%
Engineering
56%
Engineering and O&M
The Company designs, engineers, manufactures and sells medium
and large size equipment using extensive technologies having
project management capabilities in
• Water treatment
• Waste water treatment (SWRO, ZLD) to diverse industries.
• These are offered as standard and pre-engineered plants as well
as customized, design & build projects undertaken on turnkey,
BOOT or EPC basis.
Chemicals
•The company is engaged in manufacturing ion Exchange resins,
water treatment chemicals, and other specialty chemicals.
•Ion exchange resins are used for softening, demineralization in
water treatment. They are also used in various non-water
separation across diverse industries.
•Water treatment chemicals are used in boiler, cooling water
treatment, coagulation and flocculation, membrane cleaning etc.
•Specialty chemicals used in processing of paper, Sugar, Pharma
and Refinery segment.
Consumer products
Retail, Institution & rural.
Caters to individuals, hotels, spas, educational institutions,
hospitals, laboratories, railway and defense establishments
providing safe drinking water and a clean environment.
Source: company, Self

8. Water desalination industry overview
• In 2011, global water desalination market reached
whooping US$ 14.31 Billion.(techsciresearch)
• According to UN by 2025 around 14% of world
population will be dependent on desalinated
water which is currently only 1%.(Wikipedia)
• India desalinated plant was valued at $940mn in
2018 and is projected to grow at 8.9% to reach
$1400mn by 2024.(techsciresearch)
• India Water Desalination Market Set to Grow at
22% CAGR from 2017-22.(techsciresearch)
• In 2013 India has 182 desalination plants operating
in different parts of the country and it is
anticipated to be over 500 by 2017. India currently
has around 1000 functional plant.
• Rough indications are that there are more than
1000 membrane based desalination plants of
various capacities ranging from 20 m3/day to
10,000 m3/day.(InDA)
0
500
1000
1500
2013 2017 2019
Desalination Plant (India)
Source: Techsciresearch, Frost & Sullivan

9. Water Desalination industry overview
• Many factors enter into the capital and operating costs for desalination: capacity and type of plants,
plant location, feed water quality, labour cost, energy cost, financing cost, ease of concentrate disposal,
level of instrumentation / automation and plant reliability. The production cost of a brackish water
desalination plant to be Rs. 10 to 15 per m3. The production cost for a sea water desalination plant
varies between Rs. 40 to 50 per m3.(InDA)
• Indian desalination market is growing at a much faster pace than anticipated initially.
• Some of the drivers for growing desalination industry in India are enormous industrial, economic
growth, water scarcity and RU.
• Government support has driven the industry and expected to continue as India has 33% scarcity of fresh
water than currently available.
• In July 2010, the cost of per litre was 5 paise. In March 8, 2019 a report by Bloomberg said that cost per
litre was 3.5 paisa.
• The Gujarat government estimates the costs to be around Rs.387 crore for a 100 MLD (million litres a
day) membrane-based plant (and this is after capitalization of five years of working capital
requirement). Essel infraproject quoted 700 crores for plant.
• 100 MLD at Nemmeli cost around 533 crores, year2013
• 100 MLD at Minjur cost around 515 crores, year 2010
• And the price at which Tamil Nadu procures desalinated water is well over 10 paise a litre compared to
the cost of 3.5 to 5 paise a litre. A five paise difference translates into Rs.50 lakh a day for a 100 MLD
plant. That translates into Rs.182 crore each year for each 100 MLD plant. As the procurement prices
increase, the numbers grow uncomfortably larger too. When multiplied into the number of plants, the
sums could be scandalous
– Source: Moneycontrol

10. Waste water industry overview
• India Wastewater Treatment Plants Market to Grow at CAGR of over 12% during 2016-
2021.
• on account of increasing water pollution, rapid urbanization, implementation of
stringent regulations pertaining to proper treatment and disposal of sewage along with
restrictions on discharge of effluent wastewater into water bodies
• Strict directives issued by Central Pollution Control Board (CPCB) regarding proper
disposal and management sewage necessitate construction of new sewage treatment
plants in the country. Further, increasing penetration of municipal wastewater
treatment plants in residential and commercial sectors is projected to drive India
wastewater treatment plants market over the next five years.
• Implementation of Zero Liquid Discharge regulation by the government on sugar,
textile, oil & gas, pharmaceuticals, refineries and pulp & paper industries, among others
is further anticipated to stimulate growth in India wastewater treatment plants market
through 2021.
• In 2015, wastewater treatment plants with capacities between 50 MLD and 200 MLD
dominated India wastewater treatment plants market.
• the production cost of desalted water from effluent varies from Rs. 15 to 50 per m3
depending upon the TDS load in the effluent stream.
Source: Techsciresearch

11. Michael porter’s 5 forces
• Barrier to new entrant is relatively high because it is
Capital intensive. 100MLD plant Rs.500 croresThreat of new entrant
•Very few potential substitute in form of soft drinks and beer.
Therefore high Switching cost. Thus enhancing inherent
industry profitability.
Threat of substitute
• ???
Intra industry rivalry
• Provide full range of services. With very few players
are providing such services giving an edge.
Bargaining power of
supplier
• ???Bargaining power of
buyer
Source: Self

12. SWOT Analysis
Helpful in achieving
objective
Harmful in achieving
objective
Internal origin STRENGTHS
• BOT, EPC, Turnkey contracts
• Compliance construction
• Cheap
WEAKNESS
• Corruption
External origin OPPORTUNITIES
• Market boom
• Water scarcity
• Govt. Support
• Rapid urbanization
• Stringent regulation
• Nal se jal scheme expect
to attract 6.3lakh crore In
next 5 years.
THREATS
• Environmental loss
• May attract competition
Source: Self

13. PEST Analysis
Political
• Global
Influence
• Potential
changes to
legislation
• Stability to
government
Economical
• Economic
growth
• Employment
rates
• Inflation
rates
• Monetary
policy
• Fiscal policy
• Consumer
confidence
Sociological
• Income
Distribution
• Demographic
influence
• Lifestyle
factors
Technological
• International
influence
• Changes in IT
• Take up rates
Source: lucidchart

14. Engineering Segment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
FY15 FY16 FY17 FY18 FY19
Revenue (In Lacs)
0
1000
2000
3000
4000
5000
6000
FY15 FY16 FY17 FY18 FY19
Source: Self

15. Chemical
0
10000
20000
30000
40000
50000
FY15 FY16 FY17 FY18 FY19
0
1000
2000
3000
4000
5000
6000
FY15 FY16 FY17 FY18 FY19
Source: Self

16. Consumer Product
0
2000
4000
6000
8000
10000
12000
FY15 FY16 FY17 FY18 FY19 -400
-350
-300
-250
-200
-150
-100
-50
0
FY15 FY16 FY17 FY18 FY19
Source: Self

17. Consolidated business
0
50000
100000
150000
FY15 FY16 FY17 FY18 FY19
Revenue (In Lacs)
0
5000
10000
15000
FY15 FY16 FY17 FY18 FY19
0
2000
4000
6000
8000
FY15 FY16 FY17 FY18 FY19
Source: Self
0
5000
10000
15000
FY15 FY16 FY17 FY18 FY19
EBIT(In Lacs)

18. Solvency ratio
0.12 0.13 0.15 0.16
0.10
y = -0.001x + 0.136
0
0.1
0.2
FY15 FY16 FY17 FY18 FY19
Long term debt to Equity
For every 1Re equity its long term
debt is fairly in range of 0.1 to 0.15
0.47 0.45 0.44
0.72
0.35
y = 0.004x + 0.475
0
0.5
1
FY15 FY16 FY17 FY18 FY19
Debt to Equity
For every 1Re equity its total debt
is in range of 0.35 to 0.47
0.32 0.31 0.31
0.42
0.26
y = -0.000x + 0.325
0
0.2
0.4
0.6
FY15 FY16 FY17 FY18 FY19
Debt to capital
Source: Self

19. Key Risks
The global economy is facing a confluence of risks such as
escalation of trade disputes, an abrupt tightening of global
financial conditions, and intensifying climate risks, which
could severely disrupt economic activity and damage longer-
term development prospects.
Assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment
Source: Company

20. Peer’s group
• Va tech wabag
• Thermax India
• Hindustan Dorr- Oliver ltd
• GE
• IDE Technologies India Pvt. Ltd.
• Doshian Veolia water solution Pvt. Ltd.
• Aqua Innovation solution
• SFC Environmental technologies
• Toshiba
• Voltas
• Siemens
• Paramount
• Triveni Engineering & industries
• Degremont
• Aquatech
• BDR energy system
• Aquatech Systems Asia Pvt. Ltd.
• Suez Water Technologies & Solutions
• Hitachi Plant Technologies India Pvt. Ltd.

21. Methods of SWRO
Methods of desalinating water
RO: Reverse osmosis+
MSF: Multi stage flash distillation*
MED: Multiple effect distillation*
ED: Electrodialysis +
Hybrid:
EDI:
Others:
Source: Desaldata

22. Terminology• Water Treatment:- Water treatment is any process that improves the quality of water to make it more acceptable for a
specific end-use. The end use may be drinking, industrial water supply, irrigation, river flow maintenance, water
recreation or many other uses
• Waste/ sewage water treatment:- Wastewater treatment is a process used to remove contaminants
from wastewater or sewage and convert it into an effluent that can be returned to the water cycle with minimum
impact on the environment, or directly reused.
• Non water specialty application:-
• Pharmaceuticals Grade specialty resins:-
• What Is a Build-Operate-Transfer (BOT) Contract? A build-operate-transfer (BOT) contract is a model used to finance
large projects, typically infrastructure projects developed through public-private partnership. The BOT scheme refers to
the initial concession by a public entity such as a local government to a private firm to both build and operate the
project in question. After a set time frame, typically two or three decades, control over the project is returned to the
public entity.
• Engineering, Procurement and Construction (EPC) is a particular form of contracting arrangement used in some
industries where the EPC contractor is made responsible for all the activities from design, procurement, construction,
commissioning and handover of the project to the end-user or owner.
• Demineralized Water also known as Deionized Water. Demineralization is the process of removing mineral salts from
Water by using the ion exchange process.
Demineralised Water is Water completely free ( or almost ) of dissolved minerals as a result of one of the following
processes : Distillation, Deionization, Membrane filtration (reverse osmosis or nanofiltration), Electrodyalisis, Or other
technologies.
• MMTPA stands for Million Metric Tonne Per Annum.
Source: Wikipedia, Investopedia, Envicaresystems