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Target: ₹3,770
CMP: ₹3,504
Ion Exchange (IEIL) specialises in water and environment management with over five decades of experience. There is huge potential in water and wastewater treatment as the demand for water is likely to outstrip the supply causing water scarcity in many areas of the globe including India.
IEIL’s has witnessed steady order book both in domestic and international markets with order book of ₹3,650 crore (visibility of about 2-3 years) and bid pipeline of over ₹8,400 crore. The environment clearance for its resin facility expansion is expected to be received in Q4 and the company expects consumer products division to break even at EBIT level in FY23.
Focus of the Government on optimum utilisation of water due to the declining ground water levels could provide a strong boost to the water treatment chemicals business. Expansion of membrane and chemical capacity indicates strong demand for its products and would drive its revenues in the coming years.
The expansion of the membrane facility and greenfield expansion of chemicals capacity (environment clearance awaited) are likely to be strong growth drivers for IEIL especially when the demand drivers for its products/services remain robust.
We expect IEIL’s Revenue/EBITDA/PAT to grow at 17/14/15 per cent CAGR over FY22-FY25, led by increased execution of orders.
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