Ion Exchange Shares Jump 11%: AUM Capital Gives Buy Call, Sets Rs 468 Target

Shares of Ion Exchange (India) Ltd jumped nearly 11% in Monday's trading session after brokerage AUM Capital initiated a 'Buy' recommendation on the water-treatment company and set a target price of Rs 468 for the next 9-12 months.

The stock climbed 10.76% to an intraday high of Rs 453.50, reflecting investor interest following the brokerage's positive assessment of the company's business diversification, order pipeline and expansion plans.

AUM Capital sees strong long-term prospects for Ion Exchange, supported by its water-treatment business, robust order book and diversified product portfolio.

Diversified business provides support

AUM Capital highlighted Ion Exchange's presence across three key business segments—engineering, chemicals and consumer products.

Engineering contributes around 61% of revenue, followed by chemicals at approximately 29% and consumer products at about 10%, according to the brokerage.

The company also serves customers across a broad range of industries, including solar, pharmaceuticals, petrochemicals and refineries, power, steel, sugar, electronics, pulp and paper, textiles, cement and automobiles.

This diversified customer and industry exposure, according to AUM Capital, helps reduce dependence on any single end-market.

MAPRIL acquisition expands overseas reach

The brokerage also highlighted Ion Exchange's acquisition of Portugal-based MAPRIL, completed in June 2023.

The acquisition has helped the company gain greater access to European markets and strengthen its international presence.

Ion Exchange entered FY27 with a sizeable project pipeline. Its order book stood at approximately Rs 2,473 crore at the end of Q1 FY27, AUM Capital said.

Roha facility could become a key growth driver

AUM Capital expects the company's Roha manufacturing facility to play an important role in its future expansion.

The plant is currently operating at around 25% of capacity and could take approximately four years to reach full utilisation, according to the brokerage.

Around Rs 275 crore has been invested in the core manufacturing plant, which has the potential to generate annual revenue of approximately Rs 500-550 crore once scaled up.

AUM Capital expects margins to remain in the 18%-24% range as the facility ramps up.

The brokerage also pointed to Ion Exchange's Water Quality Association (WQA) certification, saying the approval should support direct exports of its products to drinking-water treatment markets across North America, the UK and Europe.

Why AUM Capital is bullish

The brokerage believes Ion Exchange has several long-term growth drivers, including its established position in the water-treatment sector, a healthy order book and a diversified product portfolio.

The Roha facility could further strengthen the company's manufacturing capabilities by enabling domestic production of advanced ion-exchange resins, helping it address demand from both Indian and overseas customers.

Based on these factors, AUM Capital has assigned a 'Buy' rating to Ion Exchange and set a Rs 468 target price over the next 9-12 months.

From UK subsidiary to Indian water-treatment player

Ion Exchange traces its origins to 1964, when it was established as a subsidiary of the UK-based Permutit Company.

The business became an Indian company in 1985, after Permutit exited its stake.

Over the years, Ion Exchange has developed into a diversified water-treatment company serving multiple industrial and consumer markets, with its current expansion strategy focused on strengthening manufacturing capacity and increasing its international reach.