ION EXCHANGE (INDIA) LTD (NSE: IONEXCHANG) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Vasant Naik — Chief Financial Officer
Aankur Patni — Vice Chairman
Analysts:
Unidentified Participant
Nupur Jainkunia — Analyst
Sabil Dabhoya — Analyst
Chetan Vora — Analyst
Deepak — Analyst
Nirmam Mehta — Analyst
Ruchit Agrawal — Analyst
Mihir Vyas — Analyst
Saket Kapoor — Analyst
Tarun Agarwal — Analyst
Omkar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the ion Exchange India Limited Q1FY26 earnings conference call hosted by Vellaram Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this call is being recorded with this. I now hand the conference over to to Ms. Nupur Jain Kunya from Valerim Advisors. Thank you. And over to you ma’.
Am.
Nupur Jainkunia — Analyst
Thank you. Good afternoon everyone and a very warm welcome to you all. My name is Nupur Dhain Kuneya from Valeram Advisors. We represent the investor relations of Iron Exchange India Limited. On behalf of the company and Valeram Advisors, I would like to thank you all for participating in the company’s earnings conference call call for the first quarter of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings 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 beliefs as well as assumptions made by information currently available to management. Audiences are cautioned not to place any undue reliance on these forward looking statement in making any investment decision. The purpose of today’s 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 earnings call and hand it over to them for their opening remarks. We have with us Mr. Ankur Patni, Vice Chairman, Mr. Indradil Dutt, Managing Director and CEO, Mr.
Vasanth Naik Group Chief Financial Officer and Ms. Nikisha Solanki, Company Secretary. Without any further delay, I request Mr. Vasanth Naik to start with his opening remarks. Thank you. And over to you sir.
Vasant Naik — Chief Financial Officer
Thank you, Nupur. Good afternoon everybody. It is a pleasure to welcome you all to the earnings conference call for the first quarter of the financial year 2026. For the first quarter under review on a consolidated basis the company reported an operating income of INR 5832 million an increase of around 3%. Year on year the EBITDA stood at INR 627 million a decline of 2%. Year on year, EBITDA margin stood at 10.75% and the net profit was INR 484 million, an increase of 8% year on year while the PAT margin was around 8.3%. During the quarter, the company migrated to the SAP environment which led to certain transition related challenges that partially impacted the business volumes.
However, the operations have now largely stabilized. Now let me take you through the quarterly segmental performance on a consolidated basis. In the engineering division, the revenue for the quarter was INR 3180 million, reduction of 2% year on year. The EBIT for this segment was INR 278 million, an increase of 48% year on year. The inquiry pipeline remained steady for the engineering division during the quarter. However, delays in the finalization of certain large value opportunities impacted both order inflow and backlog. The execution of the UP Jalnigam order remained muted. On a positive note, we received payment from the Sri Lankan authorities against approved bills which will facilitate the expeditious closure of the contract.
At the end of Q1FY26, the total order book stood at INR266.40 million while the bid book pipeline was more than INR 92,000 million. Moving to the chemical division, the revenue for the quarter was INR 1889 million, a reduction by almost 5% year on year. The EBIT was INR 467 million, a decrease of 6% year on year basis. The segment has maintained a margin profile. The company is on track to commission the greenfield manufacturing plant at Roha for manufacturing of Brazils. In the current quarter, that is Q2 for the consumer product division, the revenue for the quarter stood at INR 902 million, an increase of almost 36% year on year.
The loss for the quarter was INR 9 million compared to a loss of INR 34 million in the same period of the previous year. The segment continues to witness consistent turnover growth supported by deeper market penetration and increased acceptance of our product portfolio. With that, we can now open the floor to the question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, please note. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question comes from the line of Sabil from Unifi Capital. Please go ahead.
Sabil Dabhoya
Hi, thanks for the opportunity. We have taken about two provision of doubtful debts in FY24 we got payments from Sri Lankan projects. You know, that is good news for us. We wanted to understand what’s our policy to recognize any law for or you know, any account receivable issue that we may face on the UP project or on the Honor project, which, which are we executing. Basically want to understand what’s a policy to recognize loss or impairment for the projects we face. Issues in.
Vasant Naik
The provisioning is actually based on party to party level assessment of the outstandings and situation on the ground. So depending on how the project is progressing, how the payments are coming, the company has a provisioning policy for each of the contract which are under execution. In addition to that we also have an expected credit loss policy which details of which are given in the annual report, which is basically we are recognizing certain losses based on the overall aging of the accounts receivable in the books. So combination of both these parameters, we are assessing the credit losses and accordingly provisions are taken in the books.
Sabil Dabhoya
So we are confident with that. We don’t feel any sort of stress that happened in FY25 and FY26 on this issue, right?
Vasant Naik
Yeah. I mean at the March end during the annual closing of accounts, the detailed scrutiny is done by the stat auditor. Also apart from the periodic revisions in the provisions, what we do throughout the year. So we are confident as of date the provisioning is adequate to cover any possible credit losses which we, which we may have.
Sabil Dabhoya
Okay, thank you. Next question was on the ROHA expansion. So this was largely the cater to export markets. Can you please call out what which geographies are we targeting and if we will be facing any tariff impact?
Aankur Patni
Yeah, thanks for the question. So we currently also do business across most of the geographies in the world. We have been present in America’s market. We are present in Europe, Asia Pacific and we also are increasing our presence in the Middle east market. So all of these geographies are catered to by the division of the company. And this will are the markets that we will continue to expand and grow. With the ROHA coming on stream.
Sabil Dabhoya
Are we any particular increase to the user geography?
Aankur Patni
Yes, that’s again one of the bigger markets. And we like in Europe, Middle East APEC will also continue to expand our presence and coverage in the US market.
Sabil Dabhoya
And we will be, let’s say from effective today, the 25% tariffs will be effective if we make any sales over there.
Aankur Patni
So we are studying the tariff regulations. In the last, you know, last revision that was circulated which was in effect till now, there was no impact on the product that we were selling. So we are taking a look at the new tariffs that have been announced and based on the, based on the situation then we will appropriately respond. So far till the last policy there were no impact on our products selling into the US market.
Sabil Dabhoya
Okay, the next one on the engineering segment.
operator
May I request to join the queue for follow up question please?
Sabil Dabhoya
Okay,
operator
thank you. The next question comes from the line of Chetan Kirki Vora from Abacus Asset Manager. Please go ahead.
Chetan Vora
That’s a good afternoon sir. Wanted to understand what was the impact on this here because of these transitioning of towards sep.
Aankur Patni
So Chetanji, good afternoon. So we had some impact because of transition to the new SAP platform. The biggest impact was in the month of April for our chemicals business because it is largely consumable driven. We’ve had some impact or some revenue loss which we could not recover. For an engineering business it is more of a timing issue. So some of those have got extended out to the following quarter which is the current quarter. So which we hope to recover in the next 2, 3 months of this quarter and the first month of the next quarter.
Chetan Vora
Would it be possible to you to quantify on the same?
Aankur Patni
So we don’t give specific numbers but I would say that you know this is contained within a single digit impact. Percentage impact.
Chetan Vora
Single digit percentage impact,
Aankur Patni
yeah.
Chetan Vora
Okay. And existing for that. How do we see the. For the full year for the engineering division in terms of the growth?
Aankur Patni
As we mentioned in the last call, our policy is to give an outlook for the year at the end of the second quarter. The second quarter. We will come back and give you an update. As of now there is no major difference in the outlook compared to what we saw when we had the last quarter call of the last financial year.
Chetan Vora
And the legacy projects will be getting more by quarter two. Yeah, that’s what we had mentioned last quarter.
Aankur Patni
No, last quarter we did not mention that. We had said that we are going through the execution of the, of the, you know the, the projects where we’ve had execution challenges. We continue to make progress through them. But it will take us till the end of the year for us to close the project as of what we see right now.
Chetan Vora
Okay. On the chemical also whether the sales were affected because of this set thing because the revenue growth was.
Aankur Patni
Yeah, yeah. We actually lost almost entire April month because of the SAP implementation and actually that segment has been more impacted because that’s consume consumption based as you understand. So we could not get back the significant part of the April revenue which we lost.
Chetan Vora
So the revenue Lost is lost for. The chemicals expense
Aankur Patni
for that particular, you. Know, few, few weeks, you know, but, but I think we are now on the recovery part. I think the chemical, you know, business, you know, the platform has stabilized and we expect us to be back on usual terms of business for this second.
Chetan Vora
Quarter by when this new fluid of plant will be getting commissioned.
Aankur Patni
Sorry, could you repeat? Okay, so the Roha plant will get commissioned in this quarter. We are making up.
Chetan Vora
Maybe August is not expected by September India.
Aankur Patni
So our endeavor is to get it up and running as soon as possible. We are actually even more eager to get this plant off. We’ve made good progress. We are in the process of commissioning. But there’s also stabilization and getting the right quality, quality products out. So we are hopeful that we should be able to give you good news by the time we come back for the next quarter update.
Chetan Vora
Right. And lastly sir, what is this other income of this 19 crores.
Vasant Naik
Other income? It comprises of the interest income on a temporary cash surpluses which we are parking in airdeers. And also there’s an element of exchange gain on account of our receivables.
Chetan Vora
Okay, okay, fine. Yeah, that’s it for my. Thank you.
operator
Thank you. The next question comes from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Deepak
Yeah, thank you for the opportunity. Am I audible?
operator
Yes sir, you’re audible. Please go ahead.
Deepak
So first question is regarding this tariff things which is panning out now. India at 25% and European region at 15%. And as you know that some of the plants of Ecolab and Lancis which are our competitors in this chemical space, they have factories in Europe as well which places them at a relatively better position versus us. So do we see that there could be some volume lifting problem for us say in the US market as Europe is now relatively better positioned in terms of let’s say exports because of lower tariffs. How are you looking at the situation?
Aankur Patni
Thank you for the question. You know, from our perspective it’s a vast market and we continue to expand our presence and our coverage. You know, there are, you know, various players supplying to the US market from all across the world, including US itself. So as I said in the discussion earlier question that we are still studying the impact of the tariff increase. As I said in the last, the previous tariffs said that was there, there was no impact on our product line. We are still studying the same. But we feel that we should be able to continue to hold on and continue our business with our set of customers that we cater to.
And we Also are confident that we will gain share in some specific areas. So overall we don’t see this yet to be a cause of concern that we would like to highlight.
Deepak
What kind of capacity utilization are we targeting for the new roha plant in FY26?
Aankur Patni
So this plant is a very large plant and supposed to increase in phases as of now. Our plan is to go up to full capacity over a period of the next three years. So we plan to, you know, so whatever our plans are for the next balance, eight months, seven to eight months of this financial year, we feel confident that we will be able to utilize that capacity.
Deepak
Okay. And second is on this engineering front, so you have mentioned in your PPT that there have been some details in large order value. Right. So I just wanted to understand what is the quantum of the order backlog difference are we talking about?
Aankur Patni
So as you see from the data that we have submitted, we have not had any significant order wins to report to the substantive order wins to report to the market. We continue to pursue selectively opportunities in the market both in India and abroad. As we had mentioned in our last few updates, we continue to remain extremely selective. In the last quarter there were one or two projects we had targeted which we had lost. We don’t have any losses to report for this last concluded quarter. However, timing wise, the conclusion and the results of those projects we are pursuing have been delayed.
So that is the reason we don’t have any significant wins to report. However, we continue to pursue all the opportunities that we are selectively pursuing.
Deepak
But sir, is the situation in terms of let’s say new order intake, is it as of now relatively looking better than what we saw in Q1.
Aankur Patni
Ultimately it is all linked to what comes and what you end up winning. As I said, we have not had any significant decisions being made. They have been deferred. So we continue to pursue and we continue to remain hopeful that we should be able to share some good news in the days to come.
Deepak
Okay. And sir, just to continue to that. So this quarter we have reported an EBIT margin in the engineering segment of 8.7% which is almost like four to five quarter high. So just wanted to understand what led to such significant improvement in our EBIT margin in engineering segment and how sustainable is it, let’s say in the next nine months of FY26?
Vasant Naik
Yeah, the current quanta, what we just referred to, the EBIT margin, it has benefited from a one time extra cost rebate which we got from one of the large EPC contract which is presently under Equal execution. So considering that the current year revenue is lower than the previous year and if we exclude the above impact, the margins would have been definitely lower as compared to what we would what we have disclosed in the previous year. Because my infrastructure cost are at a much elevated level and they are designed to meet much higher volumes. Also the legacy project which largely depressed the margin last year, in the current quarter there was insignificant invoicing.
Deepak
Okay, so sir, adjusting for that one time benefit and also this legacy contract, what could have been our margin then?
Vasant Naik
Without going into the specific of the exact margins, what we can say is that it would have been lower than the last year full year engineering segment margin, what we disclosed of around 6.9%.
Deepak
Okay, sir. And sir, one last question on consumer. So this quarter we have seen a strong comeback and we have reported almost 37% YoY growth rate in the consumer product. Just want to understand that. Is this because of some order different in the institutional order from Q4 to Q1 within the Consumer or is it something else?
Aankur Patni
No, this is not due to any special causes. This is a very large segment where we have been continuously trying to increase our presence and coverage and business and we have been strengthening across the board the company in terms of our coverage and customer engagement across all the segments, including the consumer product segment. This being a more shorter cycle nature of business, we are seeing some of those results trickle in. But still we are just scratching the tip of the opportunity potential here. There is a lot, lot, lot more that I think needs to get done.
So this is not to answer your question in one line, not attributed to any special causes, but the result of our increased market coverage.
Deepak
Okay, so then to understand this.
operator
Sure. Sorry to interrupt. May I request you to join the queue for a follow up question?
Aankur Patni
Sure.
operator
Thank you. The next question comes from the line of Nirman from Unique pms. Please go ahead.
Nirmam Mehta
Yeah, hi sir. Good afternoon. So my question is on the chemical segment. So one clarification first. So the degrowth that we saw this crop quarter was largely due to the SAP implementation and not because we were seeing any margin challenges and we wanted to protect our margins. Right?
Aankur Patni
That is the correct assumption.
Nirmam Mehta
Okay. And so secondly, so we have a lot of capacity in our existing plant as well and we’ll also be commissioning the ROHA plant. So you know, could you just give your plans for the new plant as well as the chemical division in whole, how do ramp up or how do you go forward?
Aankur Patni
So I think the capacity comment you made about a lot of existing capacity in our current plants Possibly is not a true representation. And that is predominantly the reason that the company decided to go for the ROHA plant for a resin chemical subsegment. The other sub segments also the plants are operating at recently higher levels of capacity. So we feel confident that we will be able to use up the progressive increased capacity available due to the commissioning of the ROHA plant.
Nirmam Mehta
So what would be the existing plants utilization then.
Vasant Naik
Current year? Since the volumes are a bit subdued because of the SAP related challenges. The capacity was in the region of around 65%.
Nirmam Mehta
And we feel that this. Could go up to 80. 85%.
Aankur Patni
Yeah, this will go up. I mean some of our plants have, you know, have. I think there’s significant headroom for us to go. Whether it is 80, 85 or whatever percentage that you would not like to comment. But we have headroom to grow which is what, you know, got impacted because of our inability to service due to the SAP transition. Effective July onwards is back to business as usual across all our plants in the chemical segment.
Nirmam Mehta
Okay sir, and sir, one last question. On the engineering side you mentioned that this quarter the margin was due to one time. So we. So the legacy project and the UP slowdown will continue for this year, right? It will only say go away from the next year onwards.
Vasant Naik
That’s right. The UP is. The UP project will continue for some time of the next year. Also while we are hoping that the legacy project as of now we are expecting to substantially close by end of this financial year.
Nirmam Mehta
Okay Satya, thank you.
operator
Thank you. The next question comes from the line of Heman Bazaria from Equicorp. Please go ahead.
Unidentified Participant
Opportunity sir, I hope I’m audible.
operator
Yes, I audible. Please go ahead.
Unidentified Participant
I had some questions around the Sunrise industries. So do we have. Have you developed the in house tech for the semiconductor, solar and the data center vertical? And is this an extension of the intern Swift 5G Extec that we had developed for the pharma and the biotech world in terms of controlling the particulate particles in water.
Aankur Patni
Thank you for the question. So we have continued as a company to actively engage in the market potential for the segments that you mentioned. Across all these segments the company has been successful in getting business over the past many years. We continue to pursue opportunities in pharma in solar and in specific semiconductor. You know semiconductor pursuits that come up. This is almost now become a part of our regular business especially the solar and the pharma segment pursuits.
Unidentified Participant
Just for further clarification, did we. So there are a few companies in India which have gone for The India to vapor part. So have we bid for the projects and have we converted them into orders or are we still in the process?
Aankur Patni
So we have executed a lot of projects in ultra pure water. In the solar segment we continue to pursue opportunities across the solar and the renewable energy spectrum. Again, we are selective in our bids and we also, as we mentioned in the last investor call, we would want to be selective and pick up projects where we believe we can have a profitable execution accretive to the engineering profitability in the segment. So we continue to pursue opportunities across the solar, semiconductor and pharma segments.
Unidentified Participant
So is it fair to assume, I mean based on market data, for every gigawatt it requires about 1 MLD of ultra pure high water plant. And what would be if so what would be the size of these contracts? I mean for ML, if we go for 4 million liters per day. It’S.
Aankur Patni
Difficult to give such a number. It varies, you know, the semiconductor projects are at a particular, you know, level depending on the nature of those plants. There also there is variation. So the solar module manufacturing plants also vary based on capacity. And we have done projects across the size spectrum for large domestic and international solar players also. So difficult to give you a number. But our team continues to engage in a very, very focused fashion on these segments and very selectively we pursuing opportunities that we want to close in our favor.
Unidentified Participant
And lastly on the engineering part, so if we remove the legacy order, that is the UP Jalnigam and the Sri Lanka part. So do we have any percentage of the order book which has got low or extremely low margins or is it fair to see the existing order book is in line with the EPC margins, the standard EPC margins that we bid for.
Aankur Patni
So as we said, my colleague said that that one adverse order that we had called out so that was going.
Unidentified Participant
To get over in the Q2 of this year, right? The industry related order.
Aankur Patni
We just responded that and clarified that this order will, you know, will be executed all through the end of this financial year apart from this particular order. The other orders that we continue to execute are in the average ballpark of our engineering segment business numbers as we currently move forward. So we don’t see any other concerns, major concerns to highlight in any of the other order that we have in the order backlog.
Unidentified Participant
Just a further clarification in case there is any adversity on the UP Janigam order, does the contract allow for cost? I mean cost escalations. Passing on the cost escalations.
Aankur Patni
So the UP journalism contract, you know, because they have been moving slow. We would already taken, you know, some of those out of our backlog. And that is where there was a dip in the order backlog that we carried which we reported in the last investor call. Beyond this, we don’t anticipate any other adverse impact on these orders for which the fund availability has been slower than in the past few years.
Unidentified Participant
Okay, thanks a lot for the opportunity, sir. I’ll get back and continue.
operator
Thank you. The next question comes from the line of Richit Agrawal from Unifi Mutual Fund. Please go ahead.
Ruchit Agrawal
Hi. Yes, thank you for the opportunity. A question on the UP project. We had called out last quarter that the ONM portion will be executed over the next 10 years. Could you please help bifurcate how much of the 366 crore outstanding would constitute of the ONM portion?
Vasant Naik
The order backlog, which is presently disclosed as part of the UPV project does not include the OLM portion. It is purely the EPC part.
Ruchit Agrawal
Okay, and could you help quantify that number?
Vasant Naik
It will not be possible to quantify because the individual, as you know, it is a conglomeration of smaller individual contracts. And it really depends on how much value of the contract gets finally commissioned and is based as a percentage of that. So maybe going, I mean maybe end of the current financial year, as the project moves towards the completion phase, we will be in a better position to disclose the O and M aspect.
Ruchit Agrawal
Sure, sir. And in the previous call, as the proportion of the UP project and the onerous project as a percentage of our backlog is going down, do we expect the margin trajectory to be better this year and directionally inching back towards the 9 to 11% mark going forward? And can we say that Q1 26 was the starting for that?
Aankur Patni
No, we cannot say that. We already clarified that Q1 26 performance was driven by a special cost. My colleague also clarified that if it was not for that particular project, then we would have closed at a rate which would be lower than the closing rate of the last financial year for that particular segment. We have also mentioned that UP continues to be slow in execution because of fund availability. And we’ve also mentioned that the onerous project that you referred to will continue its execution through the end of this financial year. Hence, we don’t expect any significant improvement in the overall profitability of this segment for this year.
Ruchit Agrawal
Sure. Sandra, on the products segment, the margin that we saw this quarter of -1%. Do we foresee margins in this segment higher compared to last year, potentially making lower losses as compared to last year as we’re we’ve envisaged the breakeven of 500 crore and we’ve achieved a scale of 300 crore plus currently.
Aankur Patni
Yeah. So as you see the performance that we called out for the consumer products segment, I think there’s been an improvement in both the top line as we increase our market coverage and this has also helped us or reduce the losses that we had in that particular segment because we keep on investing in that segment to get market coverage and growth. So overall I would say that segment has performed better and we continue to believe that there is further headroom in that segment to do more. So the teams are continuing to engage in this segment to continue to further improve the performance of over a gradual period of time for this particular year we’ll try to hold on to these performance levels.
But over the longer term we expect that the performance of this segment will improve.
Ruchit Agrawal
While we wish to take margin accretive orders from year on, how do we feel about the order inflow spanning in the next couple of quarters?
Aankur Patni
As I said to a few queries back, we continue to pursue opportunities. There have been timing issues. We announced in the last investor call that there were a couple of orders that went against us, decisions went against us this quarter. We don’t have any adverse losses to report. It’s just a timing issue where some of these pursuits being higher value ones do take time to close. So we continue to pursue those opportunities and be selective and pick up orders which will allow us to be accretive to the current profitability in that segment.
Ruchit Agrawal
Sure sir, that helps. Thank you and wish you all the best.
operator
Thank you. The next follow up question comes from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Deepak
Thanks for the follow up sir. Just to come back on that consumer product division, I’m still not clear that what led to that 37% YoY growth. You said it’s market reach and building infrastructure. Could you just elaborate means is it that in the B2C segment did we introduce new product which is seeing traction? So where is the traction coming from? Is it which region, what product is it? That institution segment is also doing well. Could you just break down the growth profile of this 36% in Q1 and how likely is it that this 90 crore run rate will continue for the next nine months as well?
Aankur Patni
So I think with due respect Deepav Ji, a lot of this possibly we’ll consider as business confidential in terms of we are in a very very competitive space as you would appreciate and Agree. Our teams are out there in the market helped by launch of newer products. We play across the water spectrum, be IT in residential, B2C in commercial as well as an institution. In the rural segment, we have been introducing our water purification technologies. Across the B2C spectrum, we have launched products, health products like alkaline water, hydrogen water. We continue to expand our presence in neighboring geographies like Nepal.
So all of these are actions that the teams are taking on the ground, improving their overall business health while growing in the face of strong competition. So and we believe, we feel good about the path that they are on. We feel that they’ll be able to hold on to this performance for this year. And over the longer term we continue to invest in this segment of the business and we believe that the longer term prospects are even better.
Deepak
Okay. Okay, thank you for the answer, sir. And one question was on engineering. So you must have seen a lot of Indian Companies are doing JVs and other projects in Middle east, right where lot of this desalination plants also come into the picture because of this pipeline projects. So just wanted to get a flavor that are we seeing increasing order inquiry in the Middle east region for our EPC business means how is the international order in floor order book or inquiries looking like and how likely is it that we may back some good large orders in those regions that’s in the next nine months.
Aankur Patni
We continue to pursue opportunities on engineering orders in international geographies. If you remember, the company had done considerably well in the last financial year on our international businesses. These opportunities are strategic in nature which we continue to pursue selectively and pick up orders that we get. We are aware of the geographies and the specific opportunities that you are referring to. We continue to pursue in all those segments, specifically Middle East Africa market. And we are, you know, we are, you know, in engagement with the right opportunities that we feel, you know, makes sense for our company and to ensure that we remain accretive to the overall profitability of the engineering segment.
Deepak
Okay. And sir, any plans to expand the membrane component manufacturing capacity in engineering? And just to follow up on that, how is the competition intensity in this domestic market when we are kind of bidding for this engineering project? Just to this last point.
Aankur Patni
So your first question on membrane capacity. We continue to monitor the capacity utilization of all our chemical product business segments. And as and when like we have done for our resin business, to the extent expansion of the ROHA capacity, the Doha new plant coming up, the company will take appropriate steps in augmenting capacity as and when it is required and we will come back and report those to the appropriate forum. With respect to your second question on the competition engineering segment, it is brutal, it is intense, there is a significant pressure on pricing and which is where we continue to remain selective in the nature and kind of project that we pick up from the domestic market.
Deepak
Okay, thank you so much sir for answering the question and all the best.
operator
Thank you. The next question comes from the line of Mihal Vyar from Nine Rays Equi Research. Please go ahead.
Mihir Vyas
Hello, Am I audible?
operator
Yes sir, you’re audible. Please go ahead.
Mihir Vyas
Hello sir, I’m new to the company. Can you please help me understand what is status on UP Jal Nigam project? I mean in terms of receivables.
Vasant Naik
As we have mentioned in the call, the fund inflow found the UP government for this contract has been very slow which has resulted in the execution getting affected and as a result the account receivable on this project continue to be at elevated levels. But since we don’t call out on specifics of individual contracts on the call, I will not be able to add any further other than saying the levels of the receivables are on the higher side.
Mihir Vyas
Sir, any color on how it is. Like by when can we expect it. To reduce or has it started reducing?
Vasant Naik
As of now the flow has not yet improved but we are getting continuous indications that the flow should improve in the coming months. So we remain hopeful that once the flow improves, apart from our receivables getting liquidated, our execution on this project should also get ramped up.
Mihir Vyas
Thank you sir.
operator
Thank you. The next follow up question comes from the line of Sabil from Unifi Capital. Please go ahead.
Sabil Dabhoya
Thanks for the opportunity. In the chemical segment, we had faced RM cost inflation in fourth quarter. Is the cost inflation now behind us or are we able to pass on the increased cost completed to our clients?
Aankur Patni
So as you will see in that segment performance we have been able to improve from the temporary dip that we had and we have been able to get back to the average profitability levels of this segment in the last financial year. So we feel good about how we have handled the past quarter. However, this is a very dynamic situation. As you will agree, we continue to monitor our input costs and we also look at the rupee depreciation impact that we may have going forward. So first quarter was good, but this is an area where we continue to need to keep track of all these various input variables and ensure that we’re able to deliver at the expected levels or the expected past performance levels of Profitability in this segment.
Sabil Dabhoya
Just to get a better color on the order inflow of the orders in the engineering segment would be taking over a lot of industrial projects. It will be more of selective government of let’s say World bank funded projects. How do we, how are we thinking about this?
Aankur Patni
So we remain consistent with our strategy with respect to the engineering business. Our projects are largely on the industrial side. Projects that we pick up on the infrastructure or municipal side like the Sri Lanka contract is very strategic but very few in nature. And that’s the strategy that we will continue to pursue and that’s the profile of jobs that we continue to pursue in the current offer. You know, offer bucket as well for us.
Sabil Dabhoya
Okay, thank you so much and all the best.
operator
Thank you. The next question comes from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Yeah, Namaskar sir. And thank you for a very detailed discussion. Just the closing point on this UP part of the UP project, sir, this was we got one of the few packages for a large project. So can you give some color? Whether only our packages are pertaining to some set of execution has been interrupted because of the cash flow issue or the entire setup is has to be awaited now because of this cash crunch issue and what is the exact from the Uttar Pradesh government on them not being able to clear the views of companies like us.
Aankur Patni
So at the onset it will be inappropriate for us to comment on contract received by other organizations. We can only talk about the contract that we are executing with this particular customer. As we said that we have receivables from this project which we are following up and pursuing with the customer in question here to help collect and because of the slowness of fund availability, we were forced to slow down the execution of this project. As we also said that because of the slowness over the past couple of quarters at least we have taken a conservative call on this particular project and reduced our estimate in the order backlog to be able to give a more realistic picture of the order backlog that we are pursuing.
We continue to engage with the customer very closely and we remain hopeful that the fund situation will improve and the fund will get allocated for us to liquidate the receivables and also for us to go ahead with the execution of the balance scope of the project.
Saket Kapoor
How have been the pace of execution for this ensuing quarter? I think it is being a monsoon quarter. How do execution plan of barring the these two legacy and the UP project which you have outlined, how are the pace? If you could give some color and Also sir, for a quarter on quarter basis also our employee cost has moved up. So what will you attribute and what should it be on a yearly basis?
Aankur Patni
So on the first point, as you correctly said, this is the monsoon season. So clearly for projects which has significant scope of current work on the outdoors, there will be an impact. We do projects all across the country and some of the projects, especially in the construction phase have some impact. At the same time there are parts of the project that work is happening indoors where we are able to progress at the expected pace of execution. So overall we feel good about the execution that’s happening across the board. On the project, the order backlog, some part of the projects also are getting done outside India where the impact of the Indian monsoon would not be relevant.
Coming to your second question.
Saket Kapoor
On the employee cost and one question also I have for Amit sir, Amit Patnizi.
Aankur Patni
But yeah, so he was possibly referring to Ankur Patnija, Vice Chairman. But on the employee cost, it’s a normal increase year on year that we’re experiencing. At the same time there are various other productivity measures that the company has kicked out which we feel would help us balance that increase on the employee bucket. And you know, again, this is a continuous process of action that the company takes to ensure that the overall cost is within the expected level.
Saket Kapoor
Mr. Patni, our company, ma’, am, only. If I could add. I could add only one point and. And then I can join the Q1. I do not have much time if you permit.
operator
So may I request to join the queue for a while?
Saket Kapoor
Okay, fine ma’, am, I’ll do that. Thank you.
operator
Thank you. Before we proceed with the next participant, a reminder to all participants please submit your questions to. Two questions per participant. Thank you. The next question comes to the line comes from the line of Tarun Agarwal from ON X Capital. Please go ahead.
Tarun Agarwal
Hello, good afternoon. So my question is related to Rohan Greenfield. We have done a capex of 400 crores and we and we have an asset turnover of 2.5 times. So is it a fair understanding that by FY28 we will be able to reach thousand crores in terms of revenue and also adding another one. Just wanted to understand that how this Roha Greenfield facility will be used to cater the export business for chemicals.
Vasant Naik
The asset turnover as you have mentioned will be 2.5 times as and when we reach the full capacity which we are expecting, expecting to reach over a period of around just under four years. But if you see the out of the total capex of 400 crores, 125 crores act was the cost optimization measures what we are introducing in the new facility. Our manufacturing base will be on a value of around 275 crores. So my asset turnover should be calculated on this figure. As regards to your second part of the question, I request Mr. Engineer to address that.
Aankur Patni
So on the second question, as we said this plant is primarily getting set up to cater to our exports business. As I said earlier in the call, we export to most of the geographies in the world. You know starting from usa, Europe, Asia Pacific, Middle East. So we will. And also part of this smaller part of this will also be used to cater to our increased business in the domestic market. So that’s where we expect this particular plant to, you know, plant to cater to the demand. Okay, got it.
Tarun Agarwal
Thank you.
operator
Thank you. The next question comes from the line of Omkar, an individual investor. Please go ahead.
Omkar
Sir, good evening. Thanks for taking my question. What is the revenue are you expecting. From roha plant in Q2 and full. Financial year Requesting you to give some ballpark figure for this Roha plant revenue.
Aankur Patni
So Umkaji, as you would know that we don’t share any specific data on any specific production facility or a specific business line. So we, as we said earlier in the call, we expect the plan to be commissioned in second quarter which is in this particular quarter. And we expect the plant to start shipping out products from the end of this quarter going forward. So we hope to ramp up capacity here. And this is a modern plant with all the latest technology. It’s one of the would be one of the, you know, better plants in the region.
And expect volume to pick up. As and when we have more to share on this plant, we will come back. But we do not talk about specific plant or business performance.
Omkar
And sir, what is the next positive trigger for ion exchange? As I have seen a different ion exchange three years back. So something Roha plant in my opinion should be the turnaround. So do you expect as soon as Roha plant will start our margin and overall business will reflect better than just now.
Aankur Patni
What we are seeing, we also feel, we also hope for the same thing. And we’ll continue to endeavor that all our segments, we are able to drive profitable growth across all our segments. So that we are able to continue to cater to the interest of our shareholders.
Omkar
Thanks for taking my two questions. Thank you.
operator
Thank you. The next question comes from the line of Ms. Reddy, an individual investor. Please go ahead.
Unidentified Participant
The answer to my question I already got. Thank you.
operator
Thank you. The next follow up question comes from the line of Henel Bagaria from Equicorp. Please go ahead.
Unidentified Participant
Thank you for the opportunity again, sir. So I just have one question, sir. Are we optimized in terms of labor cost and other variable cost for the consumer product division or do we see further savings out there? And also do we need, are we fairly optimized in terms of the existing product portfolio or do you see any more further margin investments other than the regular improvements? Some significant kind of investments for the division?
Aankur Patni
It’s a very intensely competitive segment that we are playing in. Very important for us to ensure that we remain cost competitive to be able to a make the required top line and the improvement in the bottom line. It’s also a segment which is extremely dynamic and our competitors and the industry is always coming out with new technology and new product offerings. It’s very important for us to also remain relevant to look at opportunities in the market segments and come out with suitable offerings that will excite our targeted customer base. So we will need to continue to invest in new products and technology in this segment to maintain our current share or grow our current share in the in the consumer product division segment.
Unidentified Participant
Okay, thank you sir.
operator
Thank you. The next follow up question comes from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Yeah, yeah. Thank you for the opportunity, sir. When we look at our shareholding pattern we find that under these there are shares to the tune of 16% being held by the employee trust. So if could just elaborate or anybody else could throw light on the nature of this trust and whether as per the regulation the trust will be there for perpetuity or we need to dilute the same over a period of time it holds 16.18% equity of the company.
Aankur Patni
These are employee trusts which are holding shares for relative of all the employees of the company.
The trust have been existing since the 80s and 90s of the previous century and there are no plans to dilute any form of equity from them.
Saket Kapoor
What is in the terms it will remain always with this and how will they get it accrued to the actual beneficiary? What’s the process of these getting the benefits? How are the individuals going to benefit out of it when the same remains in the first term?
Aankur Patni
The income flow from the shares which is dividend, that is what is used for the benefit of. And if at any point of time there is any other form of cash accrual which is directly attributed to these shares, these are for the benefit of all the employees of the company.
And would accordingly be distributed.
Saket Kapoor
Thank you, sir. Thank you for answering. And all the best to the firm.
operator
Thank you. Ladies and gentlemen, we’ll take this as the last question for today. I would now like to hand the conference over to the management of Ion Exchange India Limited for closing comments. Thank you all for participating in the earnings conference call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or. Would like to know more about the company. Please reach out to our investor relation managers at Valorum Advisors. Thank you.
Nupur Jainkunia
Wish you a very good evening.
operator
Thank you very much on behalf of Aion Exchange India Limited. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.