ION EXCHANGE (INDIA) LTD (NSE: IONEXCHANG) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Vasant Naik — Group Chief Financial Officer
Indraneel Dutt — Managing Director & Chief Executive Officer
Analysts:
Unidentified Participant
Purvangi Jain — Analyst
Chetan Vohra — Analyst
Kishore Kumar — Analyst
Rishab Shah — Analyst
Anupam Gupta — Analyst
Deepak — Analyst
Dhaval Pandya — Analyst
Saket Kapoor — Analyst
Pratik Kothari — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the ion Exchange India Limited’s Q3 and 9 months FY26 earnings conference call. 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 the conference call, please signal an operator by pressing STAR and then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorum Advisors. Thank you. And over to you Ma’. Am.
Purvangi Jain — Analyst
Good afternoon everyone and a warm welcome to you all. My name is Purvangi Jain from Algerium Advisors. We represent the investor relations of Ion Exchange India Limited. On behalf of the company, I would like to thank you all for participating in the Company’s earnings conference call for the third quarter and nine months ended 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’s belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place undue reliance on these forward looking statements in making any investment decisions. 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. The Habitat Mr. Ankur Patni, Vice Chairman Mr. Indrani Dal, Managing Director and CEO Mr.
Vasan Nair Group Chief Financial Officer and Ms. Nikisha Solanki, Company Secretary. Without any delay, I request Mr. Vasannai to start with his opening remarks. Thank you. And over to you sir.
Vasant Naik — Group Chief Financial Officer
Thank you Purvangi. Good afternoon everybody. It is a pleasure to welcome you all to the earnings conference call for the third quarter ninth financial year 2026 for the third quarter under review on a consolidated basis the Company reported an operating income of INR 7,344 million, an increase of 6%. Year on year the EBITDA stood at INR 593 million, a decline by 21% year on year and the EBITDA margin stood at 8.07% and net profit was INR 206 million while the PAT margin was 2.81% for the nine months of financial year 2026 the company reported operating income of INR 20,516 million an increase of 8%.
Year on year EBITDA stood at INR 1,902 million down 9%. Year on year the EBITADA margin stood at 9.27% and net profit at INR 1,189 million while the PAT margin was 5.8%. I would also like to highlight that the labor codes were notified on 11-21-2025 resulting in an incremental provision of INR 169 million which is recognized as an exceptional item towards gratuity and leave related employee benefits arising from past service costs now going through the quarterly segmental performance on a consolidated basis. In the engineering division the revenue for the quarter stood at INR 4297 million which is flattish.
On a year on year basis the Segment’s EBIT was INR 186 million down 28%. Year on year. The inquiry bank continued to remain steady during the quarter. There was sequential as well as quarter and quarter growth in order inflows primarily driven by medium sized opportunities. During the quarter the company secured two domestic solar sector contracts aggregating INR20.50 million covering ultrapure water systems, effluent treatment plants and zero liquid discharge solutions. Ultrapure and high purity water projects within the solar segment continue to see traction. The planned dispatches of certain high value engineering contracts for the international market got Deferred to the fourth quarter of financial year 2526 which impacted the quarterly performance.
In addition, execution of the UP Dalnigam order remain muted. The current total order book stands at INR 28,330 Million with an order inflow of INR 5,160 Million during the quarter. Moving to the chemical division, the revenue for the quarter was INR 2,300,307 million and increased by around 16%. Year on year the EBIT stood at INR 431 million reflecting a decline of 18% on a year on year. The moderation in profitability was primarily due to the product mix and ROHA facility costs. The stage wise commissioning of the ROHA facility continues to progress steadily and the company expects a gradual scale up in production volumes over the coming months.
The facility is being developed to become an industry benchmark in terms of product quality and sustainability which is expected to support long term growth and margin improvement. For the Consumer Product division, the revenue for the quarter stood at INR 987 million and increased by 28% year on year. The loss for the quarter was INR 33 million compared to a loss of 29 million for the same period in the previous year. This segment continues to witness healthy volume growth. The company continues to invest in the business to build a significantly higher and more scalable revenue platform over the medium to long term.
With this I conclude the opening remarks and before we start open the floor to the question and answer session. Mr. Indra Nil Dutt will give a brief of the budget on the company’s operations.
Indraneel Dutt — Managing Director & Chief Executive Officer
Good afternoon all. Thank you for joining and Wassam, thank you for the overall summary on the company performance since the budget was announced by the Union government just yesterday. A lot of you may have questions on the impact of the budget on the company’s long term and medium term prospects. We thought that we will share with you some bright spots that we see from the budget that got rolled out. I think overall there is a lot of focus in the budget expressing the Government of India’s long term commitment to infrastructure sustainability and the water sector.
I think prominent among those has been the strong support to the Jaljeevan mission project which was officially again reinforced that the project will continue till 2028 and the allocation by the government on the project has been significantly strengthened vis a vis the actual spend versus in last or this current financial year that we hope others would because we also have a significant part of the order backlog in projects of the UP Jaljeevan mission. In addition to that the government continues to invest in the sunrise industries like semiconductor with 40,000 crores additional outlay which essentially means a boost for our high tech solutions in ultra pure water and zero liquid discharge which we believe is where the company is well positioned with the recent wins in the solar solar space that we want to take forward.
Apart from that there are also green opportunities coming in the cloud based data centers that we will set up which will again require a tremendous amount of water and also will require you know wastewater management as well as requirement of our chemicals, you know and other portfolio over and above. The government also announced the announcement of five mega textile parts. While that brings a lot of focus and investment on the textile business segment, you know it also brings opportunities for your company on water treatment plants on zero liquid discharge solutions as well as on chemicals.
In addition to that critical mineral processing is an area of focus for the government and there also the company’s ion exchange membranes and resin’s portfolio will be useful. In addition to that there has been a revival of about 200 legacy Industrial clusters which is an opportunity for both our services division as well as our institution business where our products should play well into this investment line. Also as all of us are aware, the government of India signed an historic trade agreement with the European Union which will allow free flow or freer flow of goods and services across both these continents.
And we also have by virtue of our presence in Europe through our latest acquisition. We believe that this will augur well for the company as we try to increase our market share in areas like chemicals, resins, membranes as well as on engineered systems and equipment. So overall a lot to look forward to from a directionally from a medium to long term perspective. I think most of these measures of the government will is right. You know we are fully aligned in terms of leveraging the growth opportunities and potential in these segments. So with that, you know I just wanted to summarize, you know, our initial thoughts on the budget as we continue to study the fine print.
But with that I think we’ll be happy to take any questions that you know, the participants on the call may have for me and Vata.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and then one on their touchstone phone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Chetan Vora from Abacus Asset Manager. Please go ahead.
Chetan Vohra
Yeah, hi sir. Good afternoon. Sir would like to understand that during the quarter the gross margin. The gross margin has declined 260bps to be very precise. And then below that the employee cost has also increased by nearly about 130 weeks. Other expenses has also increased. And below EBITDA also depreciation cost has increased from 10 crores to 17 crores and the interest cost has again increased from 2 crores to 6.6 crores. Would like to understand, you know sir, what has been the reason and are there any one offs in these expenses or how should one look at it? And then I will come to my next question sir.
Indraneel Dutt
Yeah, so thank you for the question. You know while Vasanth will share some specific financial numbers but broadly across both our engineering and chemical businesses there has been, you know, a little bit of headwind I think on the. And I’ll talk about each of them separately and then Vasanth will, you know, give you the specific numbers. It’s a combination of, you know, some one offs, some that will continue for some time especially with respect to ROHA and also, you know, change a little bit in our mix across both the segments. So I think on the engineering side clearly the, you know, the UPJJM project that we talked about, I think those continue to move slow because of the low allocation of orders and also I think in terms of the mix of the mix of the project execution last year we had a significant amount of execution happening for our international projects which this year is planned for fourth quarter as a result of which we have had an adverse mix on the engineering side over and above that on the chemical side of the business.
It was a combination of depreciation hitting us with a full impact of depreciation and interest hitting us from this particular quarter also because of rupee appreciation some of our input costs have also gone up and which depreciation input costs have gone up as a result of which, you know, some of those impacts, you know, on the operations we are going to pass on to customers, you know, starting from this particular quarter as also some adverse mix in terms of, you know, comparatively little bit lower, you know, invoicing from our pharma and our chemical businesses. So that’s kind of the broad construction.
I will request Vasanth to give you some very specific details on the questions that you asked. Following up on my response.
Vasant Naik
Yeah, coming to the specifics of the queries which are raised specifically on the interest and depreciation. The depreciation, the interest cost.
Chetan Vohra
Excuse me, can we start from the gross movement? Then we come down, you know, one by item below that.
Vasant Naik
No, I think on the gross margin. I think our MD Mr. Engine has just explained that there are certain headwinds in the engineering and the chemical segment in terms of the adverse product mix and the cost increases on account of the rupee depreciation and in terms of the engineering segment, the overall mix of the projects which you are executing plus the UP project which is continuing to face the funding issues. So I think a combination of all these factors have impacted the gross margin. And coming specifically to the interest and depreciation, this is largely on impact of the ROHA facility which was commissioned in the last week of September.
The increase in the interest increase is only because of the ROHA while the depreciation, a major portion of that is on account of the Rohaan depreciation hitting the pnl.
Chetan Vohra
Can you tell me what was the total CAPEX done for ROI and how much it was done through internal accruals? And how much that has been sourced and what is the the capacity which has come on the system and towards what the capex was incurred.
Vasant Naik
In terms of the rover as we have been informing in the earlier calls also the total CAPEX of ROHA is estimated to be in the region of 450 crores and we have tied up a loan, long term loan of around 345 crores with a banking agency. So that is in terms of the capex, in terms of the capitalization in the books, around just under 285 crores has been capitalized in the books. And in terms of the capacity which has come on stream by the end of the, at the end of the third quarter it is in the region of just under 40 to 45% range.
Chetan Vohra
So when we say you are just I the total of the 450 crores we have capitalized 285 crores. And anything standing in CWIP? Sir?
Vasant Naik
Yeah, around 130 crores is standing in CWIP.
Chetan Vohra
So broadly, broadly we have incurred the the CAPEX for the ROA and what capacity will be coming out, sir, for the roas in terms of quantification, if you can see towards what all resins, membrane, what all, you know the capacity is coming on this.
Indraneel Dutt
So this plant that is coming up is fully for our ion exchange resins. This is a plant dedicated to ion exchange resins and primarily for the exports market. As we have said in the last call, also we are in the process of sequentially commissioning the full production. We have already commissioned the Catavan stream and we are in the process of commissioning the rest of the product line. So this is a phased process and which is again as per our expected lines that we are ramping up the production of this facility which is dedicated to iron exchange regimes for the export market. Sir.
Chetan Vohra
Right. And sir, in terms of capacity, in terms of quantity, how much the capacity will be there in the in terms of tonnage.
Indraneel Dutt
So that is something that you know, we would not be able to give you such specific information. As I said, you know, cations is one of the major stream of product lines which is now fully stabilized and we are ramping up our production like that. The rest of the capacity, rest of the product lines will also be commissioned which is on on way in a gradual basis. And then you know the plant, you know will will come up at least all the product lines will start getting shipped out from the plant. The teams are working on it.
We are not seeing any adverse challenges. So things are moving as per plan.
Chetan Vohra
And so by when the entire.
operator
Sorry to interrupt. Mr. Chetanwora, may we request you return to the queue for follow up questions.
Chetan Vohra
But this is in the interest of everyone. You know I am asking for.
operator
But sir, there are several other participants waiting for their turn so I would to return to the queue for follow up questions please. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit yourselves to two questions each per participant. You may rejoin the queue for follow up questions. Our next question comes from the line of Kishore Kumar from Unified Capital. Please go ahead.
Kishore Kumar
Good afternoon all. So actually in the Q2 call happened in November, we were guided for better execution and better profitability in the engineering segments. However, the actual numbers are actually remained under pressure because we already know that the legacy project of Jarjeevan mission was lagging began. Could you please help us understand the gap between the guidance and actual numbers?
Indraneel Dutt
So we have been fairly consistent. Kishoreji in a commentary about the two legacy projects. One is the up Georgian mission which is delayed because of lack of funds which is industry wide issue. And also the one legacy project that we continue to execute where we have adverse headwinds in terms of profitability. The expectation that we had in terms of a better, you know, better invoicing performance or profitability performance has been on certain international execution that we are currently underway, part of which we are expected to happen in third quarter. But because of, you know, reasons beyond our control now we expect the invoicing to happen for these international projects in the fourth quarter, which is the current quarter of the financial year.
So it’s more of a timing issue and we expect that, you know, those, those invoicing and the accompanying revenue and the profitability will be coming in the fourth quarter of this financial year.
Kishore Kumar
Got it sir. For the chemicals segments for the ROHA facility, I think you mentioned that 40 to 45 percentage of the facility has been commissioned now and remaining will be commissioned gradually. Can you give some quantitative figures for this facility? Like revenues are EBITDA gross margin at similar to the existing facilities or it’s lower because of the ramp ups. Can you give some specifics on this?
Indraneel Dutt
So you know we don’t share such specifics. I’ll give you a little bit of a qualitative answer and if there’s anything more colored than Varsan will add quite a while. Versant said that 40 days 75% of the facility has been commissioned yet as I said, you know there is, there are Parts of it. And I want all of you to understand one is that there are multiple product lines. I called out one product line that we have stabilized and commissioned. Now we have not taken that product line to the maximum capacity because that’s a function of how much business that we are getting for the product line.
Otherwise there is no point in producing more and increasing our inventory. So cation production is stabilized and we are, you know, we are generating those products. Production is happening. The other product lines are under various stages of commissioning and stabilizing and that will take some time. Right now, you know, in terms of. And this is exactly going up for our plan. This is a chemical plant. It takes time to stabilize and get the necessary quality and specification of products coming out from the export oriented unit. Further to that the products will require many of these products actually go into drinking water applications.
It will require us to get the necessary approvals from the world quality standards like National Sanitation Federation of USA as part of WQA requirements. And once those are done, only then will our customers be open to accepting these products. So we are trying to commission the plant and all the products at the same time expediting our approval process for this product which will help us then, you know, sell or they get customer po. So this entire process is underway. Our original plan has been to kind of get to full capacity utilization in four years. We stand by those numbers.
We are in the process of slowly gradually scaling up the plant. And right now all our actions are going on expected lines. Having said that, I will ask maybe Vasam to give you a little bit any additional color or flavor he wants to provide. Yeah.
Vasant Naik
You asked a specific question. How is the margin profile of this facility? Once the plant is fully commissioned and the stabilization of the product is in place, we expect the margin profile to be similar to what we are presently enjoying with our uncle business.
Kishore Kumar
Okay, so just a follow up on this.
operator
Sorry to interrupt. Mr. Kumar, may we request you return to the queue for follow up questions please? Right, so sir, two questions each per participant for you can rejoin the queue for any follow up questions please. So there are several other participants waiting for that one. Thank you. Our next question comes from the line of Rushab Shah from Bugle Rock pms. Please go ahead.
Rishab Shah
Yeah, hi. Thanks for the opportunity. Am I audible?
operator
Yes.
Rishab Shah
You have mentioned that the semiconductor opportunity could be a big one for Iron Exchange. And you were negotiate. So you were negotiating them orders on that front. So any update on that? Has he received any order? And according to your sense what would be the market size of this opportunity and how much Ion Exchange will benefit from it.
Indraneel Dutt
So the opportunity for semiconductor exists in both ultra pure water as in also in waste water. Right now there is only one two plant plants that have got to the erection stage which is the Tata. Both are with the Tata. One is the Dholera project and the other is the Assam based OSAT project. We participated in both the projects but we did not pick up the orders because we felt that the current price levels were not conducive for a profitable execution. There are other projects that we continue to build. You know, in the interest of confidentiality I cannot share anything more.
But whatever projects are there in the semiconductor space that is currently available, the company is pursuing those. And if the profitability profile of the projects are in line with our expected profitability of the engineering segment, we will definitely pick up the project in terms of our capabilities. We have as a company been in the semiconductor space for the last 40 years. You know one of the earliest plants of Semiconductor, Mohali Semiconductor Ltd. In Mohali was done by Ion Exchange. To this extent the plant is working beautifully which talks about the durability of the products and solutions supplied by the company and also the technological know how that the company.
It is a matter of picking up the right project at the right profitability and we continue to pursue those. And as and when we see or have a success we will definitely come back and share that with you. In the related space is the same solutions offered in the solar side and we have given you the summary. In the summary Vasanth has talked about the two wins we have had in the solar project. We have also given a declaration to the stock exchanges for those wins. We continue to pursue other projects in the same ultra pure water space in solar, semiconductor, green hydrogen as well as in data centers.
Rishab Shah
Okay, so sir, my next question is when we get an EPC project. So what are those checkpoints you check so that we don’t end up on the end up losing money in a bad project or we don’t stretch our own balance sheet.
Indraneel Dutt
So we have a good question. We have a fairly strong and we have put in a stronger review mechanism in terms of the appropriate profile of projects to pick up. So clearly the project profitability is important. Clearly the credit worthiness of the customers is important. Clearly the cash flow profile of the project is important. Clearly the essential risks that we are taking on to the project is important. The type of industry, the type of affluence is important. Liability periods are important. So there is a fairly strong Credit review mechanism that the company pursues for taking projects.
As I have said in the previous calls that pursuant to our learning from that legacy experience of execution where we have we continue to face profitability headwinds. We have become very selective in picking up projects with the right profitability profile.
Rishab Shah
Okay, so this project which is coming up for our reason. So by when would this be up and running?
Indraneel Dutt
So as I said, the plant is getting commissioned. We are beginning to get revenues from the facility. We got some initial revenues in the last quarter. Very small in the overall context of things. Our revenues in this quarter will increase. But as I said that there is an approval process and certification process of our products which we are in the process of doing. So we expect the revenues to significantly increase in the subsequent or the next financial year.
Rishab Shah
Okay, thank you. I’ll get back in the queue.
operator
Thank you. Your next question comes from the line of Raghav Maheshwari from Kamayakhya Wealth Management. Please go ahead.
Unidentified Participant
Good afternoon sir. First of all my first question would be around the ROHA resuming plan. Sir, if you can tell us what has been the capacity utilization for that plant for the commissioned capacity for this quarter.
Indraneel Dutt
So it’s a very large plant. And so as I said, you know we have just commissioned the plant. So right now the capacity utilization is very very less. As I said, you know this requires us to get the products qualified. We are releasing the product in certain applications in the domestic market. But you can expect the capacity utilization to start ramping up from the next financial year. And our outlook consistently for the next financial year has been 25% of the overall plan. And we believe that is possible for us to achieve based on the phase commissioning and stabilization that we have reached in one product line and the work that the team continues to do on the ground in the plant for the other product lines.
Unidentified Participant
Okay sir, my next, next question. I might have missed that information when we were talking about the budget. So first of all how much of the receivables do we have stuck as of now in this JAL J1 mission and given this budget increase of by the government in this union budget, what sort of impact do we see for our order intake in this? And like you mentioned that the jail given mission orders are still they remain muted. So if you can throw some light upon this.
Vasant Naik
Yeah. As we have said before also the funding from the UP government on account of the judge given mission has been very subdued on very negligible in this quarter. So our receivable there is not much of Change compared to what we had in the previous quarter. As was mentioned when we just informed you about the budget announcement, the Jal Jeevan mission, the outlay has been increased in the current budget and we do hope with the increased outlay and the mission being extended up to 2028, the fund flow for the project will improve and our overall receivables will get benefited with the disbursement which should happen in the in the coming months.
Unidentified Participant
So sir, are we looking to take up more projects in GGM coming forward?
Indraneel Dutt
No. In the current construct, the way the scheme is, you know, we don’t anticipate to take up more projects. Our current focus is to execute these projects. As Vatan said, with the renewed commitment from the government, we expect funds to flow in and that will allow us to a recover our pending receivables and also allow us to liquidate the rest of the backlog which will possibly take us a couple of years, but at least we will see some progress beyond this. This is not an area of focus for us. We are more focused focusing on water treatment and wastewater treatment in areas like ultra pure water, high purity water, critical wastewater desalination.
So that’s the focus area of the company. However, we continue to remain firm on an execution of the current order backlog for gel diver mission.
Unidentified Participant
Okay sir, thank you and all the best.
operator
Thank you. Your next question comes from the line of Anupam Gupta from HDFC Mutual Funds. Please go ahead.
Anupam Gupta
Yeah, so a couple of questions. So one on each segment. So on the engineering segment, obviously the performance in this quarter was weak and you said that it should revert back in the fourth quarter. But given where your order book is, how do you see the growth and margins for the engine segment panning out over FY27? I believe.
Indraneel Dutt
So. I would say first of all that you are right in your, you know, in what we said, said that we expect the fourth quarter to be higher in terms of invoicing and specifically for the international profile or international mix of the orders that we have in the executable backlog, which partly we had expected to happen in the preceding quarter in terms of our order execution, execution, visibility or expectation for the next financial year. I think we’ve had a decent order inflow for the company in this year. In fact, in the 3/4 of this year we have already exceeded the annual order intake of the last financial year.
We expect orders to flow into in this current quarter as well. So the order intake has been positive even though we have become significantly selective in picking up orders. So we expect those orders to get executed with reasonable profitability and we want to slowly improve the erosion that we had happened we had seen. We want to improve that execution of the engineering orders. So overall we expect a similar, if not slightly better outlook from the execution, both from an invoicing as well as from a profitable standpoint for a segment.
Anupam Gupta
Okay. And in one of your earlier comments you have mentioned there are some structural changes to margins in the chemical business. Over the last four, five years you have done 24% sort of average margins in chemicals. So let’s say as an UNROHA ramps up over the next four years and your normal existing business continues, what sort of margin levels should one be comfortable with in the chemicals business?
Indraneel Dutt
So as we have been saying consistently that, you know, the 28% or roundabout margin that we were able to continue in the chemical segment, I mentioned that repeatedly, is itself a challenge for us to do. I think over the last few quarters the company has been successful with all the various variables that are there to maintain that price. You know, that margin levels in the last quarter because of the rupee depreciation, we faced some input cost challenges which we expect to pass on in this current quarter to partly offset that importance. We also have had, you know, little bit of mixed challenges which is why, you know, our profitability on the segment was down.
And we are working to see that we can improve on that through various measures that are taken. None of them are structural measures per se. They are more, you know, business operating actions that we are taking, including passing on some of the price increase to the customers. We have been slow and reasonable, but now we believe that we have to pass it on back to certain segments as ROHA ramps up. The ROHA profitability should be similar or better over time, but we don’t anticipate any significant increase in the current quarter. As I said, in the subsequent year, financial year, you will see the benefits of ROHA coming in.
But with the price, price increase being passed on to our customers, we expect the profile to be, you know, to be kind of similar, if not slightly better, coming back to the average of the of the current financial year.
Anupam Gupta
Okay, understand. Thanks a lot.
operator
Thank you. The next question comes from the line of Deepak from Sundaram Asset Management Company. Please go ahead.
Deepak
Yeah, thank you for the opportunity. I’m audible.
Vasant Naik
You’re audible?
Deepak
Yeah. Sir, my first question is on again this Aroha plant. So just want to double check after 43000 cubic meter capacity, how much of the capacity will be Commissioned by end of let’s take Q4 this fiscal year. And on that capacity, how much utilization are we expecting in FY27?
Indraneel Dutt
So you know, as I said, you know we would typically not like to you know, give a specific number but you know we as I said we will commission. We have already commissioned one of the major product lines, the Cation. But that capacity, you know increase will happen over time based on the order received. We continue to execute on the rest of the product lines and you know, including anions and mixed beds. And so we expect that about, you know, we will be able to get to 25% capacity utilization by the next financial year. And our commissioning and stabilization process is going very much as per our origin general plan.
Deepak
Okay, but sir, when you mention this 25% capacity utilization in FY27, we are talking about full plant commissioning, right? That 43000 cubic meter capacity.
Indraneel Dutt
Yes, we will, you know, definitely, you know, you know we are trying, you know earlier but definitely in the next financial year the plant will be fully commissioned, all product lines. However, as I said the, the cap capacity utilization be a function of the demand generated. It’s a new plant and it requires approvals. As I’ve already mentioned in the, you know, previously in the call. We’re going through all of that process as we speak.
Deepak
Generally how much time does it take for us to get product approved from a new plant? Is it like it takes couple of quarter or is it couple of months? Because I’m not trying, I’m trying to understand what is the revenue visibility means. Are we able to a certain with some certainty in from this roha plant in FY27.
Indraneel Dutt
So it typically takes a quarter if everything goes right and then you know, we have to approach the customers and then there is a customer approval process that will follow which will take typically another quarter. So if everything goes right, you know this is the minimum time that will be taken. Again that has been a part of our original plan as well. And that is why we have put a number 25% utilization by next financial year.
Deepak
Okay. Sir, I had one question on the engineering.
operator
Sorry to interrupt, Deepak. Sir, may we request you return to the queue for follow up questions please. Okay, thank you. Our next question comes from the line of Dhawal Pandya from 47 Alpha Capital. Please go ahead.
Dhaval Pandya
Yeah, hello. Am I audible?
operator
Yes, you’re audible.
Dhaval Pandya
So I had two questions. Like one is on the loans, like as we go through the financials we can see there’s substantial increase in the loan. So can you tell us what, what amount is of the short, what are the short term loans?
Vasant Naik
The overall increase in loans is primarily on account of the term loan which we have taken on account for the ROHA facility. And out of the total loans around 55 crores will be in the short term category.
Dhaval Pandya
Okay, and as you mentioned that you are, you know, venturing out in solar as well. So what’s this contribution of solar in overall revenue?
Indraneel Dutt
So you know, that varies. Typically we don’t disclose these numbers but that varies, you know, against our current order inflow of about, you know, 1100 plus crores, I mean 205 crores is the two orders that we announced to the street. Again, it is not consistent, you know, every year because it depends on projects when they come up for, for order placements and the mix varies. We are present across the segments. But what we can tell you is that we are actively pursuing solar opportunities and semiconductor opportunities and as and when those come up for closure at the right profit and you know, risk profile, we will pick up those jobs.
Dhaval Pandya
Okay, and one last question like what’s the.
operator
Sorry to interrupt, sorry to interrupt. Mr. Pandya, may we request to return to the question queue for follow up questions please.
Dhaval Pandya
Thank you very much.
operator
Your next question comes from the line of Saket Kapoor from Kapoor company. Please go ahead.
Saket Kapoor
Yeah, Namaskar sir. Hope I’m audible.
Indraneel Dutt
Yeah, Namaskarj, you are audible.
Saket Kapoor
Yeah sir, as per the conversation which we are continuing for the last 30, 35 or 40 minutes, is it, is it safe for investors to assume that the worst is behind in terms of the lower margins which we are currently exhibiting in the engineering segment pertaining to the legacy orders and also with the scenario playing out in terms of the chemical and the consumer product losses also on the, on the higher side, what should investors envisage going ahead firstly for the next financial year and whether the course correction exercises are over and we could see now growth with improved profitability going ahead? Are these assumptions in terms of what the market conditions are today, a fair one or we need to wait for more pain to flow through the pnl?
Indraneel Dutt
So I wish I could have said that everything the worst is behind us, but I will not say that I think we continue to correct the P and L and improve the situation. As we have said, the legacy project and the UP execution is still pending. Much as you would have liked to get them over. But you heard our receivables on account of UP and we don’t want to load our books and add more receivable burden on us. So the, the legacy project will continue to execute and we are, you know, working on it and hopefully, you know, in the next financial year it will taper off up will continue to be there.
As we have mentioned, we have significantly tightened on the engineering front or order selection process and we expect that the learnings we had in the past will not get repeated, which is why we have been very selective. Even though we have crossed our last year’s order book yet we have been extremely selective in picking up deals. So yes, over the longer term I would agree with your assessment that the overall profitability and the segment performance on the engineering side should increase. But that is in the longer term we still have, I would say, a time period to cover where both UP and the legacy project execution will continue.
On the chemical front, we will be passing on some of the price impact to the customers, you know, and as ROHA gets commissioned and the revenue from ROHA increases, we will expect some improvement in the chemical profitability. But again, that is too early to call. We have to get ROHA commissioned stabilized, certified orders to come in and then execution will pick up. As we ramp up ROHA capacity utilization at that time we can expect some improvement. But it is still, you know, it will still sometime away as, because we have said that our original estimate, which we standby is to have ROHA capacity utilization of 25% for the next financial year.
So longer term, yes, the outlook of both these segments are good. On the engineering side, we continue to strengthen on our membrane portfolio which is a part of the engineering segment where we see good tailwinds are coming with our product development and production. We are similarly seeing good tailwinds on the services front. So all of this on the longer term augurs well for the company. But in the shorter term we continue to work through some of the challenges which have impacted the payroll in the past and we would want to get over them. The good news is we have not seen any additional adverse impact so far.
But we have to still go through the grind and get over the current headwind.
Saket Kapoor
And on the consumer product also, sir.
Indraneel Dutt
From the consumer product side, we have seen strong tailwinds of growth. I don’t know if you have seen our Bharat Kapani ad that is there out there. You know, in commercials, in newspaper, print media, we continue to invest in advertising and promotion. The business has continued to show a 30% year and quarter year on year growth so far. YTD, if you watch the IPL or the T20 games, you will see Bharat Kapani Ad coming prominently and all of this require investments and whatever profits we are making in the division, we are plowing it back into advertising and promotion to sustain this 30% growth that we are seeing.
We expect next year to continue on similar trend. Our services business is growing about 30%. One third of the overall segment revenues coming from services, which is again a good positive indicator. We are getting into newer parts. I think still our coverage in India leaves more to be catered to. We are already the leaders in the softener part of the business. So overall the segment is looking strong and we believe that next year we could come close to breaking even in this segment as well.
Saket Kapoor
Right. Sir, Last is the second question.
operator
Sorry to interrupt. Mr. Kapoor, may we request to return to the queue for follow up questions?
Saket Kapoor
Please take it.
operator
Our next question comes from the line of Pratik Kothari from Unique Portfolio Management Services. Please go ahead.
Pratik Kothari
Hi, good afternoon sir. So one, I mean to your point, the order this first nine months has been, I mean we have surpassed the last year number also. I mean in the presentation you did. You do talk about solar and fuel winds and the solar project. What are. We seeing is this international markets, domestic, any particular segment, what’s working there?
Indraneel Dutt
So as I said, you know, we are actively soliciting business while being selective about it. We are in all the important segments. We continue to actively and very aggressively bid for projects. However, as I said, we continue to be very selective in what we pick up. Similarly, on the international front also we have increased our activities. We’ve picked up recently a project with one of the largest dairy companies in Saudi Arabia. You know, these are some of the wins that we continue to pursue. We continue to engage with companies on the energy side in the Middle east and hopefully we will see some of those fructifying.
So our activities on the front end are significantly engaging and we continue to push on both the domestic and the international front. And as and when we see some, some of those closing favorably, you know, for the company, we will definitely come back with suitable declarations.
Pratik Kothari
And second, this X of up, does. This legacy project get done in? Does it, if it does, how long in FY27 does it go on in X of this up and legacy? Sir, I mean are, I mean the normalized margin is the word I have to use it high single digits or are we still doing those upwards of. 11, 12% that we used to do. For a couple of years?
Pratik Kothari
So the both the legacy project, I’ll talk about that first. We continue to execute that. It’s A very large project and hence, you know, it continues to be executed. It will flow into the next financial year. As we said, it will taper off. A lot of the activities right now is on the construction side on the site. It’s a large plant, it takes time to be commissioned. Most of the supplies have been completed but it is still a significant portion is left to be executed. Finally of the overall order value on the up side they said we have about 400 crores of order backlog on up that we continue to execute.
We believe if the funds flow starts coming in in the next financial year in the right flow, it will take us a couple of years to finally come out of those projects and these projects will move into O and M. We will not leave those projects but we’ll move into the operation and maintenance of those projects. Apart from that, we continue to be selective in pickup of orders. So we believe that these will be in the high single digits. It’s very rare that in the project business you end up with, you know, very attractive profitability considering the competition we see in the market.
But our endeavor will always be to ensure that we have a profitable business on the project side.
Pratik Kothari
Thank you and all the best, sir.
operator
Thank you. Our next follow up question comes from the line of Chetan Vora from Abacus Asset Manager. Please go ahead.
Chetan Vohra
Yeah, hi sir, thank you for considering the question. Again, would like to understand, you know the, the Roha capex, the Asset terms are 2.5 times, right? As you had mentioned in the last call.
Vasant Naik
Yes. Over a period of four years.
Chetan Vohra
How do you see the payback period to be for this plant? Within what time frame? We are expecting a payback, sir.
Vasant Naik
We are expecting in the region of around four to five years. Under five years. The payback should happen for this facility.
operator
Mr. Bora, please, if you can rejoin the queue for any further follow up.
Indraneel Dutt
I just qualify the payback comment of Vasanth. You know, it is slightly longer than what we wanted. But the reason is that this is a fully sustainable, fully circular plant. One third of the CAPEX has gone to ensure that, you know, every, you know, not a drop of water is discharged out. It’s a zero liquid discharge plant. A lot of capex has gone to ensure that, you know, in all parameters, all input, you know, items. It is almost fully circular plant. Once commissioned, it will be one of the best in class plants in the world.
So we have tried to ensure that this is module plant which is why the capex is slightly higher. And accordingly the payback is taking a Little longer. Ideally would want to have a payback between three and four years. I just wanted to qualify that. That is a reason that the company and the board made a conscious decision to see that we have the best in class plant in the world in terms of sustainability and circularity.
Chetan Vohra
Right, sir. And on the plant only just these are. The entire capitalization will be happening this year only, right? FY26.
Vasant Naik
Yeah, we’re expecting largely the capitalization to get completed by March in a major part at least.
Chetan Vohra
Okay, sir, thank you.
operator
Thank you. Thank you. Your next follow up question comes from the line of Kishore Kumar from Unified Capital. Please go ahead.
Kishore Kumar
Yeah, thanks for taking my question again, sir. Now that the legacy project will actually will be there in 27 as well, the profitability will be at a lower end in H1. Should we, should we assume actually lower profitability in H1 as well of next financial year?
Indraneel Dutt
No, I don’t think, you know, there should be a reason to think that way. The project will taper off. So the impact of the project as we keep on grinding and executing that job will keep on progressively coming down. And as we execute the UP project, provided the fund flow starts, that is at a better profitability mix. And then our other projects we’re picking up are healthier. So we would not say that at the same time it will take us some time to get behind all those legacy issues. So I don’t see a reason to further worry at this time.
I’ll possibly keep it at the level of performance in the, you know, in the earlier part of this financial year. Got it.
Kishore Kumar
Sir. My presentation is on the chemicals margin. You actually answered it to a previous partisan. Now the Q3 margins are at a lower end because of the ramp up and then the ramp up in the ROHA facility. Should we assume similar margins for the next 2, 3/4 and then the ramp ups actually benefits the margin?
Indraneel Dutt
I would say that, you know, there are parts of it. Right. So the price impact due to the rupee depreciation, I think we will try to recover partly in the next quarter. We are also working on the mix where certain segments I called out earlier in the call, we are trying to see how we can get the improvement with respect to roha. You know, we anticipate this current quarter to be similar because we currently in the process of commissioning and stabilizing the plant and getting the product certified. So for ROHA to fully, you know, give you the benefits of the impact of the ROHA plant, you know, coming up, I think it will take us A couple of quarters.
But the rest of the. There’s still beyond roha. There is still a lot of products that we manufacture and exp invoice for the chemical segment. And we expect and our endeavor will be to try and get back to, at an operating level to the performance that we have shown before ROHA got, you know, the depreciation and interest expenses of ROHA started hitting us from this quarter.
Kishore Kumar
Got it sir. Any change in the engineering segment guidance. For this year and next year? Because we expected H2 to be better. Now Q3 was actually flat on a year on year basis. So Q4 execution will actually compensate that or will it be actually lower?
Indraneel Dutt
So Q4 should be better than Q3. That’s what I think we can say right now. Next year, progressively the situation should improve from the average of this year. But again, as I said, there are still parts of the legacy project that we need to complete out there are still structural fixes we are putting in place on the engineering business. And as our membrane business starts taking up more and more, as our services business starts taking up more and more, in the longer term we will definitely see, you know, upward performance on the profitability of the engineering segment.
But there’s still, you know, we are, it’s a working process for us. We know the path, we just about working on that execution.
Kishore Kumar
Got it sir. Thank you.
operator
Thank you ladies and gentlemen. We will take that as our last question for today. I now hand the conference over to the management of Ion Exchange India limited For closing comments.
Purvangi Jain
Thank you all for participating in this earnings conference call. I hope we have been able to answer your question satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our investor relations manager at Velorum Advisors. Thank you.
operator
Thank you. On behalf of ion Exchange India Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.