Ion Exchange

This company is a pioneer in the sector of water management and in today’s time, this is one sector which has immense potential for the future. Despite being in such a lucrative sector, the stock never really caught much fancy because the market was not happy with the promoters, who held private companies in the same sector, creating a conflict of interest. Even now, the consolidated numbers show that there are 14 companies included. But the biggest privately held company – Ion Exchange Services Ltd has now been amalgamated into Ion Exchange. The management seems to be getting proactive and is trying its best to breathe life back into its flagship consumer water purifying product – Zero B. It could have sustained the first mover advantage had it not allowed the likes of Pure It and Aqua Guard to take over completely.

The company did well for Q4FY13, with net sales coming in at Rs.253 crore, up 37% (QoQ). Net profit was up 2.5 times at Rs.10 crore. And the company has ended FY13 with a consolidated net profit at Rs.14 crore, up from Rs.10 crore in FY12. In terms of segmental break up, its engineering segment remains its bread winner, contributing 65% to the topline. It is followed by chemicals, which contributes 28% and consumer products is at 8%. In terms of shareholding, as at end of FY13 promoters held 40.60%. Rakesh Jhunjhunwala holds 6.44% stake.  Reserves stands at Rs.136 crore.  EPS for FY13 stood at Rs.7.31 (face value of Rs.10/share) and this discounts the current price by around 13 times.