ION Exchange (IONEXCHANG)
TurnaroundFairStock Score: 26/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹372.95 |
| Market Cap | ₹5,340.13 Cr |
| P/E Ratio | 45.04 |
| ROCE | 22.34% |
| ROE | 15.92% |
| Dividend Yield | 0.33% |
| Profit Growth | -75.68% |
| Debt/Equity | 0.36 |
| Sales Growth | 20.74% |
| Promoter Holding | 25.58% |
| 52-Week Range | ₹312.7 — ₹486 |
| Sector | Other Utilities |
| Book Value | ₹112.94 |
Strengths
- ROCE of 22.34% shows strong capital efficiency
- Low Debt/Equity of 0.32 provides financial stability
- Sales growth of 6.36% indicates continued demand in water management
- Essential infrastructure business with long-term societal need
Concerns
- Profit growth fell sharply by 33.45%, with latest quarter net margin only ~2.9%
- High valuation: P/E 27.54, P/B 5.16, PEG 4.33 offer no margin of safety
- Piotroski F-Score of 4/9 signals deteriorating fundamentals
- Low promoter holding of 25.58% and dividend yield of 0.41% are unappealing
AI Analysis
At first glance, ION Exchange appears to be a solid business in an essential industry. It earns a commendable ROCE of 22.34% and has a conservative Debt/Equity of 0.32. Yet, the recent numbers make me pause. Sales grew only 6.36%, while profits fell by 33.45%. That is not the kind of performance I like to see. The latest quarter shows a net profit of ₹21 Cr on sales of ₹734 Cr, a razor-thin margin of about 2.9%. The high P/E of 27.54 and Price-to-Book of 5.16 suggest the market still expects great things, but with a PEG of 4.33 and a Piotroski score of 4 out of 9, the fundamentals are not supporting that optimism. I am a fan of companies with strong moats, and water infrastructure in India does have durable demand. However, at this price, I am not being compensated for the risk. The near-zero dividend yield doesn't help income investors. The promoter holding of 25.58% is also below what I would usually like. A company with a 15.92% ROE and strong ROCE is not a bad business, but a 33% profit decline and a F-score of 4 warn me that something is going wrong. Is this a temporary blip or a permanent change? With the stock near its 52-week range, I see no margin of safety. I would rather wait for signs of recovery in margins and profit before considering this as a potential investment. Buffett's rule: be fearful when others are greedy. Right now, the market appears greedy on this one, and I am cautious.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer