Saturday, August 11, 2012

ION EXCHANGE (INDIA) LTD - REPEAT




ION Exchange is one of my old recommendations @ Rs.135 ,which is now trading almost 5 % lower @ Rs.126/-. In my previous posting I clearly mentioned that ,attitude of its promoters towards this listed entity  is  the major cause of concern for this company even if it is operating in an industry with huge potential.We know ,the potential of water/waste water treatment  business is huge and scope is increasing with decreasing availability and increasing demand of water.Even this company is a pioneer in this sector and one among the few listed players from this segment ,till now investors are not enthused  mainly due to the conflict of interest factor.Promoters of this company having some privately held companies in the same line of business.But now , after a long wait there is some early signs of a change in their attitude.Now they decided to merge one of their biggest privately held company ION Exchange Services(IESL) with the listed entity.IESL is operating  in water/waste water treatment plant construction ,operation  and   allied services.Company having 27 offices across India and 2 abroad with an  employee strength of 1200.Even the current turnover of  of IESL is close to Rs.100 Cr,company having  concrete plans to increase its business by 5 fold mainly through acquisitions and expansions to other territories like South Asia, Middle East and African nations.On merger of this company with ION Exchange , these plans will materialize through the listed entity.This merger will also increase the promoter stake in ION exchange and chances are there for higher promoter commitment. In another important development ,company decided to aggressively concentrate in the Rs.4000 Cr retail water purifier market with its flagship brand ‘Zero-B’. Even if this brand is the pioneer in this segment ,company lost its market share to Aquaguard,Pure it..etc.Now it is planning to revive its marketing network and spend more for advertisement. In the financial front too company is showing better performance in recent times.For the FY2012 ,company posted a turnover of Rs.651 Cr and a net profit of Rs.18 Cr compared with Rs.573 Cr and Rs.12 Cr in previous year. Promoters are currently holding 41% stake (pre-merger) and big investors including  Rakesh Jhunjunwala holding another 12 % in this company .I  believe the management at last realized the potential of the company they are possessing (Listing of VA Tech Wabag may acted as an eye opener) and decided to correct their past mistakes.If it happens so ,ION Exchange which is operating in an industry with huge potential and with  well experienced promoters  may turn as  a multi bagger  even from current level of Rs.126/-


Related Readings :

 1)  Ion Exchange Services Ltd. launches Remote Monitoring of Water Treatment Plants
  2 )  Zero B plans comeback in water purifier market
   3 ) Ion Exchange (India) Limited signs a joint venture with Safic

17 comments :

  1. Dear ValuePick,

    Is SKS microfinance seeing a turnaround finally? Is the stock a buy now based on fundamentals.Thank s for all your help.

    Best Regards,
    Shankar.

    ReplyDelete
  2. Hi Valuepick,

    The RONW,ROCE all seem very poor consistently for this company.Va tech is muc better though not great RoA/RoE.
    How do you thing tehres going to be a drastic increase in Ion's number in medium term?
    But for aquisition news and intent to grow up,figures donot support??
    Rgds/VB

    ReplyDelete
    Replies
    1. Yes , that's why this 600 cr company is available at a market cap of 175 cr.Expecting an improvement going forward.

      Delete
  3. Sir
    Please give your coveted opinion on suzlon Q1 result. Can you find any positives.

    ReplyDelete
    Replies
    1. Really Pathetic result,one may book loss in Suzlon and keep close watching for a re entry, if situation improves.

      Delete
  4. Dear VP,

    Any views on Vadilal after the Q1 results? The results seem to be good and promoters have also increased their holding..


    ReplyDelete
  5. Sir,

    Are you tracking Wim Plast by any chance? if yes, what's your views on this?

    ReplyDelete
    Replies
    1. I have recommended Wimplast @ Rs.202 which is currently @ Rs.270 ,for details search the blog.

      Delete
  6. Dear sir, please give your comments on kaveri seeds and vadilal ind post results. MMM

    ReplyDelete
    Replies
    1. No change in my opinion on both these cos.

      Delete
  7. Sir,

    ROTO Pump Q1 results showed marginal decline, could you please throw more light on it? is it hold or sell?

    regards,

    Sachi

    ReplyDelete
  8. Dear sir...

    I am new to market, can i start with ur latest recommendation of ION EXCAHABGE ?

    and pls advice me to construct a strong stock portfolio..

    thanks

    truly yours .. muthukumar

    ReplyDelete
  9. Hello Sir... the amalgamation is set to happen...think this will start flying off as well....

    regards
    Reshma

    ReplyDelete
  10. dear sir,regards..holding ion ex patiently...do you think this is the time to add?thanks

    ReplyDelete
  11. Hello VP sir,
    how do you see ION exchange now, with the new govt putting stress on river water purification. PLease let us know your views.
    THanks,

    ReplyDelete
  12. Hello sir,
    Your recommendations on va tech wabag was phenomenal.regret to have missed out on that. Can I get into ion exchange at this point considering its in the same space.i know its your old recommendation.Just wanna confirm your recent stand on this scrip???

    ReplyDelete

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