Are Ion Exchange (India) Ltd latest results good or bad?

Ion Exchange (India) Ltd's latest financial results for Q2 FY26 reveal a complex operational landscape characterized by strong revenue growth but notable challenges in profitability. The company's net sales reached ₹733.94 crores, reflecting a robust sequential increase of 25.85% and a year-on-year growth of 13.88%. This performance indicates the company's ability to secure orders and execute projects effectively within the expanding water treatment market. However, the results also highlight significant margin compression. The operating margin, excluding other income, fell to 9.33%, down from 10.72% in the previous quarter, marking the lowest level in recent quarters. Similarly, the profit after tax (PAT) margin decreased to 6.80%, down from 8.31% in Q1 FY26. While the absolute net profit showed a slight sequential improvement of 1.70%, it declined by 2.77% compared to the same quarter last year, raising concerns about the company's ability to convert revenue growth into profitability. The financial data indicates that Ion Exchange is grappling with operational execution challenges, as evidenced by the decline in both operating and PAT margins. The company's return on equity has also shown a downward trend, standing at 16.26%, which is below its five-year average of 22.36%. This suggests that while the company maintains a strong balance sheet with minimal leverage, its operational efficiency may be under pressure. In light of these results, Ion Exchange has experienced an adjustment in its evaluation, reflecting the ongoing concerns regarding margin pressures and profitability. Investors should closely monitor the company's ability to stabilize margins and improve operational performance in the upcoming quarters to assess its long-term prospects.