Ion Exchange (India) Ltd
NSE:IONEXCHANG
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
440.25
732.15
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Ladies and gentlemen, good day, and welcome to the Ion Exchange India Limited Q4 and FY '24 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you. And over to you, sir.
Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem 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 earnings call for the fourth quarter and financial year ending 2024.
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 risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The process of today's earnings call is purely to educate and bring awareness of 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 opening remarks.
We firstly have with us Mr. Aankur Patni, Executive Director; Mr. Vasant Naik, Group Chief Financial Officer; Mr. N. M. Ranadive, Group Head of Financial Planning and Risk Management and Mr. Milind Puranik, Company Secretary. Without any further delay, I request Mr. Vasant Naik to start with his opening remarks. Thank you, and over to you, sir.
Thank you, Anuj. Good afternoon, everybody. It is a pleasure to welcome you all to the earnings conference call for the fourth quarter and the financial year ended 2024. For the fourth quarter under review on a consolidated basis, the company reported an operating income of INR 7,818 million, an increase of 21% year-on-year and 41% Q-on-Q. EBITDA reported was INR 921 million, representing a decrease of around 13% year-on-year, but an overall increase of 31% quarter-on-quarter.
EBITDA margin stood at 11.78% and net profit was INR 725 million, a decrease of around 11% year-on-year, but an increase of 54% quarter-on-quarter, while the PAT margin was in the region of around 9.27%. For the financial year ended March 24, on a consolidated basis, the operating income stood at INR 23,479 million, an increase of 18% year-on-year. The EBITDA stood at INR 2,720 million, an increase of 6.7% year-on-year, and the EBITDA margin was reported at 11.5%. The profit after tax was INR 1,954 million, an increase of 0.2% on a year-on-year basis, and the PAT margin was reported at 8.32%. Now let me take you through to the quarterly segmental performance on a consolidated basis. In the Engineering division, the revenue for the quarter was INR 5,290 million, an increase of 17% year-on-year. The EBIT for this segment was INR 537 million, a decrease of 4% year-on-year.
The segment witnessed strong international order inflows during the quarter. The domestic enquiry bank is robust, and we are hopeful that the finalization of some of the large value opportunities would accelerate in the next few months. Engineering segment recorded sequential improvement in turnover on the back of execution of large EPC job picking up during the quarter. At the end of the financial year, March 2024, the total order book for Engineering division stood at INR 3,546 crores.
Coming to the Chemical segment, the revenue for the quarter was INR 1,990 million, an increase of around 21% year-on-year. The EBIT was INR 478 million, a decrease by 1% on a year-on-year basis. The segment recorded improved volumes while maintaining healthy margins. Coming to the finance segment, the Consumer division segment, the revenue for the quarter was INR 728 million, an increase of 41% year-on-year. The loss for the quarter was INR 28 million versus INR 7 million loss in the same quarter of the previous year. The company's merger process with 2 of its Indian subsidiaries, namely Global Composites and Structural Limited and Ion Exchange Environment Management Limited was successfully completed during this quarter. The merger application of Ion Exchange project and Engineering Limited was withdrawn by the company and will be considered for refining in due course of time.
With this, we will now move to the Q&A session Anuj. Thank you very much. We will now begin the question and answer session.
[Operator Instructions] Our first question is from the line of Ranodeep Sen from MAS Capital.
Can you give us a flavor of the INR 8,000 crore bid pipeline that you mentioned? Like, what kind of projects are expected there? And if you can also comment on the success ratio of bidding through the adding a project.
Most of the big pipeline is to the private sector and to a much lesser extent to the PSU, government sector, the municipal sector is insignificant as a part of this entire pipeline. Again, a major portion of this is in the domestic segment. We are specifically excluding here, as we have been reporting on all the quarters, any mega opportunity are not included in the big pipeline as declared.
And in terms of the success ratio, sir, traditionally, what has been our success ratio in terms of the bidding for these?
It could be between 15% to 20%.
So my next question was, we've seen the list of clients. When it comes to the Hotel, Taj Group, Leela, Hyatt and even Oberoi, right? Given we are seeing a huge CapEx going around from the entire hotel industry, have you seen traction in this regard when it comes to them as a client for us?
We worked with almost all the major hotel brands, and we do expect growth from that segment in times to come. As such, the opportunity size from each of these.
properties is not very large. So they won't get reported in the normal course, but we are witnessing a bump up in the overall pipeline from the segment.
Sure, sure. And if I could just squeeze in one last question, sir. When do you see the turnaround of our consumer business happening in terms of its profitability? Thank you.
We are investing significantly in the business. And as we have been reporting over the last few quarters, whatever surplus that the business is being able to generate, we are deploying it back into the business in trying to ramp up the volumes to a much higher level than what it is currently. We have benefited from that during the year and the quarter under review. As you would see, the loan rates have gone up.
However, there is a lot of investment which happens before the final outcomes are visible in terms of the turnover and the bottom line. And hence, the breakeven has not happened. I do not want to give you a guidance today on when the breakeven will happen. The investments in ramping up this volume to a much more significant revenue will continue. We do hope that we would be able to start seeing the black in the bottom line soon. But as of today, I don't really want to give you a guidance on when exactly. I can confirm that we will see significant volume growth.
Our next question is from the line of Pratik Kothari from Unique PMS.
Sir, first question on Engineering part, the execution seems to be much slower than what we had anticipated or what we had may be planned for. So your thoughts -- what's happening there? What is causing this delay?
The Engineering segment, while it saw a good growth in terms of execution over the quarter, we did witness a significant shortfall compared to what we were expecting to happen. One of the significant contract was the [UP contract] where because of the collections, which are underway and the ramp-up towards the election, we did witness a slowdown there, and I would expect that during this Q1 of the current financial year also, we would be seeing continuing pressure because of the elections.
And in a while we anticipated a bit of slowdown, the slowdown was more than what we had anticipated. That's one of the significant drops in terms of the Engineering growth.
It's only time line deployment which has happened, right? Nothing else has seen in terms of contracts or term or...
No, it's only a time line.
Correct. And sir, second question, in the presentation, we have mentioned that we have won some significant orders in international market. Also, we are seeing some large orders in domestic. If you can just throw some light what kind of orders are there, what kind of customers -- how large is this international which we won -- some comment on orders, which we have won, and also the pipeline that we see in front of us.
We've been declaring this to the exchange, any significant order which comes in has been declared. And I'm just giving you a couple of examples. We've got significant orders from Saudi Arabia, which is for setting up a water treatment plant, including demineralization plant. This is roughly around INR 120 crores. The another one, which is coming in from UAE and that value is roughly in the range of INR 250 crores.
Correct. And we have mentioned this domestic order, some large domestic orders, which is in pipeline. Anything [Indiscernible].
There are significant orders under discussion. And we will, obviously, in the normal course make a declaration on the stock exchange as and when we get finalized.
Correct. And sir, last, we are seeing some sequential improvement in chemicals. So your thoughts, I mean, we saw some tough phase for the last 2 years. I mean, from a growth perspective, and we have obviously maintained margins. Just any change in terms of demand trends that you see out there?
Over the last couple of quarters, we have seen good growth in volume, as we disclosed during the first 2 quarters, the numbers from the international market was bit subdued. There has been a sequential pickup in the volumes from the international market and we anticipate this to continue over the coming quarters also. That's what has led to the recovery in the top line. The margins have remained stable.
And that's because of the continuing environment of stable prices. But we are seeing a bit of an impact over the last maybe few months of the prices in the Middle East, which has impacted costs to some extent, and also the shipping times have gone up. So to that extent, there is a little bit of an impact. Overall, we do see that the volumes in the business would continue to improve over the coming year. And margins also if all things remain equal in terms of the global environment, in terms of the raw material prices, we should be able to maintain the current level and round about these levels.
Next question is from the line of Rohit Shah from Ladderup Wealth Management.
My first question was on your Engineering segment margins. They have been kind for the last 2 years, you've kind of shown reducing margins in quarter 4 as well. What is the reason for that, if you can throw some light?
The Engineering margins have suffered during the current year in the quarter under review. We have seen some dip in the overall numbers and compared to what our expectations were. There has also been one specific contract where we have witnessed unforeseen cost increases. This is an industrial EPC job and that has impacted the overall volumes significantly.
So if you look at the consolidated numbers, there is also an impact which is coming as we have built up infrastructure in one of the subsidiaries to execute some of the large orders, and those revenues have not come through to the extent that we were hoping that they would, and therefore, on the consolidated level, you would see that there has been a cost impact, which we have taken. So these are the primary reasons for the Engineering margins having been shrunk, but we do anticipate 2 things.
Overall, the rest of the project margins remain healthy. This one contract where we have witnessed unforeseen price increases, we expect that drag to continue for maybe 1 or 2 quarters. And thereafter things should improve significantly. And margins would also improve because the overall volume of business that we are going to execute during the year would go up. On both of these accounts, we should see an improvement in the coming years.
Is there any relation between your receivables, which have also gone up and the slowdown in your Engineering segment that has happened.
Sorry, I couldn't get your question. Can you repeat, please?
My question was that your receivables have gone up from around 120 to 145 days. Is there any relation between the receivables going up and the slowdown that has happened in the Engineering segment?
No, it is not really related to the slowdown in the Engineering segment. Rather, it is more about majority of the fourth quarter billing has taken place in the month of March that has contributed to the overall increase in the receivable level as of the year-end.
What would be kind of like a normalized -- last year as well you said that lot of billing happened in March and then it traveled in the month of April and May, so what will be kind of like an normalized level that we can look at?
So I think similar to what we witnessed in the last year, I think we should have a normalized level as you approach the midyear at the half year level.
One last question, sir, out of your chemical segment growth that has happened year-on-year, how much is due to organic and how much is due to addition of April in the numbers?
April consolidation impact?
Yes. I'm asking for quarter 4, not for the full year.
On an overall basis for the quarter -- for the full year, the revenue impact of April is in the region of around INR 92 crores.
The next question is from the line of Rahul Dhruv from Pegasus Growth.
Sir, I had, I think kind of a derivative of what the earlier participant was asking. I think if you look at the last 2 years, we've had almost 50% increase in our revenues from Engineering, but the profits or what we call PBIT is basically almost flat, which means that we've been sacrificing margins incrementally on most of the projects. Now can you explain this in context of the fact that we used to be as much as 10% margins at one point in time? And what would be the outlook going forward? Will we ever go back to the 10% PBIT margins in Engineering?
We do expect to improve on this significantly. On a consol basis, we saw for the full year, roughly 7.7% margin. This -- and for FY '22, '23, this number was around 9.1. And we do expect that we will at least come back to that level. We will be happy to share more light as the year progresses, and we will see how the contracts panned out. But certainly, we should be improving from where we are.
So the 9.1% is something which you expect for FY '25 or over a period of time?
FY '24-'25 is what we are talking about.
Okay. The second thing was, again, what I think was very, very strong about the balance sheet of Ion Exchange at one point in time was the cash conversion cycle, which was almost -- if you add advances, then we're almost negative or was negative, but that has changed consistently over the last of 3 years. If I just look at inventory receivables and payables netted off, we have gone from 10 days to 74, every year increasing. Now I just wanted to know if there is a policy change over here? Or is this something that we are doing which is going to be structural? And are we going to continue to be having such a high -- not very high, but a high cash conversion cycle going forward.
I think in the -- if you're comparing with the year '21, '22 or before that, we had a large portion of the Sri Lanka [cost lag] where the advance was lying in the books and Sri Lanka contract value was $194 million. And advance was also disproportionately higher, 20% on that contract. So as that execution of the contract is almost at just finishing end, the advance from customer levels have come down from those high levels.
And as we are mentioning going forward, we expect that the working capital level is largely to be in line with what we have been experiencing at FY '23 in March and also what we are showing now at FY '24. We will have these kinds of levels of working capital because as the EPC segment invoicing and the share in the overall revenue increases, we will have this kind of working capital levels going forward.
The normalized level for -- for example, on receivable side is what you should see around midyear because the end of the year receivables are always at its peak. Most of the invoicing takes place for that last quarter in the month of March. So we just can fall in the balance sheet. You will see a more normalized level around [the midyear].
No, I agree, sir. I mean, in fact, I'm actually even tracking half yearly basis. Even on a half yearly basis, it has been consistently going up. So I'm just saying, is there a structural change in terms -- of course, there is an increased share of engineering and which may be contributing to it. But are we giving out better terms than before is what I want to know.
No. As Vasant just explained, there was a significant advance from customers, which was lying in our books, and that was for the Sri Lanka contract, which obviously the figure goes pretty large in context of the overall working capital levels. That led to the negative working capital. The more normalized level is what you would have seen roughly around the midyear mark.
The next question is from the line of Shyam Garg, from Ladderup Finance Limited.
My first question with respect to the execution time line of the order book in our Engineering business. So what is the expected execution timeline?
This should be roughly around a 2-year period for some of the significant contracts which have been declared on the exchange, we have also given execution time line at -- couple of the large international jobs have much shorter period of execution. But on an average, it would be fair to say roughly a 2-year period.
So looking at a 20% growth in our Engineering business year-on-year, in FY '25?
Yes, we should see a good growth and I am being cautious in giving out exact guidance at this point of time. As you can see that we are carrying a good order growth. And I would expect that the growth should be at least what we saw last year. And at this time, I would only want to give you a subdued projection of roughly around 15% to 20%.
The next question is from the line of Saket Kapoor from Kapoor & Co.
Firstly, in the Engineering segment, you articulated to the point of some cost overrun in one of the project, so was that understanding correct? And can you quantify what was the impact?
While we are not giving out project specific numbers, yes, you heard it right. There was one significant contract where we saw an unforeseen cost increase, and we had to, therefore, take that extra cost provision in our books. That has led to an adverse impact on the margins reported by the Engineering division.
But my reason for heartening was that then it will be a main [reversion] for us, at least on a ballpark margin trajectory. If we could have articulated the ballpark numbers in the absolute amount, then that would have been added back and we would have calculated our normalized margin for the quarter as a one-off event. And so this -- this project is domestic or in foreign land?
It's a domestic project.
Sir, you did mention about the UP part of the story also slowing down. And I think so in the -- in your presentation, you mentioned about INR 830 crores worth of contracts being left. And you also mentioned that first quarter will also be slow. So when are we expecting the UP project closure, sir?
We are expecting by the end of this financial year that contract should be executed, and we await the resumption of pace after the election process has been completed. As far as the overall numbers that we have been reporting on margin in the contract which we referred to for cost increase, it is -- we are not talking about the UP project. That's an industrial domestic project, but it's not the [indiscernible].
And sir, now coming to the Chemicals segment part. Firstly, Sir, about Mapril, you mentioned about INR 92 crores revenue contribution. So that gets clubbed under the consolidated Chemical segment?
Yes.
Okay. And what are the likely margins, sir, there?
You would see that on the consolidated level, the margins for the Chemical segment are lower than for the standalone level. So there is -- for Mapril margins are lower than what we have seen for the stand-alone.
Okay. And the utilization level for that unit, sir? What can we anticipate going ahead? And any CapEx that we are doing in their subsidiary to augment capacity?
Not immediately. That's all in the future.
Sir, coming to our greenfield projects. I think earlier we alluded to the point of going ahead. Any more color you can give? What kind of numbers are we looking for? And also in the capital work in progress or whether when we look at the cash flow part, the plant purchase or PPE, the property, plant and equipment has gone up to INR 120 crores for this year. So if you could just provide a breakup there, where have we attributed this increase?
Just coming to the total CapEx, what we have done for the current year, which is in the region of, as you mentioned, INR 115 crores, if you take into account all the elements of the capital expenditure and largely the CapEx is majorly into the Roha plant of what we are currently undertaking for our region expansion. That is one of the major element in the CapEx.
Apart from that, we have done our normal maintenance and CapEx in the Chemical segment for our existing facility. And also, we have announced our Engineering facilities in Hosur and Goa, so that also has contributed to the overall CapEx of around INR 115 crores.
Sir, broader number, can you share, sir, for how much was Roha or major -- in percentage terms?
Roha, I can share that for the year, the CapEx is around just over INR 50 crores for the year. And cumulatively, we have spent around INR 17 crores on the Roha capital expenditure.
And what will be the total sum should we expect? Sir, I'm just completing my question only. No further questions. I will join the queue. How much more is to be spent for the current year? And when will we see the commissioning of the facility?
We have mentioned in the earlier con call that we are expecting the commercialization in FY '25, '26 of this Roha facility. So I would expect that the major balance part of the CapEx should get spent out in the current year.
How much it is, sir? Can you give a number? I'll join the queue?
Yes. We have indicated earlier also the overall CapEx for the Roha is just under INR 400 crores.
So this year it will be INR 300 crore? Closer to INR 300 crore to be spent?
We can't be very definitive about that as of today, but it should be around about that number of INR 250 crores to INR 300 crores.
The next question is from the line of Jolyon Loo from Amiral Gestion PTE Limited.
Maybe just a follow-up on the previous participant's question on the working capital. Sir, you guys have alluded to a normalized level. Could you quantify that either in absolute terms or in terms of percentage of sales? That's my first question.
So what you're asking is working capital levels in absolute terms. Is that your question?
Yes, correct.
The total working capital in terms of days will be 99 days.
99 days for -- receivables?
Yes. The total receivables will be in the region of around 154 days. And this further details will be there in the presentation, which we have uploaded on the site in terms of the exact numbers of the working capital in terms of absolute numbers also.
No, actually, my question is more -- I mean the working capital is any better right now because of the billing cycle and is guided that you will be coming down somewhere in the middle of the year. So what is that normalized level that you have replied to the previous participant question. Is it the number of days? Or is it by absolute amount wise? Could you just clarify and quantify the working capital number.
So the normalized level, if I understood your question correctly, should be in the region of around 70 to 75 days.
INR 30 crore to INR 35 crore, yeah?
70 to 75 days of revenue.
The next question is from the line of Rohit Shah from Ladderup Wealth Management.
Since you already have given guidance on Engineering, can you also share what will be the growth for Chemical and Consumer [Indiscernible] for the segment for this year?
As we mentioned, even speaking of the Engineering segment, we do not want to give out a guidance at this stage, and we're just giving a directional view about the kind of growth that we should be witnessing. On the Chemical segment also we should be maintaining the momentum and the growth trajectory. And likewise for the consumer segment, as far as the gross profit numbers for the consumer segment is concerned, they remain at a very healthy level.
On the bottom line number, I specifically mentioned that I do not want to give -- spell out definitive figure because we are continuing to invest on the business for growing it further. And we will come back to you with more details on the bottom line, maybe sometime later during the year. As far as the Chemical segment is concerned, we should be seeing margins at similar levels as today, provided that we continue to witness stable prices and the overall dynamics on the geopolitical side do not alter significantly. It is also a function of the product mix that we see. And if as and when there is a significant change in that, there is also impact on the margin levels. But largely you can assume that it will be in a similar range, as it is today, given that all factors remain safe.
Okay. One last question is that can you share the number for the full year for advances from customers, including those unearned revenue from AMC as well.
The customer advance as of March end was around INR 180 crores and the unearned revenue was around INR 224 crores.
[Operator Instructions] The next question is from the line of Rahul Dhruv from Pegasus Growth.
Sir, I just wanted to again quickly go through the numbers on the order book as of last year, and as of March. And a little bit of color on how much of that is international, and how much of it is domestic, if you have a percentage?
International order book as of March '24 end is around 27%.
And the total book is you said, INR 1,450 crores?
No, it is INR 3,500 crores.
So INR 3,540 crores, okay. So 3 -- out of that 37% is foreign?
No. 27%.
27%, okay. That's all from my side.
The next question is from the line of Tushar Vasuja from Yogya Capital.
So my first question is on how do you plan to utilize your cash because you have somewhere or around INR 580 crores of cash. So how do you plan on utilizing it?
We have a significant CapEx fund as you would be hearing for the resin facility, which is coming up at Roha . And apart from that, there is significant portion of advances, which are very project specific, and we deploy for execution of the project. And almost 40% of the total cash in bank is held as margin money with banks for bank guarantees.
Okay, sir. And you mentioned the CapEx at Roha; you mentioned that it's somewhere around INR 400 crore total CapEx. How much of that [Technical Difficulty] for executing a higher quantum of projects and also participation in other projects. But the employee cost as a percentage of sales also and on a total absolute number has also gone up significantly, for year-on-year also. So what should be this number rationalizing once we start further execution, a higher pace of execution as a percentage of sales?
As a percentage of sales it will go down quite a bit, and that's the reason I mentioned that there is a bit of an overhang of the expenditure that we are making on infrastructure, including built up of manpower.
Once we see the project execution came back to the levels where we expect them to, the percentage will drop significantly. There's also a ramp-up in manpower for the consumer segment. Again, the numbers would become lower -- as a percentage would become lower, as the revenue scale up in that segment also.
But we will be expecting the run rate -- just to conclude only sir. But we will see the run rate of INR 80 crores, INR 81 crores, going ahead also?
Yes, that's right.
And lastly, on the promoter selling part also. I'll join the queue.
Next question is from the line of Suhas Naik from Creda Capital.
Sir, we are operating in one of the most exciting areas in the infrastructure side. So could you just let us know your paths that you are going ahead with in the next 2, 3 years, where do you see Ion Exchange actually in terms of scale of operations.
You have rightly pointed out that this is a very exciting area, and there's a lot of development, not just in India, but across the globe. What we are doing is building up our capabilities, both within the country and internationally. And that's one of the reasons why we saw the acquisition in Europe.
We are improving or increasing within other geographies also in order to invest -- capitalize on the opportunities. There are -- there is a different flavor to the opportunities in various geographies. And accordingly, the infrastructure is being built in each of the countries. We will see a significant portion of engineering opportunities in meeting not just from the government segment, but also substantially from the PSU and private sector, which is now becoming more aware and more conscious of the responsibility towards the environment, there is also a regulatory pressure to improve the industrial infrastructure to treat the water and the waste. Therefore, we do hope that we will be able to get a lot of others from the various parts or the various segments of the market, both the government, the PSU, as well as from the private sector. Again, both Indian and international...
So is it possible for you to quantify this number, actually, at least the visibility in terms of the next 1 year or 2 years, what size of opportunity are we talking about here?
What we would manage to grab out of this is a very difficult thing to...
Opportunity size I'm talking about. How much we will get is independent on that is separate? But at least what are we chasing in terms of orders, what size of orders we are likely to chase in the next couple of years? Some number in terms of market size here that we are addressing.
So if we exclude the municipal segment and also the purely similar construction-oriented jobs coming from the government, we would expect the market size in India to be in the range of around INR 20,000 to INR 25,000 crores per year. And if you look at the international market, this is many times over of this number. Of course, it's widely distributed amongst various geographies. Geographies which we focus on is the Middle East, the Southeast of Asia and the African region. This is where I feel a lot of the engineering opportunities will come for us. As far as the Chemical part of the business is concerned, it is across the globe from all [Indiscernible].
The next question is from the line of Tushar Vasuja from Yogya Capital.
I just had a few follow-up questions. When would the Roha facility be available for commercialization?
In FY '25-'26.
Okay. And how long would it take for you to ramp it up to optimal utilization levels?
We expect to fully utilize that facility over the next 3 to 4 years on the commercial production commence.
Okay, sir. And just one more question. I want to confirm. For the Roha capacity, for the Roha CapEx, 80% would be from internal accruals and 20% would be from debt. Is that correct?
No, 80% will be from debt.
The next question is from the line of Saket Kapoor from Kapoor & Company.
Sir, the closing question, sir. On the Consumer product, you did alluded to the fact that we have hired a new team, and we would be posting a better set of numbers here. Can you give some more color because for this year also, sir, our turnover has gone up, but so has the losses at the PBT level. So some understanding of how are we dealing with this situation in this space?
So the buildup of [land power] for the consumer segment, we have been trying to do over the last few years. And as I mentioned, we will continue to undertake this exercise because we are striving for much bigger numbers to come in from either segment. The losses that you see are not at a gross margin level. They are more a function of the manpower cost and the infrastructure cost that we are accounting for.
And these do not reflect only the current level of operation, but these are the -- for the planned level of operation, which is much, much higher than today. That's why you are seeing the bottom line in the red. As I mentioned, we do expect or we do hope that in times to come once we have scaled up the operation to a significant enough level. And our investment in the infrastructure has stabilized. We will see the bottom line turning significantly in the black.
As of today, I'm not trying to give you a projection of when exactly this is going to happen. I can only assure you that we will keep investing in future growth of the consumer segment. And we are seeing extremely good traction in the market for the products.
Okay. And for this year, sir? Can you allude what -- how much have we invested to this category? And going along with your line of thought, what should we expect in terms of the -- at least the revenue growth trajectory for this segment?
You would have seen that we have delivered roughly around 25% -- sorry, 31% growth for the current year. And we do expect that we would maintain momentum in a similar range of growth. As for investments is concerned, whatever losses that you have seen for this segment are effectively expenses, which we are gearing to augment our presence in the market, which is on manpower and infrastructure.
Right. Sir, you did not give any percentage number for the growth trajectory for the Engineering segment. But that kind of work we have been doing in the segment in terms of addition and creating the infrastructure, can you give us some trajectory of what should we look forward for the engineering?
And in the Chemical segment, my closing question is on the margin profile. We have seen a 200 basis point improvement in the stand-alone chemical segment. So are these margins sustainable? Or do we have any impact of lower raw material that got added to the margin for this year?
Engineering segment, as I have mentioned earlier, while I do not want to give you guidance, but we certainly expect growth to a reasonable extent. And given that we are carrying a very healthy order growth, 15% to 20% growth, we will certainly hope to achieve, if not more.
And as far as the chemical segment margins are concerned, we have benefited from a stable raw material pricing for the last few quarters. And we have also bought quickness any significant relations that can -- the exchange rates or significant negative impact because of the geopolitical scenario, which has remained as it is. This is what has helped us to maintain the margin levels. If we are going to see a stable environment in the future also, the margin levels are sustainable.
Thank you very much. Ladies and gentlemen that was the last question for today. I now hand the conference over to the management for closing comments.
Thank you all for participating in this earnings con call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, we will be happy to be of assistance. We are very thankful to all our investors who stood by us and also had confidence in the company's growth plan and focus. And with this, I wish everyone a great evening. Thank you.
Thank you. On behalf of Ion Exchange India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.