ICICI Securities's research report on Clean Science & Technology
Clean Science’s Q4FY24 EBITDA dipped 10% YoY to INR 945mn; EBITDA margin contracted 295bp QoQ at 41.5%. EBITDA margin delivery has been impressive, considering pricing environment remains unfavourable. Also, the company has seen a rise in mix from new products where margins are low. It had strong volume recovery QoQ in existing portfolio which it believes will continue to improve. Clean Science has started HALS supplies in domestic market, and cracked a few export contracts. Progressively, it has plans to roll-out four more HALS series products, and achieve sales volume of 3kte with EBITDA margin of 15% in FY25.
Outlook
We cut our FY25/26E EPS by 2-12% and reduce our target price to INR 1,350 (from INR 1,525) with an unchanged FY26E PE multiple to 35x. Maintain HOLD.
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