Clean Science & Tech shares fall 8% after Q1 results, stake sale plans weigh on sentiment

Clean Science slides on Q1 miss, lower guidance, and stake sale plans

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26 Aug, 2025 12:21

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Shares of Clean Science and Technology fell 8 percent to Rs 1,330 apiece on July 18 after the company reported its June quarter results and management shared commentary on a potential promoter stake sale.

For the June quarter, Clean Science’s revenue rose 8 percent year-on-year to Rs 240 crore, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew 5 percent over the same period to Rs 100 crore.

Margins for the quarter contracted by 100 basis points to 41.7 percent compared to 42.8 percent a year ago, while net profit increased by 6 percent year-on-year.

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Over 25 percent of the company’s revenue during the quarter came from newer product launches, and the management noted that the company also gained market share in this period.

However, the company revised its EBITDA growth guidance to 15–18 percent (down from the earlier 18–20 percent) citing softness in the first quarter of FY26 and global headwinds. Management said it expects a stronger ramp-up starting Q3FY26, with revenue acceleration in the second half of FY26 driven by new product launches, improved capacity utilisation, operating leverage, and market expansion.

The promoters of Clean Science, who currently hold a 74.97 percent stake in the company, are evaluating the sale of a minority stake as part of their family estate planning and management, the management shared during the earnings call.

Motilal Oswal reiterated its "neutral" rating on the stock, with a target price of Rs 1,350 per share. The brokerage cut its FY26 and FY27 estimates by 9 percent each, citing higher tax rates, but expects a revenue, EBITDA, and PAT CAGR of 23 percent, 23 percent, and 27 percent, respectively, over FY25–27.

Meanwhile, HDFC Securities maintained a "sell" rating with a target price of Rs 1,029 per share. The brokerage said it expects the return on equity (RoE) to remain around 20 percent and EPS to grow at an 18 percent CAGR between FY25 and FY29.

HDFC Securities noted that valuations remain high at 48x and 41x FY26 and FY27 estimated EPS, respectively. It added that Q1 EBITDA was 8 percent below its estimates, while PAT was 9 percent below expectations due to lower-than-expected revenue.

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