Hold Clean Science and Technology; target of Rs 1206: Prabhudas Lilladher

Prabhudas Lilladher's research report on Clean Science and Technology

Clean Science & Technology (CLEAN) reported 20%YoY/13%QoQ revenue decline to Rs 1.8b during the quarter, due to weak demand scenario across performance chemicals and pharma/agro segments. In the performance segment, two-third of the decline was due to volume while rest from lower price realization. While we remain positive on long term growth prospects given near-term demand headwinds, we expect EPS decline from Rs27.8 in FY23 to Rs22.9 in FY24 before recovering to Rs25.1 in FY25. We also remain apprehensive on margins as most raw materials are crude derivatives that may rise along with crude oil prices.

Outlook

The company is trading at 51.7x FY25 EPS. We recommend ‘Hold’ rating on the stock with TP of Rs1,206 valuing at 48x FY25 EPS.