Hold Clean Science and Technology; target of Rs 1516: Prabhudas Lilladher

Prabhudas Lilladher's research report on Clean Science and Technology

Clean Science and Technology (CLEAN) reported a revenue of Rs2.2bn (+19.1% YoY, -1.5% QoQ) in Q1FY25. YoY growth was driven by increased volume across all segments. The company does not expect an increase in realization for the next 2-3 quarters. HALS monthly sales are at ~120mt; the plant is operating at less than 20% utilization. The management expects this to reach 200mt by the year end. Three new HALS products were commercialized in Jul’24, with the fourth expected in Aug’24. On the capex front, two new projects have been announced for the Performance Chemical segment, with a total investment of Rs3bn. The pharma intermediate plant is on track and is expected to be commercialized in Q3FY25. New products such as DCC and TBHQ are progressing well, with new clients being onboarded.

Outlook

The company maintains a unique position with niche offerings, sustaining an EBITDM of 42%, supported by new products. Currently, CLEAN trades at 46x FY26 EPS and appears richly valued. We maintain a ‘Hold’ rating with a target price of Rs1,516, valuing the company at 45x FY26 EPS.