Motilal Oswal's research report on Clean Science and Technology
CLEAN’s R&D, focused on innovation and sustainability, achieved key milestones in FY24, including the commercialization of HALS series and the development of pharma intermediates. Currently, there are 10 new molecules in progress, which should drive future growth in the pharmaceuticals, polymers, and sustainable agrochemicals segments of the company. Clean Fino Chem (CFCL), a wholly owned subsidiary of CLEAN, is scaling up HALS production (current total capacity of 10.5ktpa) and expanding its capacity through Unit-4 and Unit-3 to meet rising global demand in pharmaceuticals, agrochemicals, and polymers. The new plastic application lab would further support HALS growth, while all future capex would happen in CFCL. During FY25-27, the company is expected to generate INR6b in FCF and plans to incur a capex of INR5.5b.
Outlook
The stock is currently trading at ~43x FY26E EPS of INR36 and ~32x FY26E EV/EBITDA. We value the stock at 40x Sep’26E EPS to arrive at our TP of INR1,580.
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