Reduce Clean Science and Technology; target of Rs 1330: ICICI Securities

ICICI Securities research report on Clean Science and Technology

Clean Science’s (CST) EBITDA grew only 5.5% YoY despite tailwinds of lower input prices, and HALS offtake. Its established products revenue has grown 8% YoY, while lower sales were due to weak demand for new products. HALS’ volumes were at 580te in Q1FY26 – far behind HALS’ FY26 guidance of 4kte; however, CST is now planning more complex series with over 2x realisation in HALS. The company is also in the process of ramping up/commissioning DHDT, BHT, barbituric acid and two performance products, which are expected to accelerate revenue growth.

Outlook

We cut our FY26–27E EPS by 2–3% and change our TP to INR 1,330 (vs. INR 1,360) with a FY27E P/E multiple of 35x (unchanged). Downgrade to REDUCE (from Hold). Promoter has announced a sizeable 24% reduction in its equity stake, which would bring their holding to 51% from the current 75%.