Clean Science & Technology Ltd. share price target

Clean Science (CLEAN)’s reported EBITDA in 2QFY25 was below our estimate at INR897m (+20% YoY), with a gross margin of 62.4% (vs. 65.9% in 2QFY24).

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.

CLEAN’s reported EBITDA in 1QFY25 was below our estimate at INR947m (+24% YoY), with a gross margin of 65.4%.

Clean Science’s Q4FY24 EBITDA dipped 10% YoY to INR 945mn; EBITDA margin contracted 295bp QoQ at 41.5%. EBITDA margin delivery has been impressive, considering pricing environment remains unfavourable.

Clean Science and Technology’s (Clean Science) Q3FY23 EBITDA margin at 45.6% was up 620bps QoQ as the company benefited from lower raw material prices, while it has not reduced realisation for key products, including MEHQ.

Clean Science and Technology’s (Clean Science) Q2FY23 EBITDA margin at 39.4%
was up only 40bps QoQ despite softening raw material costs due to drop in PBQ
prices.

Clean Science (CLEAN) reported a beat on our revenue, however sharp rise in raw materials resulted in gross margin collapsing to 65% vs. our expectation of 70%. Despite higher absolute gross margin, higher operating expenditure led to in-line EBITDA (margin at 42.1% v/s 49.8% in 3QFY21 and 44.9% in 2QFY22). The Pharma and FMCG Chemicals segment performed better while the Performance Chemicals segment saw weak performance in the quarter....

Sarfraz Bhimani, CFA - Research Analyst (Sarfraz.Bhimani@MotilalOswal.com) Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P; Capital....