CLEAN - Clean Science

📊 NSE: CLEAN 🏢 Chemicals 📅 Last Updated: 12/13/2025 21:06

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 16.8% to INR 922.3 Cr in FY25 from INR 789.4 Cr in FY24. By H1 FY26, Performance Chemicals increased its share to 75% (up from 70% in H1 FY25), Pharma & Agro Intermediates contributed 16% (down from 17%), and FMCG Chemicals contributed 9% (down from 13%).

Geographic Revenue Split

As of H1 FY26, the revenue split is: China 38% (up from 36% YoY), Americas 20% (down from 21%), India 19% (up from 17%), Europe 14% (down from 16%), and Rest of World 9% (down from 10%).

Profitability Margins

Net Profit Margin improved to 32.3% in FY25 from 31.8% in FY24, driven by higher sales volumes. Gross margins in the subsidiary are targeted at 35-40%, though they fluctuated to 26% in Q2 FY26 due to inventory accounting (change in stock optics).

EBITDA Margin

EBITDA margin stood at 44% in FY25 (INR 399.1 Cr), a slight increase from 43.4% in FY24 (INR 337.2 Cr). The margin is supported by integrated operations but faces pressure from the ramp-up of new products and raw material volatility.

Capital Expenditure

The company incurred INR 235 Cr capex in FY24 (including INR 215 Cr in subsidiaries). Planned capex for FY26 is approximately INR 300 Cr, focused on the performance chemicals segment and funded entirely through internal accruals and surplus liquidity.

Credit Rating & Borrowing

CRISIL AA-/Stable for long-term and CRISIL A1+ for short-term. The company is debt-free with no long-term borrowing costs; interest coverage ratio improved to 493x in FY25 from 282x in FY24.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Phenol (used to produce Anisole, MEHQ, and BHA) and various crude oil derivatives. Raw material expenses accounted for 40.1% of revenue in Q2 FY26 on a consolidated basis.

Import Sources

Not explicitly disclosed by country, but the company utilizes a mix of local and foreign currency transactions to manage its 60-65% export exposure.

Capacity Expansion

Unit 4, a 34-acre (1,32,700 sq. mtrs) facility for HALS, was commercialized in March 2024. Future expansion includes a INR 300 Cr investment in performance chemicals for FY26.

Raw Material Costs

Raw material expenses were INR 325.8 Cr in FY25, representing 35.3% of total revenue. Costs are sensitive to crude oil fluctuations, with a pass-through mechanism that operates with a time lag.

Manufacturing Efficiency

Efficiency is driven by 'Clean Technology' and integrated operations where Phenol is converted into multiple value-added products like MEHQ and BHA, maintaining operating margins above 40%.

Logistics & Distribution

The company uses a hybrid model of direct sales to large accounts and a distributor network for broader market reach in India and international markets.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth is targeted through the ramp-up of the HALS (Hindered Amine Light Stabilizers) series (770, 944, 119), adding new chemistries and process technologies, and executing greenfield capex (INR 300 Cr in FY26) to diversify the performance chemicals basket.

Products & Services

Specialty chemicals including Monomethyl Ether of Hydroquinone (MEHQ), Guaiacol, Butylated Hydroxyanisole (BHA), 4-Methoxy Acetophenone (4-MAP), and HALS series (770, 944, 119).

Brand Portfolio

Clean Science and Technology Limited (CSTL), Clean Fino Chem Ltd (Subsidiary).

New Products/Services

Recent launches include higher grades of HALS (944 and 119) which offer better realizations and contributed to a 34% value growth in the HALS portfolio in recent quarters.

Market Expansion

Expansion is focused on increasing direct sales to large global accounts and diversifying the product basket to reduce dependence on core products like MEHQ.

Market Share & Ranking

CSTL is a leading global player in MEHQ, Guaiacol, BHA, and 4-MAP.

Strategic Alliances

Collaborations with academic institutions and industry experts are used to enhance technological capabilities and prevent obsolescence.

🌍 External Factors

Industry Trends

The specialty chemicals industry is shifting toward 'clean' and sustainable manufacturing. CSTL is positioned as a leader in catalytic chemistry, which reduces waste and improves cost-efficiency compared to traditional methods.

Competitive Landscape

Operates in a highly competitive industry requiring constant technological upgrades. Competitors are not named, but CSTL focuses on niche products where it can maintain a dominant global position.

Competitive Moat

Moat is built on proprietary catalytic processes and integrated manufacturing (Phenol to BHA), which are difficult to replicate and provide a significant cost advantage. This is sustained by continuous R&D and a debt-free balance sheet.

Macro Economic Sensitivity

Highly sensitive to global crude oil prices and international trade policies, as 60-65% of revenue is derived from exports.

Consumer Behavior

Increased demand for stabilizers in polymer and plastic industries is driving the growth of the HALS segment.

Geopolitical Risks

Exposure to 35+ countries makes CSTL vulnerable to trade barriers and geopolitical shifts, specifically mentioned is the monitorable impact of US tariff hikes.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental pollution norms and international manufacturing standards for specialty chemicals used in pharma and food (BHA).

Environmental Compliance

The company focuses on 'Clean Technology' to ensure regulatory compliance and operational efficiency, though specific ESG spend in INR is not disclosed.

Taxation Policy Impact

Tax expenses for FY25 were INR 98.2 Cr. The subsidiary Clean Fino Chem Ltd benefits from tax incentives related to its location in the Kurkumbh Industrial Area.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (crude derivatives) and sharp fluctuations in foreign exchange rates could impact margins by more than 5% if pass-throughs are delayed.