CLEANNSEMay 22, 2025

Clean Science and Technology Limited

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206turns

16analyst exchanges

3executives

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Management on call

Siddharth Sikchi

EXECUTIVE DIRECTOR AND PROMOTER, CLEAN SCIENCE AND TECHNOLOGY LIMITED

Sanjay Parnerkar

CFO, CLEAN SCIENCE AND TECHNOLOGY LIMITED

Pratik Bora

VICE PRESIDENT, CLEAN SCIENCE AND TECHNOLOGY LIMITED

Key numbers — 40 extracted

1.5 billion

ch are slated for commercialization in FY '26. The addressable market is set to increase by over $1.5 billion, underpinned by the commercialization of new products, which will position the company on a stron

4.5%

performance: Starting with Q-on-Q comparison: On sequential basis, revenues increased by modest 4.5% to Rs. 238 crores. EBITDA and PAT increased to Rs. 105 crores and Rs. 79 crores respectively, imp

Rs. 238 crore

nce: Starting with Q-on-Q comparison: On sequential basis, revenues increased by modest 4.5% to Rs. 238 crores. EBITDA and PAT increased to Rs. 105 crores and Rs. 79 crores respectively, implying an EBITDA m

Rs. 105 crore

equential basis, revenues increased by modest 4.5% to Rs. 238 crores. EBITDA and PAT increased to Rs. 105 crores and Rs. 79 crores respectively, implying an EBITDA margin of 43.8%. On a Y-o-Y basis, the sale

Rs. 79 crore

venues increased by modest 4.5% to Rs. 238 crores. EBITDA and PAT increased to Rs. 105 crores and Rs. 79 crores respectively, implying an EBITDA margin of 43.8%. On a Y-o-Y basis, the sales increased by 7%

43.8%

nd PAT increased to Rs. 105 crores and Rs. 79 crores respectively, implying an EBITDA margin of 43.8%. On a Y-o-Y basis, the sales increased by 7% during the quarter, and the revenue growth is C

ores respectively, implying an EBITDA margin of 43.8%. On a Y-o-Y basis, the sales increased by 7% during the quarter, and the revenue growth is Clean Science and Technology Limited May 22, 2

Rs. 256 crore

ease in sales volume. Let me highlight the consolidated financial performance: Company recorded Rs. 256 crore sales for Quarter 4, which is 14% higher on an annual basis and 8% higher on a sequential basis.

14%

consolidated financial performance: Company recorded Rs. 256 crore sales for Quarter 4, which is 14% higher on an annual basis and 8% higher on a sequential basis. The consolidated EBITDA is Rs. 105

Company recorded Rs. 256 crore sales for Quarter 4, which is 14% higher on an annual basis and 8% higher on a sequential basis. The consolidated EBITDA is Rs. 105 crore, implying 41% EBITDA margi

41%

ual basis and 8% higher on a sequential basis. The consolidated EBITDA is Rs. 105 crore, implying 41% EBITDA margin. Let me share highlights on the newer HALS segment performance: For the quarter

65%

r and blended realization is approximately 425 per kg while the RMC at portfolio level is around ~65%. For the full year FY ‘25, the HALS sales volume was roughly 1,900 ton, which gave us a sale of

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Guidance — 20 items

Starting with Q-on-Q comparison

opening

“Successful validation by key customers based in Middle East, Southeast Asia and Europe are lead indicators pointing to sales momentum acceleration going forward.”

On CAPEX cycle

opening

“CAPEX for performance chemical 2 has started and we expect the plant to commercialize by Q4 FY ‘26.”

Siddharth Sikchi

“And going forward in FY ‘26, our target is to touch 4,500 tons of sales.”

Ankur Periwal

“And our earlier target of full ramp up in HALS, so given the run rate, we are broadly looking at FY '27-'28 for that at the current capacity?”

Siddharth Sikchi

“Phase-2 will be far more pointed because we will not get into products which are lower margin accretive compared to the higher series.”

Ankur Periwal

“So, focus will be on the high margin products there.”

Ankur Periwal

“And just lastly on this, the breakup of 600 tons in '24, 2,000 tons in '25, what will be the export breakup here for both the years?”

Siddharth Sikchi

“Domestic is large, but going forward there will be more export coming into it.”

Arun

“So, what is the reasonable share that we can expect from the domestic market?”

Arun

“All right, so basically around another 300-400 tons we can hope to saturate in the domestic market.”

Q&A — 16 exchanges

Congratulations for a good set of numbers and thanks for the opportunity. First, on the HALS bit, so you mentioned revenues were largely flattish Q-o-Q. But at the same time, you know, seeing new product approvals coming in. So, I was just saying on the HALS bit, so while the quarterly revenues were flattish, there has been sort of new product approvals as you highlighted from multiple geographies. So, two questions. One, the distribution network tie-up that we had done earlier, how has been the progress there and are you satisfied with that? And secondly, from a ramp-up perspective, what time

Siddharth Sikchi

Perfect. So, with respect to the distribution setup model, we set up some distributors over the last two quarters. However, out of some of those distributors, we realized that some of them are not effective as we had expected. So, in those geographies, we are re-looking and re-finding some of the distributors. So, this is part of the business cycle. So, you appoint few distributors, but you realize at a later date that they are not as effective as you would have wanted them. They were also keen to partner, but eventually for whatever reason, for resource problem, they also decided that maybe t

Good evening, Siddharth. Hopefully, it's clear. So, when we said the majority of the 2,000, 1,900 tons volume that we sold is in domestic, and does it mean that we have largely saturated the domestic demand and from here…?

Siddharth Sikchi

Not really. We have still got I think only 50% of the domestic market. There is still 50% domestic market left. Of course, we are not envisaging that we will get all the domestic market. But there is still quite a bit of room to capture in the domestic market itself. So, what is the reasonable share that we can expect from the domestic market? 65% odd. All right, so basically around another 300-400 tons we can hope to saturate in the domestic market. Easily. And of course, that also grows at a certain rate. Yes, that is also growing at a certain rate, yes, absolutely. And specifically on Q4, w

Good afternoon. Thank you so much for taking my questions. First one, just a clarification on the opening remark regarding the expansion of the addressable market by $1.5 billion that you alluded to earlier on. This is exclusive of HALS, right? Just to understand.

Siddharth Sikchi

No, no. Inclusive of HALS and inclusive of the performance chemicals which are about to commercialize in this financial year. Both of them including. Inclusive of both of them. So, this is the total global addressable market. Yes. Total what we… HALS is about... $1 billion. HALS are about a billion. $1 billion out of that, right? Okay. Yes, closer to that. For HALS, the average realization of Rs. 425 that we are making at this point, should we expect that to improve significantly in the next couple of years as the business ramps us? Yes, 100%. Of course, it has to improve because the higher ra

Hi, thanks for the opportunity. A few clarification. On the R&D side, if you can share how much we have spent in this financial year on R&D? The recurring...

Siddharth Sikchi

Rs. 5.5 crores. Rs. 5.5 crores. And we have roughly 90 staffs in R&D, right? Yes, sir. Rs. 5.5 crores, this entire is recurring expenditure, right? So, around Rs. 3.5 crores is the revenue expenditure and balance is capital expenditure, which is one time. Clean Science and Technology Limited May 22, 2025 So with this, the rough calculation suggests roughly Rs. 4-4.5 lakh average cost per staff in R&D. Is this the industry standard? Because if we look at the other companies, like SRF, PI, even at very large scale, their R&D cost per staff is substantially higher versus our number. How should we

Hi, sir, thank you so much for the opportunity. Sir, wanted to get more understanding about which type of HALS we are looking to push in domestic market apart from HALS 770.

Siddharth Sikchi

All, 622, 944, 119, 783, all of them have domestic market as well, right?

Sir, on the HALS front, we have said that we have touched about 2,000 metric tons and domestic demand will be about 2,500 metric tons. So, which and all are the key markets for exports that we are looking at? And in terms of competition, how is the strategy placed for the sales? Clean Science and Technology Limited May 22, 2025

Siddharth Sikchi

So Europe, U.S., Middle East, South Africa. So, these are some of the markets which we are aggressively getting into apart from India, of course. India is a home ground. Yes. And there in terms of competition, what are we looking at? Because I think the competitor would already be present there. So, from the offering perspective. Price advantage. That’s the advantage which we have. Price advantage, non-Europe, non-Chinese. The second question is, now next year, you alluded that we are expecting about Rs. 210 crores from HALS. What is the kind of EBITDA margins that we are looking at? And in FY

Congrats on good set of numbers and breaking even in the subsidiary. Just a couple of points from my side. First, have you started the production of Barbituric acid?

Siddharth Sikchi

We will start by August. Month of August. And on the BHT, have you seen any contribution or not yet? We have already sold some quantities in the U.S., and you will see progressively the volumes are increasing over the next few quarters. That’s great. And coming to HALS, so I wanted to understand at this point of time which grade do you think could go in Phase-2? Sorry, go again? I am just saying at this point of time in the HALS, which grades do you think you could go for expansion in Phase-2? It could be the higher one like 944, 119 and the newer ones which we are trying to make which are 202

Hi, Siddharth and Pratik. Good evening. Congrats on the good set of numbers. Most of my questions are asked, but a couple of them is one, could you give a split between, you know, size and volume growth in FY ‘25?

Pratik Bora

So, around 25% was the volume impact and lower realization offsetted that impact by around 8%. So, that's how you see around 17% growth in the sales for full year FY ‘25. And I just wanted to reconfirm that for the three new products which is DHDT, DHT and Barbituric acid, we haven't had any significant contribution in FY ‘25. Am I correct? Barbituric acid is in Clean Science which we expect to start in August. BHT is a small contribution this quarter. And DHDT, as I mentioned, we still are facing some teething issues in the facility. So, hopefully in the next couple of weeks, we expect the pl

Hi, sir. Congratulations on the good set of numbers. I have two questions. The first question is, why has COGS gone up this quarter?

Pratik Bora

Hi. So, the reason is the product mix that has led to a higher RMC as a percentage of sales during this quarter. So, if you note, there has been a meaningful growth in pharma segment, where the margin contribution is lower than the performance segment. So, that has led to a slight increase in the RMC as a percentage of sales. And the second question is, what are the key cost items that are driving up the other expenses? And are these cost items recurring? Actually, if you see sequentially, it's CSR expense, which has led to a higher other expense. That is the only item which has led to an incr

Thanks for the follow-up. For FY ‘26, given that the two performance chemical projects will be capitalized, what is the overall CAPEX number that we are looking at?

Siddharth Sikchi

Rs. 300 crores overall. And for FY ‘26, Rs. 300 crores. And beyond that, we don't have currently any projects which are slated for FY ‘27 as of now. No, no, no. We have. But we will announce once, let these two big products come online, and then we will announce the subsequent CAPEXs. I mean to say no announcement as of now. Sorry? No announcement as of now. No, no announcement. And generally from announcement to the actual commissioning takes about 12. 10 months.

So, thanks for taking my question. Just wanted to understand. So, before we started HALS, I mean, we used to clock in margins of around 43%, 44%. Okay. Now I understand with the new HALS and all, our margins have taken a slight dip, which is in line with our strategy. But now coming from 42%, 43% of 40%, is that a fair enough, I mean, going ahead 40% should be maintained. I was just under the impression that when you start HALS, you are probably targeting margins of 15% to 25%. So, I actually expected a sharper margin drop on a consol level. But seems like we are doing better than expected. So

Pratik Bora

So, Jason, we have never alluded to any sharp dilution in the margin at Company level. We have always maintained that EBITDA margin could remain in that narrow range of 38 to 42, plus minus 1% or 2% to 40%. And as these new performance chemical and pharma intermediates product scale up, we expect margins to improve. Because these are more margin accretive compared to HALS. HALS is important from a point of view it will give us a scale benefit. The TAM of HALS is the largest. So, the ramp up is, I mean each block can give equivalent of Rs. 500 crores revenue. Whereas the other product TAM are s

So, firstly, I wanted to understand what your outlook is for BHA and TBHQ from a global standpoint. And secondly, are you evaluating customized antioxidant blends for, let's say, some peak lines basically forward integrating into antioxidants? And if so, what is generally a margin profile under these blends?

Siddharth Sikchi

No, we are not getting into blends. That's what our customers do. We don't like getting into our customers' shoe. And what is your outlook on TBHQ and BHA? So TBHQ is a decent, I mean, both the products are decent products. I mean, they are growing at about 4%-5% industry standard. TBHQ is an edible oil business. So, as edible oil production increases, TBHQ consumption increases. BHA is more about pet food consumption. So, as that increases, BHA increases. BHA plus BHT go hand in hand. So, yes, there is a decent and good outlook for both the products. Both have different avenues, different mar

A quick question, sir. Can you talk on the CAPEX for this year as well as for FY ‘27?

Siddharth Sikchi

So, this year, CAPEX, we just mentioned two performance chemicals, one starting in August, one starting in February. FY '27, we will announce it probably six months later. No, so, in terms of amount for this year would be Rs. 150 crores? Rs. 300 crores. Rs. 300 crores. Okay. And so, all together, this year CAPEX plus FY '24 and FY '26. So, why can we reach, let’s say, the infection point and all the products start kicking in and the growth kind of shoots off? Clean Science and Technology Limited May 22, 2025 See, all put together is what you are asking us? Yes, all put together where we can kn

Thanks for taking my question again. I just wanted to know, sir, a lot of some time back, MEHQ, we were seeing some weakness and demand for MEHQ. Of course, realizations were down. I believe they are still kind of soft and we have more of volume driven. Now, just wanted to understand, are there any tailwinds for MEHQ to grow ahead in conjunction to more consumption of acrylic acid, any tailwinds you see from that perspective? And again sometime back going we had, yes.

Siddharth Sikchi

So, we are growing in volumes. Opening remarks mentioned that our volumes have been the highest in the history of the company. Prices are near lower levels. That is why you are seeing these numbers. But in terms of growth, I think for MEHQ volumes it should be around 4% to 5% on a year-on-year basis. Yes, and previously again in some few calls back we had alluded to those issues around Guaiacol due to the cough syrups and etc. Have those been... All resolved. That's all been ironed out, right? All resolved. All resolved. Okay, great. Those are all my questions. Clean Science and Technology Lim

Thank you for taking my follow-up question. So, I just wanted to get sense of the two performance chemical which will be commercialized in FY '26. So, what's the asset turn we are expecting? And I think in FY '26 there won't be any significant revenue contribution. So, in FY '27, how are we looking at the contribution from these two performance chemicals?

Siddharth Sikchi

I think we will talk about these performance chemicals closer to the date. So, we will take one product at a time. So, I think the first one, as I said, is going to start in August. So, in the next con call, we will talk a little bit more on the products.

So, thank you so much all of you for your time to attend this con call and understanding more about the company. I think with this, I close the meeting. Thank you all and have a great week ahead.

Management

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Speaking time

Siddharth Sikchi

Moderator

Pratik Bora

Rohit Nagraj

Arun

Abhijit Akella

Ankur Periwal

Krishan Parwani

Naushad Chaudhary

Jason Soans

Opening remarks

Siddharth Sikchi

Thank you so much. Good evening, everyone. I am extremely happy to connect with you all to discuss the business performance for the company for Quarter 4 FY '25. So, let me first start with the business performance. FY ‘25 has been a milestone year in the company's history with extensive business transformation. Let me share key highlights: #1. The company recorded the highest sales volume across its key products #2. Led by superior R&D capabilities, the company developed the highest number of products during the financial year. These include the entire HALS series, DHDT, which is a pharma intermediate and BHT, along with two new products in the performance chemical segment, which are slated for commercialization in FY '26. The addressable market is set to increase by over $1.5 billion, underpinned by the commercialization of new products, which will position the company on a strong growth runway in the coming years. #3. The company developed an entirely new value chain and complex che

Starting with Q-on-Q comparison

On sequential basis, revenues increased by modest 4.5% to Rs. 238 crores. EBITDA and PAT increased to Rs. 105 crores and Rs. 79 crores respectively, implying an EBITDA margin of 43.8%. On a Y-o-Y basis, the sales increased by 7% during the quarter, and the revenue growth is Clean Science and Technology Limited May 22, 2025 primarily led by increase in sales volume. Let me highlight the consolidated financial performance: Company recorded Rs. 256 crore sales for Quarter 4, which is 14% higher on an annual basis and 8% higher on a sequential basis. The consolidated EBITDA is Rs. 105 crore, implying 41% EBITDA margin. Let me share highlights on the newer HALS segment performance: For the quarter, HALS sales value is broadly in line with the last quarter and blended realization is approximately 425 per kg while the RMC at portfolio level is around ~65%. For the full year FY ‘25, the HALS sales volume was roughly 1,900 ton, which gave us a sale of roughly Rs. 80 crores. Successful validatio

Sales profile

The revenue contribution from performance segment, pharma and agro segment and FMCG segment remain at 69%, 19% and 12% respectively. During the quarter, performance chemical sector has been the key revenue driver followed by pharma and agro segment.

On CAPEX cycle

Clean Science invested Rs. 215 crores during FY ‘25 in our subsidiary Clean Fino-Chem. Construction for the new performance chemical product, which is expected to commercialize by Q3 FY ‘26 is on track. CAPEX for performance chemical 2 has started and we expect the plant to commercialize by Q4 FY ‘26.

On ESG

We are pleased to report that the Board has recommended final dividend of Rs. 4 per share. Total payout ratio is higher at 22% for FY ‘25 compared to the previous year. Led by strong focus towards cash conversion, the cash balance continues to be meaningful at Rs. 400 crores despite increased payout ratio and sizable CAPEX in the new subsidiary. With this, I conclude my opening remarks and look forward to the Q&A session. Thank you so much.

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