CLEANNSEQ1 FY25-26July 17, 2025

Clean Science and Technology Limited

4,835words
130turns
10analyst exchanges
3executives
Management on call
Siddharth Sikchi
PROMOTER AND
Sanjay Parnerkar
CHIEF FINANCIAL
Pratik Bora
VICE PRESIDENT – CLEAN SCIENCE AND TECHNOLOGY LIMITED
Key numbers — 40 extracted
9%
nancial performance. Starting with Q-on-Q comparison. On a sequential basis, revenue decreased by 9% to INR217 crores. EBITDA and PAT were INR101 crores and INR77 crores, respectively. We are very p
INR217 crore
l performance. Starting with Q-on-Q comparison. On a sequential basis, revenue decreased by 9% to INR217 crores. EBITDA and PAT were INR101 crores and INR77 crores, respectively. We are very pleased to report
INR101 crore
comparison. On a sequential basis, revenue decreased by 9% to INR217 crores. EBITDA and PAT were INR101 crores and INR77 crores, respectively. We are very pleased to report record high EBITDA margin of over
INR77 crore
sequential basis, revenue decreased by 9% to INR217 crores. EBITDA and PAT were INR101 crores and INR77 crores, respectively. We are very pleased to report record high EBITDA margin of over 46% since our lis
46%
s and INR77 crores, respectively. We are very pleased to report record high EBITDA margin of over 46% since our listing. Coming to year-on-year comparison, the sales were steady for the quarter. Favo
5%
hat the sales momentum in established products have remained intact. In fact, they have witnessed 5% sequential and 8% an annual growth, which is primarily volume-led. Sales mix is highly favorabl
8%
ntum in established products have remained intact. In fact, they have witnessed 5% sequential and 8% an annual growth, which is primarily volume-led. Sales mix is highly favorable during the quart
83%
ble during the quarter with established products contributing highest to the stand-alone sales at 83%, as against 75% during quarter 4, and 80% during Q1 last year. On account of this favorable produ
75%
uarter with established products contributing highest to the stand-alone sales at 83%, as against 75% during quarter 4, and 80% during Q1 last year. On account of this favorable product mix, the RMC
80%
oducts contributing highest to the stand-alone sales at 83%, as against 75% during quarter 4, and 80% during Q1 last year. On account of this favorable product mix, the RMC has significantly improved
13%
ing Q1 last year. On account of this favorable product mix, the RMC has significantly improved by 13% sequentially and 4% annually. While non-established products have seen slower momentum due to s
4%
account of this favorable product mix, the RMC has significantly improved by 13% sequentially and 4% annually. While non-established products have seen slower momentum due to softer demand, more imp
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Guidance — 20 items
Siddharth Sikchi
opening
“As we have mentioned in the past, HALS business will be EBITDA breakeven at monthly run rate sales of INR10 crores.”
Siddharth Sikchi
opening
“We are pleased to announce that over the next 2 quarters, we plan to commercialize more advanced grade of HALS priced in the range of $11 to $35 per kg.”
Siddharth Sikchi
opening
“Capex for Performance Chemicals 2 is underway, and we expect the plant to commercialize by Q4 FY '26.”
Siddharth Sikchi
opening
“These newer launches give us visibility in terms of revenue acceleration going forward.”
Rehan Saiyyed
qa
“Are you seeing any offtake momentum towards INR210 crore target for FY '26 that we have put in the last con call?”
Rehan Saiyyed
qa
“Are we seeing any offtake momentum towards the INR210 crore target for FY '26 that we have got in last quarter?”
Rehan Saiyyed
qa
“And sir, regarding the capex guidance that you have given in the last quarter in FY '26.”
Sanjesh Jain
qa
“Can you now know that we have started water trial and all, can you throw more light on the -- this product 1, we are now going to expect, say, the end of next quarter?”
Siddharth Sikchi
qa
“In the next quarter concall, you will have all the details.”
Jason Soans
qa
“So the volume target was probably 4,500 tons and now sales of INR210 crores, which we are targeting for FY '26.”
Risks & concerns — 3 flagged
Because if I see it's solvay’s, they have talked about slowdown in phenol and phenol derivative globally, the demand is coming down.
— Sanjesh Jain
Particularly pharma, I see there is a 29% sequential decline this quarter.
— Sanjesh Jain
Anything which has gone wrong there or it is this glycol which is still continuing to be very volatile?
— Sanjesh Jain
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Q&A — 10 exchanges
Q
So I have a couple of questions. First on, sir, could you please what is the capacity utilization across the categories like MEHQ, Guaiacol, Palmitate.
Pratik Bora
We would like to mention capacity utilization across segments rather than products. So Performance and FMCG are in the range of 75-odd percent. Pharma is around 68%. And HALS is around 22% for the quarter gone by. Okay. Another question, sir, is regarding the HALS 944 and 783 performance. Are you seeing any offtake momentum towards INR210 crore target for FY '26 that we have put in the last con call? Sorry, we couldn't follow you. Your voice was muffled. If you could repeat the question. Sir, I'm asking how are the HALS 944, 783 performing? Are we seeing any offtake momentum towards the INR210
Q
A few questions I have. So first, starting with the standalone. I think phenol prices have fallen 8%, and we are largely growing by volume that implies that even the lower raw material benefit is benefiting us on the margin side. Will that be a fair assumption?
Pratik Bora
No, no, Sanjesh. So actually, for the quarter, our consumption prices have for the phenol specifically have remained in line with the last quarter on a sequential basis.... No, no Y-o-Y? Yes. On Y-o-Y basis, you're right. On Y-o-Y basis, we have got some benefit there. Okay. The second thing you have said that... Louder Sanjesh. Can you hear me now? Now better. Okay. Sorry. What has gone with the non-established product? When we say non-established product in the standalone, what exactly are we referring to the products? So these are products like DCC, TBHQ, vereitraol, corbil palmitate. So he
Q
Thank you so much sir for taking my question. Sir, just wanted to know, last call we had a very sanguine road map for HALS for FY '26 and targets beyond that also. So the volume target was probably 4,500 tons and now sales of INR210 crores, which we are targeting for FY '26. Just wanted to know, sir, with the run rate in Q1, are we still maintaining that or just some color on that? How do you see that shaping up?
Siddharth Sikchi
So we are trying to maintain that number. In fact, by the newer HALS, which we are trying to introduce, which are more expensive and which we feel will be able to help us to complete the number which we have stated in the last call. So as of now, we are holding to that statement. Sure. Sir, possible to give with the volume and the sales this quarter for HALS? This quarter the sales is close to INR24 crores in terms of value. And in terms of volume, it's close to 580 tons. Okay. Thanks for that, sir. And sir, I just wanted to understand also one more thing. I mean, sir, in terms of competition,
Q
Thanks for the opportunity. Sir, first question is you mentioned just now in your earlier remarks as well that we will be going into the premium HALS. So in terms of the market, in terms of the customer, will it be a similar set of customers or we will have to scout for new set of customers? So how are we looking at from the marketing and scale-up perspective?
Siddharth Sikchi
Similar customer base. Okay. In fact, by introducing these higher version of HALS, we are trying -- the customer is getting that confidence that we are equivalent to any other European player who has the entire basket to offer. Thus, it is helping us so that -- I mean, when we are supplying these -- I mean, these higher grades, so the regular grades, I mean, they will increase that wallet share with us. Right. Got it. That's helpful. Second question, in terms of -- I mean, we've been hearing that Q4, there were generally frontloading in the US. And subsequently, there has been some impact in t
Q
First question on the pricing trend across all the products, the core one as well as HALS side. Any changes that you're seeing from last quarter versus this quarter?
Siddharth Sikchi
Not during the quarter, but if the raw material prices correct in the future, then yes, we might have to reduce the finished product price, which is a very general trend. Sure. And even in that scenario, the percentage gross margins that we have been guiding for will largely stay intact there because it's a price... Yes, it's more or less. Yes, more or less. Sure. Second thing on the new product launches, the Performance Chemicals 1 and 2. One, you mentioned that samples have already started going on. How has been the feedback? Is there any sort of teething trouble that one can think of there,
Q
Yes. So Siddharth, if you could please share some insights into this communication from the promoter and promoter group regarding the intent to significantly reduce the stake, it seems. So if you could please just help us understand the exact plans out here? Thank you.
Siddharth Sikchi
So the basic plan is some fraction of the Boob family are exiting part of their equity. I am not selling a single share, and the business will remain as usual. And I think -- I mean, anything more or I think this is what it is. So at present, the total promoter stake is 75%, and we intend to keep it above 50%. So up to 25% -- up to 25% is...? 24-ish. And -- okay. This is -- I mean, entirely to do with estate planning purposes basically. Absolutely, absolutely. From the Boob family. Okay. The second thing I just had was on the 18% to 20% EBITDA growth guidance that we had sort of communicated l
Q
So the first question is on the two grades that you spoke on the HALS. This is something that we have done recently, or this was always in the plans. How should we look at it?
Siddharth Sikchi
So out of two, one was already in the pipeline, we always wanted to do. The other one, which we are trying to start in Q3 is something which we learned is very critical, and there are -- it's a single source product for the customers. So I think we developed the process, we developed the tech. We made a pilot sample, submitted to the customers, got approval. And I think this is something we should do on priority because it will help us increase our margin and that product is itself about $30, $35 a kg. Okay. So one grade you mentioned that 2020. What is other grades mean? Can you just number i
Q
Actually, just a clarification. I just wanted to know that at a run rate of INR10 crores for HALS, there's a breakeven. That's what you mentioned. Is that correct?
Siddharth Sikchi
Absolutely. Just to clarify, we just not have any -- I mean, if we attain a revenue of INR10 crores, we will do a breakeven in the subsidiary. That's a monthly run rate, right, Siddharth? Of course, monthly, monthly. Yes, monthly, monthly. Okay.
Q
Okay. Sir, I wanted to ask a follow-up question on the stake sale that was earlier asked. You mentioned that the final stake would be 51%. Do you mean that the Boob family would continue to retain more than -- so the Boob family would continue to retain 51%? Or would it be the total promoter stake that would remain above...?
Siddharth Sikchi
The total promoter stake from 75% will go down to 51%. The difference of 24% will be sold by a faction of the Boob family.
Q
Thank you so much for all of you for taking time out and to attend our earnings call. Looking forward to connecting you post the Q2 numbers. Thank you so much and have a great day.
Management
Speaking time
Siddharth Sikchi
43
Pratik Bora
16
Sanjesh Jain
16
Moderator
12
Arun Prasath
12
Jason Soans
8
Ankur Periwal
7
Abhijit Akella
7
Rehan Saiyyed
4
Rohit Nagraj
4
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Opening remarks
Siddharth Sikchi
Thank you so much. Good evening, everyone. I'm happy to connect with you all to discuss the business performance for quarter 1 FY '26. At the outset, let me highlight that the operating environment for the quarter gone by has been marked by heightened volatility, driven by global trade uncertainties and geopolitical tensions. We have observed a degree of client caution resulting in extended decision cycles. The business performance during the quarter has remained resilient and promising in this context. Let me first discuss the standalone financial performance. Starting with Q-on-Q comparison. On a sequential basis, revenue decreased by 9% to INR217 crores. EBITDA and PAT were INR101 crores and INR77 crores, respectively. We are very pleased to report record high EBITDA margin of over 46% since our listing. Coming to year-on-year comparison, the sales were steady for the quarter. Favorable product mix led to lower RMC and record high EBITDA margins. To give a little bit more granular c
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