CLEANNSEQ2 FY25-26November 06, 2025

Clean Science and Technology Limited

6,603words

164turns

11analyst exchanges

3executives

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Management on call

Siddharth Sikchi

PROMOTER AND

Sanjay Parnerkar

CHIEF FINANCIAL

Pratik Bora

VICE PRESIDENT– CLEAN SCIENCE AND TECHNOLOGY LIMITED

Key numbers — 40 extracted

ology. Let me get to the numbers. The standalone business performance. The revenues decreased by 5% to INR206 crores on a sequential basis and 8% on year-on-year. The decline in revenue was primari

INR206 crore

Let me get to the numbers. The standalone business performance. The revenues decreased by 5% to INR206 crores on a sequential basis and 8% on year-on-year. The decline in revenue was primarily led by lower

one business performance. The revenues decreased by 5% to INR206 crores on a sequential basis and 8% on year-on-year. The decline in revenue was primarily led by lower sales in some of our establish

80%

ablished products. Consequently, top four products contribution to standalone revenue declined to 80% as against 84% in the last quarter, whereas it improved from 74% on a Y-o-Y basis. Despite the mo

84%

. Consequently, top four products contribution to standalone revenue declined to 80% as against 84% in the last quarter, whereas it improved from 74% on a Y-o-Y basis. Despite the moderation in rev

74%

o standalone revenue declined to 80% as against 84% in the last quarter, whereas it improved from 74% on a Y-o-Y basis. Despite the moderation in revenue, EBITDA margins remained resilient at 44% for

44%

rom 74% on a Y-o-Y basis. Despite the moderation in revenue, EBITDA margins remained resilient at 44% for this quarter. The slight margin impact was largely attributed to change in product mix. Furth

d to change in product mix. Further, when we compare on a Y-o-Y basis, EBITDA margins improved by 2% on account of favourable product mix. The standalone EBITDA for the quarter is about INR90 crores

INR90 crore

proved by 2% on account of favourable product mix. The standalone EBITDA for the quarter is about INR90 crores, which is 10% lower on Q-o-Q basis and 5% on a Y-o-Y basis. Standalone PAT for the quarter is IN

10%

of favourable product mix. The standalone EBITDA for the quarter is about INR90 crores, which is 10% lower on Q-o-Q basis and 5% on a Y-o-Y basis. Standalone PAT for the quarter is INR65 crores, whi

INR65 crore

res, which is 10% lower on Q-o-Q basis and 5% on a Y-o-Y basis. Standalone PAT for the quarter is INR65 crores, which is 15% lower Q-on-Q and 4% on Y-o-Y basis. The reduction in PAT was steeper than EBITDA,

15%

on Q-o-Q basis and 5% on a Y-o-Y basis. Standalone PAT for the quarter is INR65 crores, which is 15% lower Q-on-Q and 4% on Y-o-Y basis. The reduction in PAT was steeper than EBITDA, primarily on

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Guidance — 20 items

Siddharth Sikchi

“In Americas, it is just a product's customer-specific volume which he did not lift this quarter or probably he might lift next quarter.”

Sanjesh Jain

“Can you give us the offtake that we are expecting in the second half of this year and next year?”

Siddharth Sikchi

“And I first want to see how are they, I mean, again, there will be validation batches because ultimately it goes into pigment yellow.”

Siddharth Sikchi

“So once I have more clarity, probably in the next quarter I will be able to answer this better.”

Sanjesh Jain

“And margins will be healthier considering the prices are very low?”

Siddharth Sikchi

“And I think quarter on quarter, we expect this business now to grow because the product is there, pricing is there.”

Siddharth Sikchi

“So the timeline is probably two weeks from today is when we expect to see the final product.”

Siddharth Sikchi

“The point is to at least start seeing the end product and start sampling to the customers within the month of December is the target.”

Arun Prasath

“You will start selling samples by December, but at the same time, optimization throughout March will be happening.”

Arun Prasath

“So probably a big chunk of volume we should expect by April.”

Risks & concerns — 15 flagged

The decline in revenue was primarily led by lower sales in some of our established products.

— Siddharth Sikchi

Number one, for some customers, we observed a sharp decline in price of their end product amidst the competitive intensity from Chinese suppliers.

— Siddharth Sikchi

To summarize, we believe these trends represent a mix of second order impact of tariffs and demand slowdown in some end industry, influencing our customers' purchasing behaviour during the quarter.

— Siddharth Sikchi

First on the established products, what was the volume growth or decline, and what was the realization change versus previous quarter?

— Sanjesh Jain

Now, for next couple of quarters, how are we planning to save this difficult scenario of uncertainty?

— Sanjesh Jain

I can see the YoY basis, the decline has come from U.S.

— Sanjesh Jain

But otherwise, BHA because if you look at the pricing of the established products, while MEHQ is seeing some decline in the pricing, but BHA holding steady.

— Arun Prasath

So there is no challenge, but of course the market has to take up.

— Siddharth Sikchi

And it is sometimes very -- it's like a black box, and it is very difficult to predict exactly what is happening there.

— Siddharth Sikchi

So I don't know if there is further decline going to happen.

— Siddharth Sikchi

The second was you, I think you mentioned that the volume decline in a y-o-y basis was about 6%.

— Dhruv Muchhal

Yes, I mean revenue decline is 8% partially contributed by volume.

— Siddharth Sikchi

Revenue decline is, this is only the stand-alone business?

— Dhruv Muchhal

And so, okay, 6% volume decline and primarily, okay.

— Dhruv Muchhal

Can you import and be out of this impact or do you see any impact of this?

— Dhruv Muchhal

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Q&A — 11 exchanges

Yes, good evening, Siddharth. Thanks for taking my question. I have a few of them. First on the established products, what was the volume growth or decline, and what was the realization change versus previous quarter? In YOY is fine, whatever data you've got.

Pratik Bora

Hi Sanjesh, sequentially, when we say that the revenue have declined by 5%, 2% contribution was volume-led and 3% was realization-led. This is at the company level, , rather than speaking about individual product levels. And on YOY, the sales have decreased by 8%. Almost around 6.5% was volume-led and balance was realization led. That's quite clear, thank you. Now, what are we doing to see that I know customer uncertainty is causing it, and this is generally a transient in nature. Now, for next couple of quarters, how are we planning to save this difficult scenario of uncertainty? So, Sanjesh,

Hi, good evening. Thanks for the question, Siddharth. So my first question is on subsidiary numbers. If you see this, run rate has improved sequentially, top line, but gross margin has come down from roughly 42% to 26% in the subsidiary. Is it the mix or a one-time some product has been lower or the overall portfolio, how should we look at this?

Pratik Bora

Yes, Arun, Pratik this side. For the subsidiary company, the gross margin impact which you are highlighting that is on account of the difference in change in stock. So you know for this quarter there is a lower closing stock. That means we have consumed higher opening stock of the last quarter. That is leading to this. So it's more of an optics. But on our portfolio level, as we mentioned, that the material margins are in the range of 35-odd percent. Okay, understood. So we should see the subsidiary margins coming back to this 35-40 percentage levels, depending upon which of course, right? Tha

Yes, good evening. Thank you so much. So just one question regarding the outlook, if I may. Last quarter, we had kind of spoken about an initial target of maybe around INR450 crores EBITDA or something like that for this year. Obviously, I understand the market environment has kind of deteriorated in the timeframe, but any sort of guidance you could offer for this year or maybe next year. That would be really helpful just from an anchoring perspective for the analysts?

Siddharth Sikchi

I know, Abhijit with these very tricky time situations currently with these tariffs coming up, with all these uncertainties, I think it will be very tricky to mention on EBITDA level at the moment. I would suggest let a quarter or two pass by, let these new facilities also come up. By the time I would also understand the competitive landscape. So I think that would be a better idea to give you a little bit on EBITDA. For now, we are only trying to tackle and understand where are we located in amidst all these uncertainties in the global scenarios. Fair enough. I appreciate that. And just on HA

Good evening, sir. First of all, Siddharth Ji, I think in a otherwise tough macro environment, it has been reasonably resilient work. So congrats for that. I have just two questions. My first question is with regards to this Performance Chemicals where we are talking about 10,000 tons capacity. And you mentioned that currently, the prices are very low and full capacity, we can probably target around INR300 crores kind of revenue. So that basically you would assume in the second year?

Siddharth Sikchi

So we are budgeting in this over 3-year period. So by FY '28, we are budgeting to reaching this revenue potential. Understood. And when you look at -- from the overall pricing environment perspective across the different products, how do you see the Chinese competitive environment? So China is a very, very tricky environment. And it is sometimes very -- it's like a black box, and it is very difficult to predict exactly what is happening there. I think the best part, I mean, what we are trying to do is get as much understanding on the China market because 25% to 30% of our revenues still come f

Siddharth one follow-up, clarification. You are saying HALS grew 25% sequentially. What we see in the subsidiary -- subsidiaries a 45% sequential growth, so what is the disconnect?

Pratik Bora

Yes, a kind of clarification here, actually a good question. We are talking about volume growth of 25%. But I mean the value growth is almost 34%. That is because now we have started selling higher grades of HALS also meaning 944 and 119 the realizations are much better. And your answer, which coming to 40%, that is on account of these other by products which we are selling when we are manufacturing HALS. These other products are also contributing to the sales value. Okay. Understood. Thank you, Pratik for the clarification.

Yes. Hi, team. Thanks for the opportunity. Sorry joined the call a bit late, so pardon me if my questions that are repetition. On the HALS front, if I got you right, 25% Q-on-Q volume growth, 34% in terms of value growth, but the margins over here are still relatively lower on a Q-on-Q basis. So any specific reason?

Pratik Bora

No, Ankur, Q-o-Q basis there is a slight improvement in margin because what you are seeing is -- I mean, the P&L margin, but there is a difference of change in stock, which is impacting the COGS. But at a portfolio level there is a slight improvement in the margin. The improvement is slight because the larger portion of HALS sales continues to come from 770. Okay, sure. And we were waiting for a few product approvals to come in, especially from the global markets for HALS. Where are we over there in terms of approvals getting for those multiple products? So we have started seeing good approval

Yes. Thank you so much. Sir a bit of confusion in the standalone minus subsidiary that we do. So if I look at the EBITDA standalone console sorry console minus subsidiary – console minus standalone, it was a loss of about 8 million in 1Q. The loss is now 29 million. So on a percentage basis also the EBITDA loss is higher, although volumes have grown. And you mentioned that the material margin has improved to 34, 35. So I'm just trying to understand what am I missing?

Pratik Bora

Dhruv, the math which you get consolidated minus standalone to arrive at the subsidiary EBITDA of INR3 crores loss. There is the revenue minus COGS minus operating cost. COGS in your math comes out to somewhere I think, 73%, 74%. That is on account of change in stock impact in the subsidiary COGS, meaning opening minus closing stock. So that can only -- so -- okay, so what I'm trying to understand is – yes that is the only bit what I am trying to say is, when you say 31% margin moved to 34% margin, that's on a spot basis. I mean spot base is on an incremental basis that your margins are, say f

Yes, hi, sir. Thank you for the opportunity. Two questions from my side. First, on a standalone basis, given we are already almost halfway through the quarter, do you expect a volume growth to come back in 3Q and what about 4Q?

Siddharth Sikchi

Not Q3 for sure. Okay, and secondly when are we expecting a decent contribution from barbituric acid lamivudine intermediate and Performance Chemical One? Again Q4. All three, I mean the barbituric acid lamivudine intermediate and Performance Chemical One? Performance Chemical One, yes. barbituric, yes. For the lamivudine intermediate, we are waiting for customer validation because this goes into pharmaceuticals. So they are further dependent on their customers. Got it, so net-net 3Q could be a flat and probably a 4Q with these new products and then some probably the legacy products. So there

Good evening, sir. So, sir, I wanted to ask a couple of questions. My first question will be on the HALS division. What about the capacity utilization for this quarter?

Siddharth Sikchi

23%. Sorry can you come again. 25%. 25%, so from 20% now we are at 25%, am I right? Yes. Okay. And what is the like average margin in this division as of now? Yes, so I mean it is close to 35% is the material margin at the portfolio level. Okay. Sir, my second question was about the competitive landscape, like we are seeing companies like, Viniti or Camlin Fine Sciences getting into MEHQ and for Clean Science we are also facing some volume degrowth and so is there some like you know, competitive pressure which we are facing which is giving us this volume de-growth? Not from these players which

Hi, good evening, gentlemen. Just one question on understanding this entire competitive landscape and the second-degree impact that you spoke of. And if one could just understand what would be the sustainability of this given that some competition has emerged in China? Would it be that, because in all prices have been such significantly lower in the international markets, it was thought of as an opportune thing to get into MEHQ, maybe in the Chinese markets, if you are confirming that. And is that also going in line with or in tandem with, let's say, the second-degree impact that we are facing

Siddharth Sikchi

See, our strategy would be to maintain the volumes for sure, we do not want to lose market share for sure. So, that is a clear thought we have in our mind. Sure sir, and the part on the competitive intensity of MEHQ, are there any other products also in our standalone business and how did it, I was wondering, how did it suddenly emerge? Is it only because of phenol prices being that low, given that it's such a small market per se? Archit, just to clarify, we are not mentioning about any emerging competition in MEHQ at this stage. Mentioned about FMCG product. One of the customers has now backw

So, thank you all for taking your time out and understanding our Q2 numbers. We appreciate the questions and the feedback and looking forward to seeing you all at the Q3 call in January. Thank you so much. Have a good day, guys.

Management

Speaking time

Siddharth Sikchi

Arun Prasath

Moderator

Dhruv Muchhal

Ankur Periwal

Sanjesh Jain

Raghav Maheshwari

Rajesh Kothari

Pratik Bora

Archit Joshi

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Opening remarks

Siddharth Sikchi

Thank you so much. Good evening to all of you. We are delighted to welcome all of you for this Q2 interaction of Clean Science and Technology. Let me get to the numbers. The standalone business performance. The revenues decreased by 5% to INR206 crores on a sequential basis and 8% on year-on-year. The decline in revenue was primarily led by lower sales in some of our established products. Consequently, top four products contribution to standalone revenue declined to 80% as against 84% in the last quarter, whereas it improved from 74% on a Y-o-Y basis. Despite the moderation in revenue, EBITDA margins remained resilient at 44% for this quarter. The slight margin impact was largely attributed to change in product mix. Further, when we compare on a Y-o-Y basis, EBITDA margins improved by 2% on account of favourable product mix. The standalone EBITDA for the quarter is about INR90 crores, which is 10% lower on Q-o-Q basis and 5% on a Y-o-Y basis. Standalone PAT for the quarter is INR65 cro

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