Clean Science Q2 Results Review - Pressure On Margin Continues To Hurt Performance: Motilal Oswal

Motilal Oswal Report

Clean Science and Technologies Ltd.’s reported Ebitda in Q2 FY25 was below our estimate at Rs 897 million (+20% YoY), with a gross margin of 62.4% (versus 65.9% in Q2 FY24). Ebitdam contracted to 37.7% from 41.3% in Q2 FY24. Revenue contribution of Performance Chemicals increased 2% YoY in Q2 FY25, while that of Pharma and Agro Intermediates declined 1% YoY. PAT increased 13% YoY to Rs 587 million.

A strong YoY growth was observed across various segments, fueled by higher volumes, with the markets in the Americas and China witnessing meaningful expansion. Absolute revenue doubled in the Americas on a sequential basis as commissioning of HALS701 opened up the market for water treatment chemicals.

Management highlighted that there was on average 70% capacity utilization for the standalone business, while the utilization for the HALS segment was very low due to the recent commissioning of the plant.

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