Hold Recommendation Issued for Clean Science and Technology, Target Price Set at Rs 846 by Prabhudas Lilladher

Clean Science and Technology Sees Mixed Quarterly Performance, Maintains Growth Momentum

Clean Science and Technology reported revenue of Rs2.5 billion in Q4FY26, marking a decline of 5.5% year-over-year (YoY) but an increase of 13.5% quarter-over-quarter (QoQ). The sequential performance was primarily driven by higher customer offtake and recovery in volumes.

The company's HALS business achieved its highest ever quarterly revenue in Q4FY26, with volumes crossing approximately 1,000 metric tons (mt) during the quarter. Additionally, exit utilization reached 40% in March, supported by an improving product mix and rising exports. The segment also turned EBITDA positive for the first time, reporting a profit of Rs70-80 million during the quarter. Clean Science and Technology expects the growth momentum in HALS to continue, led by higher-grade products.

The company is undertaking backward integration into key HALS intermediates by repurposing the DHTT (pharma intermediate) facility. Furthermore, for the Hydroquinone (HQ) and Catechol plant commissioned in December 2025, management expects a gradual ramp-up over the coming quarters. On the capex front, commercialization of Performance Chemical 2 is now expected by September 2026, delayed due to manpower shortages.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Outlook and Recommendations

Upcoming capacity additions are likely to support growth; however, we remain cautious given macroeconomic volatility and lower realizations in certain legacy products. At the current valuation of 24x FY28E EPS, we maintain a 'HOLD' rating on CLEAN, with a target price (TP) of Rs846, based on 25x FY28 EPS.

| Comparison of Quarterly Performance | | --- | --- | --- | | Q4FY26 | Q4FY25 | Q3FY26 | | Revenue (Rs billion) | 2.5 | 2.65 (YoY decline of 5.5%) | 2.2 (QoQ increase of 13.5%) | | HALS Business Revenue (Rs million) | | | | | Volumes (mt) | 1,000 | | | | Exit Utilization (%) | 40% | | | | EBITDA Profit (Rs million) | 70-80 | | |

Note: All figures are in Indian Rupees (Rs) unless specified otherwise.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline