1. At a Glance
A specialty chemical crown jewel with ₹15,373 Cr market cap, Clean Science is globally #1 in several segments. It’s lean, green, and almost debt-free—but is the high P/E of 57 justifiable, or are investors sniffing too much of their own chemicals?
2. Introduction with Hook
Imagine a company that makes additives for diapers, antioxidants for your cornflakes, and stabilizers for your shampoo. Now imagine it having ROCE of 27%, zero real debt, and still flying under the radar. Welcome to Clean Science & Technology—a company so clean it could be your mother-in-law’s favorite stock.
While most chemical companies run on complex integration and pollution, Clean runs on patented green chemistry, clocking 20%+ ROE for years. But now, margins are compressing, working capital cycles have stretched from 130 to 235 days (ouch!), and growth feels like it had too much BHA (an antioxidant, ironically).
3. Business Model (WTF Do They Even Do?)
Clean Science operates in three main segments:
- Performance Chemicals (~69%):
- MEHQ, BHA, AP, TBHQ, HALS — used in polymers, diapers, food, cosmetics, and water treatment
- Global #1 in MEHQ, BHA, AP
- Global #2 in TBHQ
- Pharma Intermediates (~18%):
- Guaiacol, DCC – used in cough syrups, APIs
- FMCG Chemicals (~13%):
- 4-MAP, Anisole – key for fragrances and flavours
USP: Proprietary catalysts, continuous process tech, and zero-waste manufacturing. It’s like the Tesla of chemicals but with better cash flows and fewer Elon tweets.
4. Financials Overview
| Metric | FY25 |
|---|---|
| Revenue (TTM) | ₹986 Cr |
| PAT (TTM) | ₹269 Cr |
| EPS | ₹25.27 |
| OPM | 40% |
| ROCE | 27.2% |
| ROE | 20.2% |
Commentary: Excellent margin profile, but topline growth plateaued. 3Y profit CAGR has slowed to 5%, and inventory buildup suggests demand-side stress or overstocking. Yikes.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹1,445 |
| P/E | 57.2x |
| Price/Book | 10.84x |
| Dividend Yield | 0.35% |
| Book Value | ₹133 |
Fair Value Range (EduModel™): ₹1,050 – ₹1,250
High P/E premium for industry leadership, margins, and IP-backed processes. But FY25 growth? Meh. Multiple contraction risk is real if topline doesn’t rebound.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 PAT: ₹70 Cr, flat growth; nothing explosive
- Promoters considering minority stake sale: Liquidity for them, nervousness for the market
- New HALS expansion: Capacity growth in UV-stabilizers
- Inventory Days up to 156+: Looks like they bought chemicals in bulk for a pandemic that never came
- AGM Scheduled for Sept 11, 2025: Final dividend declared
7. Balance Sheet
| FY | Total Assets | Net Worth | Borrowings | Reserves |
|---|---|---|---|---|
| FY22 | ₹925 Cr | ₹769 Cr | ₹0 Cr | ₹758 Cr |
| FY23 | ₹1,152 Cr | ₹1,010 Cr | ₹2 Cr | ₹999 Cr |
| FY25 | ₹1,608 Cr | ₹1,417 Cr | ₹2 Cr | ₹1,406 Cr |
Key Takeaways:
- Virtually debt-free, pristine balance sheet
- Healthy reserves + reinvestment mindset
- Expansion funded mostly through internal accruals
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹279 Cr | -₹270 Cr | -₹55 Cr | -₹45 Cr |
| FY24 | ₹237 Cr | -₹186 Cr | -₹53 Cr | -₹2 Cr |
| FY25 | ₹214 Cr | -₹152 Cr | -₹53 Cr | ₹10 Cr |
Conclusion:
- Consistent operational cash flows
- Cash being invested in capacity expansion (good)
- No debt traps, but no aggressive returns either
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 44% | 30% | 27% |
| ROE | 27.78% | 22.97% | 20.2% |
| OPM | 43% | 42% | 40% |
| Working Capital Days | 68 | 86 | 235 |
Verdict: Sexy on returns, stressy on working capital. The 235-day cycle is a red flag waving louder than an activist investor on Twitter.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | Expenses | PAT | EPS |
|---|---|---|---|---|
| FY22 | ₹685 Cr | ₹385 Cr | ₹228 Cr | ₹21.51 |
| FY23 | ₹936 Cr | ₹533 Cr | ₹295 Cr | ₹27.78 |
| FY24 | ₹791 Cr | ₹459 Cr | ₹244 Cr | ₹22.97 |
| FY25 | ₹967 Cr | ₹579 Cr | ₹264 Cr | ₹24.88 |
Key Insights:
- FY24 was a dip year in both topline and bottom-line
- FY25 bounce-back is partial, not full-blown
- EPS not growing at par with P/E expansion
11. Peer Comparison
| Company | CMP | P/E | ROE | OPM | PAT (TTM) |
|---|---|---|---|---|---|
| Pidilite | ₹2,992 | 72.8x | 23.1% | 22.9% | ₹2,093 Cr |
| Vinati Organics | ₹1,999 | 49.9x | 15.7% | 26.0% | ₹415 Cr |
| Deepak Nitrite | ₹1,960 | 38.4x | 13.7% | 13.1% | ₹697 Cr |
| Clean Science | ₹1,445 | 57.2x | 20.2% | 39.9% | ₹269 Cr |
Observation:
- Clean has the best margin and lowest revenue base
- Valuation premium likely due to zero-debt, tech moat
- But Vinati and Deepak may offer better risk-reward at current levels
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 74.97%
- FIIs: 6.21%
- DIIs: 5.92%
- Public: 12.90%
- Promoter Sale Expected: Eyeing to offload small stake
- Dividend Yield: 0.35%, payout rising, not royalty-level though
- Shareholders: 2.25 lakh+ retail backers and counting
13. EduInvesting Verdict™
Clean Science is like that student who topped every class till 10th grade but now coasts on past glory. Still sharp, but not as aggressive. It’s the rare specialty chemical firm that doesn’t borrow, doesn’t pollute, and doesn’t chase revenue recklessly.
But beware: Working capital stress is rising. PAT growth has slowed. And the high P/E may not tolerate much disappointment.
If you want long-term compounding, high ROCE, and low ESG guilt, Clean is a fine play. But don’t expect adrenaline — this is a monk in lab goggles.
Metadata
– Written by EduInvesting Analyst Team | 18 July 2025
– Tags: Clean Science, Specialty Chemicals, Green Chemistry, Debt-Free Stocks, High ROCE, EduInvesting Premium
