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    Clean Science and Technology Q1 FY27 earnings call

    CLEAN
    Chemicals·1 Aug 2026
    Management Summary

    Clean Science and Technology Limited reported its highest ever consolidated sales in Q1 FY27, driven by strong realization and the scaling HALS business. The company announced a strategic collaboration for advanced HALS and a long-term supply contract with a major customer. Despite facing geopolitical headwinds, raw material supply chain disruptions, and production losses, management expressed confidence in continued margin improvement and new product commercialization.

    Highlights

    6

    • Consolidated sales reached highest ever at INR 264 crores, growing 7% QoQ and 10% YoY.

    • Standalone EBITDA margin at 43% and PAT margin at 36%, reflecting strong profitability.

    • HALS business scaled up to 22% of sales, contributing to operating leverage and profit improvement.

    • Strategic collaboration with Geneus Chem provides entry into differentiated advanced HALS chemistry, with a revenue potential of INR 300-350 crores over 3-4 years.

    • Hydroquinone and catechol plant operations are stabilized, ramping up for commercial supplies, with revenue expected to start in August-September 2026.

    • Secured a 5-year long-term contract with Kemin, ensuring assured volumes and an expected offtake increase of 20-40%.

    Concerns

    4

    • Geopolitical headwinds impacted raw material supply chain and costs, and non-availability of shipping vessels affected timely exports.

    • Lost 'a couple of weeks' of production in Q1 due to supply chain and gas issues.

    • Legacy business sales moderated by 6% YoY due to supply-side headwinds (raw material non-availability).

    • Raw material price volatility, particularly from the Middle East crisis, is impacting profitability.

    Key financials

    Single quarter

    10 metrics
    1. 01Consolidated Revenue₹264 Cr+10%YoY
    2. 02Standalone Revenue₹203 Cr+5%QoQ
    3. 03Standalone EBITDA₹87 Cr+5%QoQ
    4. 04Standalone EBITDA Margin43%
    5. 05Standalone PAT₹73 Cr+37%QoQ

    Segment breakdown

    HALS
    22% Share of Sales50% Exports Share
    Top 4 Legacy Products
    60% Share of Sales
    Sales Profile
    83% Performance10% Pharma7% FMCG
    List

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    Capex

    ₹100 crores

    M&A

    Geneus Chem

    joint venture · announced

    Guidance & targets

    11
    CategoryTargetPriority
    Volume
    HALS Volume
    3,000 metric tons
    		High
    Revenue
    HALS Annualized Revenue
    INR 250 crores - INR 300 crores
    		High
    Revenue
    Geneus Chem Partnership Additional Revenue
    INR 300 crores to INR 350 crores
    		High
    HALS Contribution
    HALS Contribution to Overall Revenue Growth
    30% to 35%
    		High
    Product Commercialization
    NOR HALS Production Start
    Production start
    		High
    Product Commercialization
    Hydroquinone and Catechol Revenue Start
    Revenue start
    		High
    Product Commercialization
    Performance Chemical 2 Commercialization
    Commercialization
    		High
    Product Commercialization
    Performance Chemical 2 Major Revenue
    Major revenue
    		High
    Offtake
    Kemin Offtake Increase
    20% to 40%
    		High
    Profitability
    EBITDA Margins
    keep improving
    		High
    Subsidiary Operations
    Clean Fino Chem Operational Start
    Operational
    		High

    What to watch in Q2 FY27

    5

    Hydroquinone & Catechol Revenue Ramp-up

    next quarter
    CurrentRamping up for commercial supplies, revenue expected from August-September 2026
    TargetGradual increase in revenue

    Why it matters

    Monetization of new capacity and contribution to overall revenue growth.

    And now I think starting August, September, the revenue should also start coming in.

    Risks & concerns

    4
    RiskSeverity

    Raw Material Supply Chain Disruptions and Cost Volatility

    Geopolitical headwinds, non-availability of shipping vessels, and the Middle East crisis are impacting raw material supply chain, costs, and timely exports. — Management acknowledged

    high

    Production Loss due to Supply Issues

    The company lost 'a couple of weeks' of production in Q1 FY27 due to supply chain and gas issues. — Management acknowledged

    medium

    Limited Price Pass-Through

    The company is not able to pass on 100% of input cost increases, especially for long-term contracts, which could affect profitability. — Management acknowledged

    medium

    Uncertainty in Supply Chain due to Geopolitical Issues

    Geopolitical issues make the supply chain unpredictable, though efforts are being made to ensure raw material delivery. — Management acknowledged

    medium

    Q&A highlights

    8

    “Sanjesh, volumes are in the range of 1,000 tons, and the product mix has significantly improved to the higher grades of HALS, meaning, I mean, last quarter where almost 50% of contribution came in from HALS 770, this quarter it has come down to 35-odd percent. And hence, the gross margins have improved on the subsidiary level.”

    Clarifies the volume and product mix shift within HALS, indicating a move towards higher-margin products.

    asked by Sanjesh

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    Clean Science and Technology Limited reported its highest ever consolidated sales of INR 264 crores in Q1 FY27, marking a 7% sequential growth and 10% year-on-year growth. Standalone revenue increased by 5% QoQ to INR 203 crores, primarily due to improved realization across all products. The company achieved a standalone EBITDA of INR 87 crores with a 43% margin, and a PAT of INR 73 crores with a 36% margin, reflecting 5% and 37% QoQ growth respectively after adjusting for one-off📎 operating expenses from Q4 FY26.

    02

    HALS Business Expansion and Strategic Collaborations

    The HALS segment continues to be a significant growth driver, now contributing 22% to the company's total sales. Clean Science entered a strategic collaboration with Swiss partner Geneus Chem, providing entry into differentiated advanced NOR HALS chemistry. This partnership is expected to generate INR 300-350 crores in additional revenue over a 3-4 year period, with production slated to begin in Q3 FY27. The company aims for HALS to contribute 30-35% to overall revenue growth in the next financial year.

    03

    New Product Commercialization and Capacity Updates

    The stabilization of the hydroquinone and catechol plant has been largely completed, with operations progressing well and commercial supplies ramping up. Revenue from these products is anticipated to start in August-September 2026. Additionally, the Performance Chemical 2 plant is scheduled for commercialization in Q3 FY27, specifically around November-December, with major revenue contributions expected from Q1 FY28.

    04

    Long-Term Partnership with Kemin

    Clean Science secured a 5-year long-term contract with Kemin, a major global customer for food and feed ingredients. This partnership ensures assured volumes for products like BHA, BHT, TBHQ, and AP. Kemin's offtake is expected to increase by 20-40%, starting within the next 2-3 months, necessitating additional capacity investments from Clean Science.

    05

    Raw Material and Supply Chain Headwinds

    The quarter was marked by geopolitical headwinds🌐 that impacted the raw material supply chain and costs. Non-availability of shipping vessels also affected timely exports, leading to supply-side challenges. The company experienced a loss of approximately two weeks of production due to these issues and gas supply problems. Raw material price volatility, particularly linked to the Middle East crisis, remains a concern for profitability.

    06

    Capital Expenditure and Subsidiary Strategy

    During Q1 FY27, Clean Science infused INR 100 crores into its wholly-owned subsidiary, Clean Fino Chem, bringing the total investment to INR 850 crores. This subsidiary is strategically positioned to house all future new products and lines, centralizing the company's growth initiatives. The subsidiary is expected to become operational in mid-September and will cater to European demand.

    07

    Margin Outlook and Operational Efficiencies

    Management expressed confidence in the sustainability of its gross profit margins, currently at 43-45%, attributing it to the shift towards higher-grade HALS products and improved operational efficiencies. They anticipate continued improvement in EBITDA margins as the company increases sales of higher-grade products and further optimizes plant operations.

    This is an AI-generated summary of a publicly available earnings call transcript.