Hold Clean Science and Technology; target of Rs 1368: Prabhudas Lilladher

About this update from Clean Science & Technology Ltd.

Prabhudas Lilladher's research report on Clean Science and TechnologyClean Science and Technology (CLEAN) rep orted revenue of Rs1.8 bn (-27% YoY/ -4% QoQ; PLe ~Rs1.9bn) majorly led by lower sales volumes. EBITDA dropped by -23% YoY/ -2% QoQ to Rs 748mn (PLe Rs696 mn/consensus estimate – Rs 765mn) while EBITDA margin came at 41.3% (vs 39.4%/40.5% in Q2FY23 and Q1FY24 respectively. PAT dropped on account of lower operating profit to Rs522mn (-23% YoY/ -11% QoQ; PLe Rs435mn consensus estimate – Rs 613mn). Though management mentioned that overall domestic market was less impacted than exports, there will be subdued performance for H2FY24, in our view.OutlookWe remain apprehensive on margins as most raw materials are crude derivatives (that may rise along with crude oil prices). We broadly keep our FY24/FY25E EPS estimates unchanged due to persisting demand concerns across business segments, though recovery is expected post 2 quarters. The company trades at 60x FY24 EPS. Maintain ‘Hold’ rating with TP of Rs1,368 (earlier Rs 1,418) valuing at 48x FY26 EPS.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Clean Science and Technology - 04 - 10-2023 - prabhu

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