Any current/future new fundraising through debt or equity?

No new fundraising through debt or equity is planned currently. All ongoing and planned CAPEX (~Rs. 300 crores through Clean Fino-Chem subsidiary and additional Rs. 170-180 crores for new products) will be fully funded through internal accruals. The company has about Rs. 250 crores in cash on the balance sheet to support CAPEX requirements. Management emphasized reliance on internal accruals for financing expansions and new projects without the need for external funding.

Any current/future capex/capital investment/strategic investment?

Ongoing CAPEX of approximately Rs. 300 crores at Clean Fino-Chem Limited (CFCL), expected to commission by Q4 FY24, fully funded through internal accruals. New pilot facility at CFCL to commission within next 4 weeks to aid scale-up from lab to commercial production. Additional Rs. 170-180 crores earmarked for new products, announcement expected in next 1-2 quarters. Rs. 250 crores investment planned starting January for HALS plant, sales expected to grow thereafter. All new CAPEX and expansions to be financed through internal accruals; company currently holds Rs. 250 crores cash. Rs

Future growth expectations in sales/revenue/volumes?

Target to increase HALS sales to 200 tons per month by March FY25, with new products from the series also expected to contribute significantly. Non-flagship/new products now contribute 25% of revenues and expected to grow, gradually reducing flagship product revenue share. Growth to be driven by volume increases from newer products, including TBHQ and DCC, which are seen as steady, non-cyclical demand products. Internal accruals will finance new CAPEX, supported by cash reserves (~Rs. 250 crores). Demand recovery expected to be gradual over the next 2-3 quarters, with volumes likely to

Future growth expectations in earnings/operating earnings/profits/EPS?

The company targets HALS sales to reach 200 tons per month by March FY25, indicating strong volume growth in new products. Non-flagship (new) products contributed 25% of revenues this quarter, expected to increase, driving diversification and growth. EBITDA margins remain robust at around 42%, supported by better product mix and lower input costs. PAT margins improved to 29.1% despite lower absolute PAT due to lower non-operating income. CAPEX plans include investing Rs. 170-180 crores over the next 1-2 quarters to expand new product lines, funded by internal accruals with Rs. 250 cror

Current/ Expected Orderbook/ Pending Orders?

Siddharth Sikchi mentioned that about 25% of the business in the quarter came from new products, including TBHQ and DCC, which have started gaining traction. HALS products are also contributing, with monthly sales of around 40-50 tons and recent export orders from Europe, China, and Taiwan. The company is evaluating a Rs. 200 crore block for pharma and agro intermediates, with Bhoomi Pujan done in October and expected commissioning in about 9 months. No specific quantified data on total current or pending orderbook was disclosed. The management is cautiously optimistic about order grow

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Clean Science & Technology LtdQ3 FY23Chemicals & Petrochemicals

Clean Science & Technology Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹770P/E: 35.5Market Cap: ₹8.1K CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Target to increase HALS sales to 200 tons per month by March FY25, with new products from the series also expected to contribute significantly.
→Non-flagship/new products now contribute 25% of revenues and expected to grow, gradually reducing flagship product revenue share.
→Growth to be driven by volume increases from newer products, including TBHQ and DCC, which are seen as steady, non-cyclical demand products.
→Internal accruals will finance new CAPEX, supported by cash reserves (~Rs. 250 crores).
→Demand recovery expected to be gradual over the next 2-3 quarters, with volumes likely to improve from 2Q FY24 levels.
→Company emphasizes diversification in products and geography which is aiding margin resilience despite volume/realization pressures.
→Pricing likely to remain under pressure until China normalizes; market conditions and pricing trends will be clearer in coming quarters.

Margin guidance

Category 3

→The company targets HALS sales to reach 200 tons per month by March FY25, indicating strong volume growth in new products.
→Non-flagship (new) products contributed 25% of revenues this quarter, expected to increase, driving diversification and growth.
→EBITDA margins remain robust at around 42%, supported by better product mix and lower input costs.
→PAT margins improved to 29.1% despite lower absolute PAT due to lower non-operating income.
→CAPEX plans include investing Rs. 170-180 crores over the next 1-2 quarters to expand new product lines, funded by internal accruals with Rs. 250 crores cash on hand.
→Volume growth and margin expansion expected as new products scale up, potentially improving overall profitability and EPS over the medium term.
→Pricing pressures currently persist, but stabilization anticipated once China normalizes, impacting future earnings positively.

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Fundraise plans

→No new fundraising through debt or equity is planned currently.
→All ongoing and planned CAPEX (~Rs. 300 crores through Clean Fino-Chem subsidiary and additional Rs. 170-180 crores for new products) will be fully funded through internal accruals.
→The company has about Rs. 250 crores in cash on the balance sheet to support CAPEX requirements.
→Management emphasized reliance on internal accruals for financing expansions and new projects without the need for external funding.

Order book

→Siddharth Sikchi mentioned that about 25% of the business in the quarter came from new products, including TBHQ and DCC, which have started gaining traction.
→HALS products are also contributing, with monthly sales of around 40-50 tons and recent export orders from Europe, China, and Taiwan.
→The company is evaluating a Rs. 200 crore block for pharma and agro intermediates, with Bhoomi Pujan done in October and expected commissioning in about 9 months.
→No specific quantified data on total current or pending orderbook was disclosed.
→The management is cautiously optimistic about order growth but highlighted ongoing destocking impacting immediate demand.
→Plans to announce new products and evaluate opportunities continue as market conditions evolve.

Capex plans

Yes

→Ongoing CAPEX of approximately Rs. 300 crores at Clean Fino-Chem Limited (CFCL), expected to commission by Q4 FY24, fully funded through internal accruals.
→New pilot facility at CFCL to commission within next 4 weeks to aid scale-up from lab to commercial production.
→Additional Rs. 170-180 crores earmarked for new products, announcement expected in next 1-2 quarters.
→Rs. 250 crores investment planned starting January for HALS plant, sales expected to grow thereafter.
→All new CAPEX and expansions to be financed through internal accruals; company currently holds Rs. 250 crores cash.
→Rs. 30 crores CAPEX dedicated to pharma intermediate plant expected to generate Rs. 100 crores revenue, part of overall Rs. 200 crores multiproduct investment block.
→Emphasis on state-of-the-art automated facilities to boost return on assets and reduce time to market.

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