CLEAN - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.0

📊 Core Financials:

- Quarterly PAT at 64.6 Cr. vs 76.6 Cr. shows a decline (-4.15%), indicating short-term weakness.

- EPS of 27.7 ₹ reflects solid profitability.

- ROCE (29.3%) and ROE (21.9%) are excellent, showcasing strong efficiency and shareholder returns.

- Debt-to-equity ratio of 0.00 highlights a debt-free balance sheet.

- Cash flows remain robust, supported by strong margins and zero leverage.

💹 Valuation Indicators:

- Current P/E of 32.5 is above industry average (26.6), suggesting premium valuation.

- P/B ratio ~ 6.2 (899 ₹ / 146 ₹), indicating stretched valuation relative to book value.

- PEG ratio of 3.81 signals growth is not keeping pace with valuation.

- Intrinsic value appears lower than current price, limiting margin of safety.

🏭 Business Model & Competitive Advantage:

Clean Science & Technology operates in specialty chemicals, focusing on performance products and green chemistry solutions. Its competitive advantage lies in innovation, strong R&D, and global customer base. The company benefits from rising demand for sustainable chemical solutions but faces margin pressures due to input costs.

🎯 Entry Zone & Long-Term Guidance:

- Entry zone: 860–890 ₹ (near support levels and undervaluation zone).

- Long-term holding: Attractive for investors seeking exposure to specialty chemicals and sustainability themes. Accumulate on dips for long-term compounding, but monitor valuations and profit trends.

Positive

• Debt-free balance sheet
• Strong ROCE (29.3%) and ROE (21.9%)
• EPS of 27.7 ₹ reflects solid profitability
• FII holdings increased (+4.93%)
• DII holdings increased (+13.0%)

Limitation

• Quarterly PAT decline (-4.15%)
• High P/E (32.5) and P/B (~6.2) indicate premium valuation
• PEG ratio of 3.81 shows growth lagging valuation
• Weak technical momentum (RSI 42.7, MACD negative)

Company Negative News

• Quarterly PAT fell from 76.6 Cr. to 64.6 Cr.
• Profit variation negative despite strong fundamentals

Company Positive News

• Strong institutional support with FII (+4.93%) and DII (+13.0%) increases
• Debt-free status ensures financial stability
• Global demand for sustainable chemical solutions supports long-term growth

Industry

• Industry P/E at 26.6 indicates sector is moderately valued
• Specialty chemicals sector benefits from global demand and sustainability trends
• Competition from domestic and global chemical manufacturers

Conclusion

⚖️ Clean Science & Technology shows strong fundamentals with high ROE/ROCE and debt-free balance sheet. However, premium valuations and recent profit decline raise caution. Best accumulated near 860–890 ₹ for long-term exposure to specialty chemicals and sustainability-driven growth.