Clean Science and Technology (CLEAN IN) – Q3FY26 Result Update – Margins remain under pressure – HOLD
Published on 01 Feb 2026
Clean Science and Technology (CLEAN) reported revenue of Rs2.2bn in Q3FY26, a decline of 8.8% YoY and 10.0% QoQ. Performance was impacted by lower realizations as well as weak customer offtake during the quarter. The FMCG chemicals segment witnessed the sharpest decline, driven by the loss of a key Chinese customer. HALS volumes stood at 810tn in Q3FY26, while cumulative volumes for 9MFY26 stood at 2,000tn, reflecting strong YoY growth. However, overall capacity utilization remains low at ~30%. The management expects volume ramp-up in HALS over the coming quarters. The HALS subsidiary also reported EBITDA breakeven in Q3FY26. On the capex front, Performance Chemical 2 is expected to be commercialized in Q1FY27, with meaningful revenue contribution likely from Q4FY27. Revenue from hydroquinone and catechol is expected to commence from Q4FY26. Upcoming capacity additions are expected to support growth, but margin pressures may persist due to lower realizations in certain legacy products and relatively lower profitability of the HALS portfolio compared to the core business. At the current valuation of 26x FY28 EPS, we maintain a ‘HOLD’ rating on CLEAN, with TP of Rs841, valuing the company at 27x Dec’27 EPS.
