CLEAN - Clean Science and Technology Limited Share Price

Question and Answer Summary from the Q3 FY '26 Earnings Call

Question 1: Jason Soans from IDBI Capital asked, "How much revenue do we expect both Performance Chemical projects to generate in '27 and '28?"

Answer: I typically avoid giving forward-looking statements in fluid market conditions. However, for Performance Chemical 1, we're now projecting around INR260 crores in revenue due to price reductions and an 80% capacity utilization, down from previously estimated INR320 crores. For Performance Chemical 2, we expect to begin generating staggered revenues in Q4 FY '27, post-commissioning, around May or June.

Question 2: Jason Soans inquired, "What volumes and realizations are we targeting for HALS in '26 and '27?"

Answer: We've achieved 2,000 tons for the first nine months of this year. We've reported a remarkable 55% increase in HALS sales this quarter. Our aim is around 50% utilization for new products over two years, but HALS might exceed that as this market is developing faster than anticipated.

Question 3: Jason Soans further asked, "Could you clarify the customer loss in the cosmetics segment?"

Answer: We lost a key customer in the FMCG segment due to the impact of tariffs, which affected their business in the U.S. This has directly influenced our sales of a product called 4-MAP, which has driven a revenue decline for us.

Question 4: Sanjesh Jain from ICICI Securities questioned about MEHQ, stating, "What has caused the volume decline, and how does competition impact this?"

Answer: The price drop in MEHQ is due to lower hydroquinone prices from China, forcing us to lower our prices to remain competitive. While there's no domestic competition in BHA, we've experienced a volume decline due to the overall decrease in demand globally.

Question 5: Sanjesh Jain also asked, "What's the impact of tariffs and competition on BHA sales?"

Answer: The decline in BHA has been mostly volume-driven, influenced by a customer shift to lower stocks at the end of December, along with tariff-related issues, mainly in North America. Thus, the impact has not been as severe as with MEHQ.

Question 6: Abhijit Akella from Kotak Securities sought clarity on "the volume versus price decline breakdown for this quarter."

Answer: In Q-o-Q results, the 13% revenue decline was primarily due to volume loss, while the 21% Y-o-Y decline reflected a 19% drop in volume and a 2% drop in price realization, indicating that most of the decline is volume-related.

Question 7: Abhijit Akella probed about future EBITDA margins. "What can we expect moving forward?"

Answer: Due to ongoing pricing pressures from China and tariff uncertainties, I would recommend waiting for another quarter before discussing future EBITDA margins. If these conditions persist, we may not see significant improvement in margins in the near term.

Question 8: Manish, a retail investor, asked, "What message can you share with investors regarding recent challenges and future projections?"

Answer: I appreciate your concerns about margins and market challenges. Our primary focus is maintaining market share while navigating these unpredictable macroeconomic elements. We aim to innovate, diversify our product offerings, and sustain healthy cash flow, enabling us to position ourselves for future growth despite current hurdles.

This summary encapsulates the pivotal inquiries and responses discussed in the conference, illustrating the company's current performance and future outlook.