Clean Science and Technology IPO Financial Analysis (Subscribe)

About Clean science and Technology

Clean Technology manufactures functionally which are Performance Chemicals (MEHQ, BHA, and AP), Pharmaceutical Intermediates (Guaiacol and DCC), and FMCG Chemicals (4-MAP and Anisole). The Issuer is the largest manufacturer globally of MEHQ, BHA, Anisole, and 4-MAP, in terms of manufacturing capacities as of December 31, 2020.
The products are used as polymerization inhibitors, intermediates for agrochemicals and pharmaceuticals, anti-oxidants, UV blockers, and anti-retroviral reagents, which are functionally critical in a wide range of industries.
The customers comprise manufacturers in India and other regulated international markets including China, Canada, Europe, the United States of America, Taiwan, Korea, and Japan.

Clean Science and Technology Financial Review

Clean Science and Technology Company has a robust financial performance since the last three years. The topline of the Issuer has grown strongly over the years. Total revenues for FY21 increased by 25% to Rs 538.07 crore from Rs 430.17 crore for FY20. PAT increased significantly by 42% to Rs 198 crore in FY21 from Rs 139 crore in FY20. The EBITDA and net margins are robust as seen in the table. The Issuer posted an average RoNW of 35%. Clean Science has negligible debt

Table 1 - Financials and Ratios (Amount in INR Crore)
Particulars	FY21	FY20	FY19
Total Revenue	538.07	430.17	404.56
PAT	198.38	139.63	97.66
EBITDA	284.60	196.15	147.60
Total Assets	659.92	429.88	327.47
EBITDA Margin	52.89%	45.60%	36.48%
Net Margin	36.87%	32.46%	24.14%

Valuations and Peer Comparison

With EPS of 18.68 per share, the Issue is priced at of 48.18 times its earnings calculated at the upper price band of Rs 900. Average industry P/E is 55.38 which indicates that the Issue is fully priced. The IPO is valued at P/BV of 17.71x.

Vinati Organics, Fine Organics, SRF Limited are some of the peers of the company whose key financial metrics can be seen in the peer comparison table.

Table 1 - Comparative Analysis of Clean Science and Technology with Competitors
Particulars	Vinati Organics	Fine Organics	Atul Ltd	Camlin Fine Sciences Ltd	SRF Ltd	Navin Flourine	PI Industries
Face Value per share	1	5	10	1	10	2	1
Total Income for FY21	980.1	1150.3	3834.5	1192.1	8454.5	1258.4	4701.9
EPS	26.2	39.25	221.17	4.13	205.54	52.03	49.92
NAV per share	150.16	238.57	1303.7	55.93	157.3	330.06	352.13
Return on net worth	17.45%	16.45%	17.11%	9.16%	17.47%	15.76%	13.82%
P/E	68.43	75.93	40.01	47.65	34.37	64.43	56.83

Conclusion

Clean Science and Technology Company is a global company focused entirely on developing newer technologies using in-house catalytic processes, which are eco-friendly and cost competitive. The financial performance of the Issuer is robust with increasing trends seen in topline as well as bottomline. Hence, one may subscribe to the IPO.Clean Science and Technology Company is a global company focused entirely on developing newer technologies using in-house catalytic processes, which are eco-friendly and cost competitive. The financial performance of the Issuer is robust with increasing trends seen in topline as well as bottomline. Hence, one may subscribe to the IPO.

Reviewer recommends Subscribe to the issue.

Review By CA Priyanka Choudhary on 1st Jul 2021

Review Author

About CA Priyanka Choudhary

CA Priyanka Choudhary, a freelance chartered accountant

Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.

Email: [email protected]

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