Target: ₹1,660
CMP: ₹1,704.30
Clean Science & Technology’s FY22 Annual Report highlights its vision to explore growth and expansion opportunities by focusing on process innovation in sync with products. Launch of new products, capacity expansion of existing products and foray into new product segments backed by a strong R&D pipeline will surely propel Clean Science into its next leg of growth.
The company is focusing on enhancing its R&D initiatives, further building efficiency, and improving processes to bring down the Greenhouse Gas (GHG) emission level by another 5 per cent.
Clean Science has acquired land for Unit IV and all the projects in this unit would be under its wholly owned subsidiary, Clean Fino-Chem Ltd, which will focus on stabilisers and other downstream intermediates that find use in pharma and agro industries.
The company was in an expansion mode in FY22 and incurred a capex of ₹140 crore during the year, which was funded through internal accruals. Clean Science was in net cash position at the end of FY22. The future capex that would be incurred by the company would also be funded through internal accruals. The company is likely to generate an FCF of ₹430 crore over FY23-24, with a capex of ₹250 crore planned over this period.
We maintain our Neutral rating on the stock with a target price of ₹1,660