Clean Science and Technology is well-positioned both in Indian as well as global markets. It will benefit from growing industry opportunities due to its lower cost of production in India as compared to imports from China, as per brokerage house Religare Broking.
“Also, their strong execution capabilities have helped in establishing long term relationships with multinational corporations and customers. Going ahead, its de-risked business model, leadership position across various products and expansion will drive growth. On the financial front, the company is debt free and over the years their performance has been encouraging,” the note stated.
The brokerage has assigned a buy rating on the specialty chemical stock with a target price of ₹2,509 per share as it believes the chemical manufacturer is well placed to benefit from industry trends given its cost competitiveness, higher exports and strong product portfolio.
With the increasing demand for speciality chemicals across global markets, exports are rising from India. Clean Science is one of the core beneficiaries and its exports account for ~67% of revenue. Amongst the geographies, China is the largest market for CST, followed by Europe and America, Religare Broking highlighted.
Also, the players within the sector are shifting focus towards India and exports are rising due to tightening of environmental norms in China and adoption of China+1 strategy and cheap raw material as well as labour availability.
“Going forward, the company intends to capitalize on the growing global demand for its products by expanding its manufacturing capacity, using cost-effective processes, strengthening distribution networks and entering newer markets,” it added.
Clean Science shares made stock market debut in July last year. The Pune-based company manufactures functionally critical specialty chemicals such as performance chemicals, pharmaceutical intermediates, and FMCG chemicals. The newly listed stock has fallen about 20% in 2022 (year-to-date or YTD) so far.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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