Clean Sciences Q3 2022 Concall Highlights

Operational Highlights

  • Recorded highest ever revenue and PAT in Q3 FY2022.
  • Total revenues increased by 18% and 44% on Q-o-Q and Y-o-Y basis respectively to ₹178.2 Cr in Q3FY22.
  • EBITDA stood at ₹76.1 Cr with EBITDA margins at 42.7%.
  • In 9MFY22, Domestic region contributed 26% followed by 40% from China, 14% from Europe, 13% from the USA and 6% RoW (74% of revenues from export).
  • Gross margins reduced to 64.5% in Q3FY22 from 75.7% in Q3FY21.
  • The incremental prices were marginally passed on and as the contracted ended in December, new contracts are on revised prices and will be reflected from next quarter.
  • Acquired new clients sep-oct period.
  • DCC plant was underutilised to 30-35% , rest of the products stood at 65-70% utilisation.
  • ₹100Cr annual revenue from new products is anticipated at optimum utilisation.
  • Addition of capacity and increasing customers wallet share will drive the future growth.
  • Older products have better margins compared to new launches.

Performance chemicals

  • 65% of revenues were contributed from performance chemicals.
  • Increased realisations across all products.
  • Strong volume offtake for BHA during Q3 FY22 compared to Q3 FY21.

Pharma chemicals

  • 20% revenue contribution from pharma chemicals.
  •  Increased volume offtake across products.
  • Improved realisations for DCC during Q3 FY22.

FMCG 

  • 15% revenue contribution from FMCG related chemicals.
  • Increased volume offtake and improved realisations for all key products in Q3 FY22 compared to Q3 FY21.

New products

  • PBQ and TBHQ are new products to be launched this quarter
  • PBQ is an import substitute and most of the sales are focused in domestic region 
  • Only a few companies of which 2 from China are manufacturers for PBQ. The prices range from 20$ to 30$.
  • PBQ is tricky product as it is oxidation reaction and any changes in colour will result in rejection by clients.
  • TBHQ is more of export oriented product and used as stabiliser in edible oils.
  • BHA and Ascorbyl palmitate goes hand in hand with TBHQ.
  • TBHQ is more of catalytic reaction process.
  • Hydroquinone will be the raw material used to make new products and will be procured from domestic markets.
  • The company does not have plans on backward integration for the product until necessary.

Capex

    • Two new plants commissioned in unit 3 for the new products(PBQ and TBHQ).
    • FY22 capex spend stood at ₹150 Cr.
    • Addition of capacities of MEHQ and Guaiacol by 20-30% in mid of march.

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