Clean Science Q2 FY27 Revenue Hits Record INR 295 Crore

Revenue increased 11% sequentially to INR 226 crores.
Growth was volume-led across Performance, Pharma, and FMCG segments.
Export sales increased to 73% of stand-alone business from 64% in the previous quarter.
EBITDA stood at INR 82 crores with a margin of 36%.
PAT stood at INR 55 crores with a margin of 24%.
Raw material costs rose to 41% of revenue from 35% in Q1 FY27.

Sales grew by 10% year-on-year.
Revenue growth was primarily led by improved realizations, with volumes remaining broadly stable.

Sales grew 17% to INR 559 crores.
EBITDA was INR 188 crores.
PAT was INR 129 crores.
Business split: 77% Performance Chemicals, 14% Pharma Intermediates, 7% FMCG, and 2% Others.

Achieved robust volume growth, with H1 FY27 aggregated volumes reaching 67% of the total volumes achieved in the entire previous financial year (FY26).
The company is now viewed as a trusted strategic partner by customers and is adding new customers and increasing wallet share quarterly.
Current capacity utilization is between 30-40%.
Capacity utilization is expected to reach 55-60% in the coming quarters.
The product mix is currently 60% HALS 770 and 40% advanced HALS; this ratio is expected to shift towards more advanced grades.
CFCL has completed trials for an advanced grade of HALS, with commercial launch expected and shipments to Europe commencing in November or December 2026.

The company has started an ethoxylation facility, a precursor for one HALS product.
Another intermediate, currently imported from China, will be manufactured in-house starting next quarter.
These backward integration efforts are expected to improve gross margins for the HALS segment by 5-7%.
Benefits from these initiatives and operational leverage resulted in a consolidated EBITDA margin of 12% for H1 FY27.

Input costs remained high due to the Middle East crisis, keeping crude-linked feedstock prices elevated.
Key raw materials like phenol, acetone, and methanol were 50% to 100% higher year-on-year.
Coal and freight costs also increased.
On a consolidated basis, raw material cost rose to 43.3% of revenue from 39.7%.
Full pass-through of costs to customers was difficult as Chinese prices have not moved up, creating a 10-15% price differential (e.g., Phenol at INR 1,300 in China vs. over INR 1,550 in India).
The company prioritized retaining market share over implementing price hikes.

Performance Chemicals 2: Plant is expected to be commercialized in Q3-Q4 FY27 (Jan-Feb 2027). The target is to achieve 20-25% capacity utilization in its first year.
Hydroquinone/Catechol: Current capacity utilization is 30-35%, primarily for captive consumption, with small sales in Europe and India.
Barbituric Acid: Project is on hold as current Chinese offering prices are not viable due to 3x higher cost of other Indian raw materials.
Antioxidant 962: A new grade has been commercialized with current production of ~500 tons, manufactured within existing assets.
Future Focus: The strategy is focused on the light stabilizer (HALS) segment, including de-bottlenecking, adding capacity in existing products, and entering HALS adjacencies to cater to the same customer base. A new 1,000-ton line for an advanced HALS product (2020) is planned to start by April-May 2027.
Capex: INR 50 crores was infused into the subsidiary in Q2, bringing the H1 FY27 infusion to INR 150 crores. The total investment in the subsidiary to date stands at INR 900 crores. Significant incremental capex is not anticipated as future expansions involve adding lines to existing assets.