Earnings call transcript: Clean Science posts record Q2 2026 revenue as shares fall

Clean Science and Technology Limited revealed its strongest quarterly revenue ever in Q2 FY27, fueled by robust demand for its HALS business, expanding exports, and improved operational scale. The company's standalone revenue climbed 11% sequentially to INR 226 crores, while consolidated revenue surged 23% year-over-year to INR 295 crores.

Shares dropped 3.32% to $715.6, trailing its 52-week peak of $1,026.6 as investors weighed growth potential against margin squeeze from surging raw material costs and limited pricing power. The company disclosed neither actual EPS nor revenue figures. Clean Science noted Q2 FY27 as its highest-revenue quarter, extending a streak of record sales.

HALS revenue doubled compared to the previous year, becoming the primary growth driver. Export sales comprised 73% of the standalone business, up from 64% in the prior quarter. The company attained PAT-positive status for the first time, a pivotal milestone in its shift from investment to monetization. Although raw material costs surged and price hikes were hindered by Chinese competition, margin pressure persisted.

HALS sales doubled year-over-year, with volumes reaching 67% of the full-year FY26 total. Capacity utilization in HALS stood at 30% to 35%, targeting 55% to 60% in subsequent quarters. The company added new customers and increased share with existing ones, solidifying its global market position. Standalone revenue grew 11% quarter-over-quarter to INR 226 crores, while consolidated revenue expanded 23% year-over-year to INR 295 crores.

Standalone EBITDA margin was 36%, or INR 82 crores in absolute terms, while consolidated EBITDA amounted to INR 92 crores with a 31% margin. PAT was INR 55 crores on a standalone basis and INR 56 crores on a consolidated basis, with a 24% margin on the standalone business. H1 FY27 consolidated sales climbed 17% year-over-year to INR 559 crores, with H1 FY27 consolidated EBITDA reaching INR 188 crores and consolidated PAT totaling INR 129 crores.

Despite strong growth, investors remained cautious due to margin concerns stemming from raw material cost hikes and Chinese pricing pressures. Management expressed optimism about HALS, anticipating further growth through higher utilization, advanced grades, and backward integration.