Clean Science Stock Under Pressure: ICICI Securities Cuts Target Price, Downgrades to HOLD – Read the Full Analysis!

ICICI Securities' latest research report highlights significant challenges for Clean Science and Technology, leading to a reassessment of its stock's prospects. The company has experienced a notable dip in sales volumes, primarily attributed to prevailing demand headwinds across the market and a key Chinese customer's decision to integrate backward into its supply chain. This situation has prompted the company to anticipate a muted performance in the third quarter of fiscal year 2026 (Q3FY26).

Looking ahead, Clean Science expects a recovery to emerge in the fourth quarter of FY2026 (Q4FY26), driven by increased demand for its new product offerings, including barbituric acid, performance chemical-1, and DHDT. To remain competitive against Chinese suppliers and secure its market leadership, the company is prepared to adjust its pricing strategy, offering support to customers through price reductions. Performance in the HALS (Hindered Amine Light Stabilizers) segment has shown encouraging signs, with a consistent increase in volumes and an improvement in gross profit margins.

Consequently, ICICI Securities has reduced its EPS estimates for FY26 and FY27 by 16-19% and lowered its target price for Clean Science stock to INR 930, down from INR 1,330, based on a revised FY27E P/E multiple of 30x from 35x. The brokerage has upgraded its rating to 'HOLD' from 'Reduce', but anticipates a broader recovery in the company's financial performance only by FY27.

Impact: This downgrade and price target reduction by ICICI Securities is likely to put downward pressure on Clean Science and Technology's stock performance in the short term. Investors may react cautiously to the revised earnings forecasts and the delayed recovery timeline. The company's ability to successfully execute its pricing strategy and boost off-take for new products will be critical in navigating these challenges and achieving its projected recovery by FY27. Rating: 7/10

Difficult Terms: Demand Headwinds: A situation where the demand for a product or service is slowing down or facing difficulties. Backward Integrating: A business strategy where a company expands its operations by taking control of earlier stages in its production process or supply chain. Muted Q3FY26: Refers to a period of weak or subdued performance expected in the third quarter of the fiscal year 2026. Off-take: The rate or quantity at which a buyer takes delivery of goods or services. Barbituric Acid: A chemical compound that serves as the parent substance for barbiturate drugs, used in synthesizing various compounds. Performance Chemical-1: A chemical product not fully specified but designed to enhance the performance of other materials or processes. DHDT (Dodecyl Hydroxy Diphenyl Triazine): A specific type of chemical compound used primarily as a UV absorber in plastics and coatings to protect them from degradation. HALS (Hindered Amine Light Stabilizers): Additives commonly used in plastics and coatings to protect them from damage caused by exposure to ultraviolet (UV) light. EPS (Earnings Per Share): A financial ratio that shows how much profit a company makes for each outstanding share of its common stock. TP (Target Price): The price level at which an analyst or investor believes a stock is likely to trade in the future. P/E Multiple (Price-to-Earnings Ratio): A valuation metric that compares a company's stock price to its earnings per share, used to gauge the relative value of a stock.