HDFC Securities assigns a Sell rating to Clean Science and Technology Limited (CSTL) with a target price of ₹1,106. The company plans to launch two performance chemicals and a pharma intermediate within the next year, which could help mitigate its product concentration risks. CSTL has also introduced four new Hindered Amine Light Stabilisers (HALS) in 1HFY25, presenting an import substitution opportunity.
However, the brokerage flags CSTL’s heavy investment of ₹3.3 billion in FY25-26, which represents 40% of its gross block for FY24, as a factor likely to keep asset turnover low. At current valuations of 45x FY25 EPS, CSTL appears expensive, leading to the Sell recommendation.
