Understanding the Current Rating
The Strong Sell rating assigned to Clean Science & Technology Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal and risk profile.
Quality Assessment
As of 31 January 2026, Clean Science & Technology Ltd holds a good quality grade. This reflects the company’s operational strengths and business fundamentals, including its product offerings and market positioning within the specialty chemicals sector. Despite this, the company’s long-term growth trajectory remains modest, with operating profit growing at an annualised rate of just 5.93% over the past five years. This slow growth rate limits the stock’s appeal for investors seeking robust expansion prospects.
Valuation Considerations
The valuation grade for Clean Science & Technology Ltd is currently assessed as very expensive. The stock trades at a price-to-book value of 6.1, which is significantly higher than typical benchmarks for the sector. While the company’s return on equity (ROE) stands at a respectable 17.7%, the elevated valuation metrics suggest that the stock price may not adequately reflect underlying risks. Furthermore, the price-to-earnings-to-growth (PEG) ratio is notably high at 11.7, indicating that earnings growth expectations are priced in at a premium, which could limit upside potential.
Financial Trend Analysis
The financial trend for Clean Science & Technology Ltd is currently negative. The latest quarterly results ending September 2025 reveal a decline in key profitability metrics. Profit before tax (excluding other income) fell by 14.9% to ₹68.19 crores compared to the previous four-quarter average, while profit after tax dropped by 17.4% to ₹55.43 crores. Additionally, the company reported its lowest quarterly earnings before depreciation, interest, and taxes (PBDIT) at ₹87.09 crores. These figures highlight a weakening earnings momentum that weighs heavily on the stock’s outlook.
Technical Outlook
From a technical perspective, the stock is rated as bearish. Price action over recent months has been weak, with the stock delivering a 37.14% loss over the past year as of 31 January 2026. Shorter-term returns also reflect this downtrend, with a 15.30% decline over three months and a 30.98% drop over six months. Despite a modest 2.31% gain on the most recent trading day, the overall technical signals suggest continued downward pressure, which may deter momentum-driven investors.
Performance Relative to Benchmarks
Clean Science & Technology Ltd has consistently underperformed the BSE500 benchmark over the last three years. The stock’s negative returns contrast with the broader market’s more stable performance, underscoring challenges in maintaining investor confidence. While profits have increased marginally by 3% over the past year, this has not translated into positive stock returns, reflecting a disconnect between earnings growth and market valuation.
Implications for Investors
The Strong Sell rating signals that investors should exercise caution with Clean Science & Technology Ltd. The combination of a very expensive valuation, deteriorating financial trends, and bearish technical indicators suggests limited near-term upside and elevated downside risk. Investors may consider this rating as a prompt to reassess their exposure to the stock, particularly if seeking capital preservation or growth aligned with market averages.
Summary of Key Metrics as of 31 January 2026
- Market Capitalisation: Smallcap segment
- Mojo Score: 28.0 (Strong Sell grade)
- 1-Year Return: -37.14%
- Price-to-Book Value: 6.1
- Return on Equity (ROE): 17.7%
- PEG Ratio: 11.7
- Operating Profit Growth (5-year CAGR): 5.93%
- Latest Quarterly PBT (excl. other income): ₹68.19 crores (-14.9%)
- Latest Quarterly PAT: ₹55.43 crores (-17.4%)
- Latest Quarterly PBDIT: ₹87.09 crores (lowest recorded)
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Sector and Market Context
Operating within the specialty chemicals sector, Clean Science & Technology Ltd faces competitive pressures and cyclical demand patterns that influence its financial performance. The company’s smallcap status adds an additional layer of volatility, often resulting in wider price swings compared to larger, more established peers. Investors should weigh these sector-specific risks alongside the company’s individual fundamentals when considering portfolio allocation.
Conclusion
In summary, Clean Science & Technology Ltd’s Strong Sell rating reflects a convergence of factors that currently undermine its investment appeal. While the company maintains a good quality grade, its very expensive valuation, negative financial trends, and bearish technical outlook collectively suggest that the stock is likely to face continued headwinds. Investors are advised to carefully evaluate these elements in the context of their risk tolerance and investment objectives before committing capital.
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