Understanding the Current Rating
The Strong Sell rating indicates a cautious stance towards Clean Science & Technology Ltd, signalling 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.
Quality Assessment
As of 23 February 2026, Clean Science & Technology Ltd maintains a good quality grade. This reflects a stable operational foundation and reasonable business fundamentals. The company has demonstrated moderate growth in net sales, with a compound annual growth rate of 12.13% over the past five years. However, operating profit growth remains subdued at just 2.36% annually, indicating challenges in converting sales growth into meaningful earnings expansion.
Despite these moderate growth figures, the company’s return on equity (ROE) stands at a respectable 17.7%, suggesting efficient use of shareholder capital. Yet, this positive aspect is overshadowed by other financial and market factors that weigh heavily on the stock’s outlook.
Valuation Concerns
Currently, Clean Science & Technology Ltd is classified as very expensive in terms of valuation. The stock trades at a price-to-book (P/B) ratio of 5, which is significantly higher than typical benchmarks for specialty chemical companies. This elevated valuation implies that investors are paying a premium for the stock, despite the company’s recent financial challenges.
Moreover, the stock’s valuation is at a discount compared to its peers’ average historical valuations, indicating that while expensive, it is not entirely out of line with sector norms. However, the high P/B ratio combined with deteriorating financial trends raises concerns about the sustainability of this premium.
Financial Trend Analysis
The financial trend for Clean Science & Technology Ltd is currently negative. The latest quarterly results for December 2025 reveal a decline in profitability, with profit after tax (PAT) falling by 30.8% to ₹45.88 crores compared to the previous four-quarter average. Net sales for the quarter also hit a low of ₹219.67 crores, reflecting weakening demand or operational challenges.
Return on capital employed (ROCE) has dropped to 23.61%, the lowest in recent periods, signalling reduced efficiency in generating returns from invested capital. Over the past year, the stock has delivered a negative return of 45.26%, underperforming the BSE500 benchmark consistently over the last three years. This persistent underperformance highlights the company’s struggle to generate shareholder value in a competitive environment.
Technical Outlook
From a technical perspective, the stock is rated bearish. Price action over recent months has been weak, with the stock declining 16.39% over the past month and 22.12% over the past three months. The six-month return stands at a steep negative 38.07%, and the year-to-date performance is down 18.63%. These trends suggest sustained selling pressure and a lack of positive momentum among investors.
The daily price change of +0.33% on 23 February 2026 is a minor uptick but insufficient to alter the prevailing negative technical sentiment. The bearish technical grade reinforces the caution advised by the fundamental analysis.
Implications for Investors
For investors, the Strong Sell rating on Clean Science & Technology Ltd signals a high risk of continued underperformance. The combination of expensive valuation, negative financial trends, and bearish technical indicators suggests that the stock may face further downside pressure. While the company’s quality metrics remain decent, they are currently outweighed by the broader challenges impacting profitability and market sentiment.
Investors should carefully consider these factors before initiating or maintaining positions in the stock. The rating advises prudence and suggests that capital may be better allocated to more favourably positioned opportunities within the specialty chemicals sector or broader market.
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Summary of Key Metrics as of 23 February 2026
Clean Science & Technology Ltd’s current market capitalisation remains in the smallcap category, reflecting its niche position within the specialty chemicals sector. The Mojo Score stands at 28.0, categorising the stock firmly within the Strong Sell grade, down from a previous Sell rating of 37 points as of 06 Nov 2025.
Stock returns over various periods illustrate the challenging environment: a 1-day gain of 0.33% contrasts sharply with longer-term declines of 4.11% over one week, 16.39% over one month, and a significant 45.26% loss over the past year. These figures underscore the stock’s persistent underperformance relative to market benchmarks.
Operationally, the company’s subdued growth in operating profit and declining quarterly PAT highlight ongoing profitability pressures. The low ROCE and high valuation multiples further complicate the investment case, suggesting that the stock’s price does not currently reflect its underlying financial health.
In conclusion, the Strong Sell rating reflects a comprehensive assessment of Clean Science & Technology Ltd’s current challenges and risks. Investors are advised to approach the stock with caution, recognising the potential for continued volatility and downside risk in the near term.
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