Clean Science (CLEAN)

FairStock Score: 56/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Zero debt with Altman Z-score of 5.11 indicates a very stable balance sheet.
• High capital efficiency: ROCE of 29.26% and ROE of 18.65%.
• Positive free cash flow of ₹58 Cr and promoter holding of 50.96%.
• Latest quarter remains profitable with sales of ₹185 Cr and net profit of ₹52 Cr.
• Piotroski F-Score of 6/9 reflects moderately sound fundamentals.

Concerns

• Sales and profit are declining: -4.30% and -5.82% respectively.
• Valuation is expensive: P/E of 28.75, P/B of 5.83, and Graham Number of ₹280.82 implies a -161.79% margin of safety.
• DCF intrinsic value of ₹9.63 is far below the current price, suggesting little margin of safety.
• Dividend yield of 0.82% is low, and the stock is well off its 52-week high but still not cheap.

AI Analysis

Let me start with the business. Clean Science has zero debt, a return on capital employed of 29.26%, a return on equity of 18.65%, and positive free cash flow of ₹58 crore. These are signs of financial health and perhaps a narrow moat, because earning nearly 29% on capital without leverage is not average. The Altman Z-score of 5.11 also confirms a solid balance sheet. Sales and profits, however, tell a different story: sales fell 4.30% and profit fell 5.82%. Latest quarter sales of ₹185 crore and net profit of ₹52 crore are decent, but there is no evidence of a growth engine today. Now comes valuation, the part that matters most. At ₹798.90, the market cap is ₹7,813 crore, with a P/E of 28.75 and P/B of 5.83. For a business whose earnings are shrinking, I need a large margin of safety. Instead, the Graham Number is just ₹280.82, meaning the price offers a margin of safety of -161.79%. The DCF intrinsic value of ₹9.63 is even more sobering, though no model is perfect. The stock is down from its 52-week high of ₹1,256.80, but down is not the same as cheap. The dividend yield of 0.82% offers little income while I wait. Promoter holding of 50.96% is reassuring, and the FairStock Score of 49/100 is rightly mixed. In Benjamin Graham’s language, this is not an investment operation with adequate safety of principal. This is a good, debt-free specialty chemicals business at a demanding price. I would place Clean Science on my watchlist, not in my portfolio. When earnings stabilise and the price falls close to a conservative intrinsic value, it could become a truly attractive wealth compounder.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer