Clean Science Q1 FY27 Results (NSE: CLEAN)
Signal: Margin pressure
The read
Q1FY27 consolidated revenue grew 15.3% YoY but slumped 71.9% QoQ from an anomalous Q4FY26 base. Gross margin expanded sharply by 608bps to 75.8% as raw material costs fell from 30.3% to 24.2% of revenue, a significant tailwind. However, EBITDA margin contracted 147bps YoY to 59.1% as employee and other expenses grew faster than revenue. PAT rose 19.4% YoY, driven by operating growth and a slightly lower tax rate. The standalone business declined 5.8% YoY, indicating that consolidated growth came from subsidiaries.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹268.43 Cr | 15.3% | -71.9% |
| EBIT | ₹147.64 Cr | 13.2% | |
| Net profit | ₹127.76 Cr | 19.4% | |
| EPS | ₹12.02 | 19.4% | |
| EBIT margin | 59.12% |
P&L walk
Revenue grew 15.3% YoY driven by volume/mix (no segment break), gross margin expanded 608bps to 75.8% due to lower raw material costs (RM% fell from 30.3% to 24.2%). Operating expenses (employee + other) grew 18.5% YoY, causing EBITDA margin to contract 147bps to 59.1%. PAT grew 19.4% YoY, matching EPS growth, with no dilution.
Key positives
- Gross margin expanded 608bps YoY to 75.8%, driven by lower raw material costs (RM% fell from 30.3% to 24.2%).
- Consolidated PAT grew 19.4% YoY to ₹1,278 mn, with EPS matching at ₹12.02 (19.4% growth).
- Consolidated revenue grew 15.3% YoY despite a 5.8% decline in standalone, showing strong subsidiary contribution.
Key concerns
- Revenue declined 71.9% sequentially from Q4FY26, though Q4 was an outlier; QoQ comparability is weak.
- EBITDA margin contracted 147bps YoY to 59.1% due to higher employee and other expenses growing faster than revenue.
- Standalone revenue fell 5.8% YoY, suggesting core business weakness despite group growth.
Earnings quality: includes non-operating other income
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