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A thread to understand the business of 'Clean Science and Technology Limited' and the reasons as to why it is number 1 in many of its products. 👇🧵
#cleanscience #cleanscienceipo
First, let us understand the products the company makes.
The company has MEHQ, BHA, Guaiacol, Anisole, 4-MAP, DCC and L-ascorbyl in its portfolio.
Before you yawn reading the unpronounceable chemical names, let me cut the mumbo jumbo and simplify this.
Read 28 tweets
Had a look at #cleanscienceipo
My key takeaways:
1. Really specialty chemicals. Many cos operate under the guise of specialty but this one is the real deal. They did not file patents to protect their process IP.
2. Margins and unit economics top notch. Even china imports from this Co. Wow. Invested in backward integration recently to increase gross margins. Only depend on commodity chemicals as starting materials now.
3. While last 3 years profit CAGR was 42%, i don't think next 3 years will see repeat.
(i) topline growing at 14% in an industry growing at 8-11%.
(ii) some operating leverage and favorable product mix can take profit CAGR to 18-20% IMO.
(iii) I Won't pay PEG of 2.5 for any biz
Read 5 tweets
Clean Science & Technologies⚗️ IPO

🧵Some interesting Key Points:-

🏭Manufactures functionally critical speciality chemicals

💰~65-70% revenues from exports

📈Heavy Growth in PAT Margins(~33% in FY20)

💸EBITDA margins of ~44% in FY20

🟢Easy Raw Material Procurement

❌Company Logo is not registered

🇮🇳Co. Applied for initiation of Anti Dumping Investigation concerning imports of DCC from China🇨🇳

❌Full OFS. Company will not receive proceeds

➕Diverse Customer Base

🏢Company may look at Strategic Acquisition Opportunities.

🏗️2 new plants should get operational in future in addition to existing 2 plants

⚗️Company focuses well on R&D

Read 5 tweets

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