The shares of this leading pharmaceutical company plummeted by over 25 percent over the past five days, after a critical reactor blast took place in Telangana. In this article, we will discuss more about this in detail.
With a market capitalisation of Rs 1,645 crores, the shares of Sigachi Industries Ltd are currently trading at Rs 43.1 per share, down by 38.20 percent from its 52-week high of Rs 69.75. In the last year, the stock has delivered a negative return of 28.43 percent.
On Monday, the Sigachi Pharma plant in Pasamailaram Phase 1 in the Medak district of Telangana witnessed a reactor explosion. As per the company’s latest filing, the reactor blast killed 40 members and injured another 33.
Emergency services acted quickly, dispatching eleven fire engines to manage the blaze and secure the area. The company announced a compensation of Rs 1 crore each to the families of the deceased and further stated that the other who are injured will receive full medical and rehabilitation support.
It also added that the plant will remain temporarily suspended for approximately 90 days. Out of the three plants, it has the least capacity with an installed production capacity of 6,400 MTPA, operating with an efficient capacity utilization of 98.93 percent.
Following the deadly explosion at the Sigachi Industries facility, authorities in Telangana’s Sangareddy district have charged the company’s management with negligent death. Officials noted that they had previously issued warnings about old and unsafe equipment, but ongoing neglect resulted in the tragic fire.
The company reported a revenue of Rs 488 crores in FY25, up by 22.31 percent from its FY24 revenue of Rs 399 crores. Additionally, the company reported a net profit growth of 21 percent to Rs 70 crore in FY25 from Rs 57 crores in FY24.
The stock delivered an ROE and ROCE of 13.50 percent and 15.80 percent, respectively, and is currently trading at a P/E of 23.60x as compared to its industry average of 33.98x.
Sigachi Industries Limited is an Indian company that primarily manufactures microcrystalline cellulose (MCC), which is a key ingredient for making pharmaceutical tablets.
The company also manufactures other cellulose-based excipients for a variety of industries, including pharmaceutical, food, cosmetics and chemicals. The company has manufacturing units in Hyderabad, Jhagadi, and Dahej, and exports products to over 50 countries across the globe.
Written by Satyajeet Mukherjee
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