A leading global manufacturer of pharmaceutical excipients and active pharmaceutical ingredients (APIs) is worth keeping in your radar after so many things, including the major explosion incident that happened in one of its production units, with response and recovery, and how the company has performed in Q2 FY26.
We are talking about Sigachi Industries Limited, which emerged as one of the leading Microcrystalline Cellulose (MCC) manufacturers worldwide. The Company has a diverse portfolio comprising high-quality Excipients, Co-processed Excipients, Pre-formulated Excipients, APIs and Intermediates, Vitamin-Mineral-Nutrient Blends and O&M Services.
The company operates 5 advanced manufacturing facilities spread across Gujarat, Telangana, and Karnataka, with a consolidated production capacity exceeding 34,000 Metric Tons Per Annum (MTPA), enabling scalable and efficient output across its product portfolio.
With a market cap of Rs. 1,325 crores, shares of Sigachi Industries Limited fell around 2 percent to close in the red at Rs. 34.67 on Friday, as against its previous closing of Rs. 35.24 on BSE. The stock has delivered negative returns of around 27 percent in one year, and has fallen by over 10 percent in one month.
Hyderabad Unit Incident
The company reported that a government-led investigation is currently underway to determine the cause of the accident at its Hyderabad unit. Preliminary findings from the internal review, supported by independent experts, indicate that the incident was likely caused by a dust explosion originating in the dry section of the facility, specifically near the spray dryer chamber.
In response, the company has initiated damage assessment and phased restoration activities at the Hyderabad site. To ensure business continuity, production has been reallocated to other operational units, with facilities at Dahej and Jhagadia continuing their operations without any disruption. The company stated that future decisions regarding the Pashamylaram unit will be based on the detailed findings of the ongoing government investigation.
As part of its recovery and support measures, the company has extended interim compensation and ex-gratia financial assistance to the families of affected employees and to those injured in the incident. In addition, it has strengthened its safety framework by conducting an enhanced dust hazard analysis aligned with NFPA 660 standards and upgrading pressure venting systems with rupture discs and interlock mechanisms.
Further, the company has implemented stricter environmental controls across powder-handling areas and refined standard operating procedures (SOPs) for preventive maintenance and inspection cycles to mitigate future risks and enhance operational safety.
Future Outlook & Management Guidance
According to the company’s latest outlook and guidance, it expects to utilise nearly 90 percent of its total production capacity in FY26, driven by the full ramp-up of volumes from the Hyderabad unit and the completion of safety audits.
The management reiterated its revenue aspiration of not less than Rs. 575 crore in FY26, with expectations of a stronger performance in Q3 and Q4, despite some minor operational disturbances in the first half of the year.
The CCS project is also targeted for commissioning in Q3 FY27, with an expected EBITDA margin of around 30 percent. The company’s CFO additionally indicated that small-scale CCS commercialisation could begin as early as October-November FY26, ahead of the full commissioning timeline.
In the API segment, the company expects Certificates of Suitability (CoS) approvals within the next two to three quarters, while maintaining its FY26 API revenue guidance.
Revenue Mix and Capex
In Q2 FY26, the company’s revenue contribution was led by the MCC (Microcrystalline Cellulose) segment, accounting for 60 percent of total revenue. The API (Active Pharmaceutical Ingredients) segment contributed 17 percent, followed by Operations and Management at 12 percent, and Allied Trades at 11 percent, reflecting a well-diversified business mix across core and emerging segments.
While talking about capex, in FY21, the company incurred a modest capex of Rs. 9.3 crores, which increased significantly to Rs. 24.3 crores in FY22. The investment peaked in FY23 at Rs. 100.7 crores, indicating a major phase of expansion and infrastructure development. Subsequently, capex remained elevated at Rs. 85.2 crores in FY24 and Rs. 43.3 crores in FY25.
For FY26 and FY27, the company has outlined its capex plans for ongoing and upcoming projects. The planned capex for the MCC expansion of 12,000 metric tonnes is estimated at around Rs. 100 crore, which is expected to generate ~Rs. 250 crore in revenue once fully operational. It is on track for commissioning in Q3 FY27, with 50 percent capacity utilisation anticipated in the second half of FY27
Additionally, the CCS project will require an additional investment of about Rs. 60 crore, supplemented by Rs. 33 crore already available. While the entire expenditure may not be incurred by the end of the current fiscal year, the company confirmed that implementation is actively underway, with all finalised projects progressing as per schedule.
Financial Highlights & more
In Q2 FY26, Sigachi Industries reported a consolidated revenue from operations of Rs. 110 crores, a decline of around 14 percent QoQ and 12 percent YoY. Similarly, the company’s net profit for the quarter stood at Rs. 11 crores, representing a decrease of nearly 48 percent YoY, though it rebounded from a net loss of Rs. 101 crore reported in Q1 FY26, indicating a notable improvement in quarterly profitability.
In terms of financial ratios, Sigachi has reported a RoE of 13.5 percent and ROCE of 15.5 percent, with a debt-to-equity ratio of 0.29. Further, the stock is currently trading at a P/E of 23.1, compared to the industry average of 32.9. As per the latest shareholding data, promoter ownership declined by 3.66 percent, falling from 44.14 percent in June 2025 to 40.48 percent in September 2025.
Written by Shivani Singh
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