SIGACHI - Sigachi Indust.

📊 NSE: SIGACHI 🏢 Pharmaceuticals - Indian - Bulk Drugs & Formln 📅 Last Updated: 12/14/2025 13:22

💰 Financial Performance

Revenue Growth by Segment

In Q2 FY26, the MCC segment contributed INR 66.4 Cr (60% of revenue, down from 81% YoY), the API segment recorded INR 18.41 Cr (17% of revenue, up from 7% YoY), and O&M services contributed INR 13.17 Cr (12% of revenue, up from 8% YoY). Overall revenue for Q2 FY26 was INR 110.5 Cr, a 13.80% decrease from INR 128.2 Cr in Q2 FY25.

Geographic Revenue Split

Not explicitly disclosed in percentages, but the company has a significant export presence through Sigachi US Inc. and is actively pursuing 9 Certificate of Suitability filings with the European Directorate of Quality and Medicine to expand in regulated European markets.

Profitability Margins

Gross margin for Q2 FY26 was 35.96%, down from 37.75% in Q2 FY25. Net Profit (PAT) margin stood at 9.59% (INR 10.5 Cr) in Q2 FY26 compared to 16.81% (INR 21.0 Cr) in Q2 FY25, representing a 722 bps decline due to operational disruptions.

EBITDA Margin

EBITDA margin plummeted to 6.78% (INR 7.5 Cr) in Q2 FY26 from 21.38% (INR 29.3 Cr) in Q2 FY25, a contraction of 1460 bps. This was primarily driven by the Pashamylaram unit fire incident which increased operational costs and disrupted high-margin MCC production.

Capital Expenditure

The company is investing INR 90 Cr in a new Croscarmellose Sodium (CCS) facility, with INR 32.30 Cr already earmarked in fixed deposits. Additionally, it is fast-tracking a 12,000 MTPA expansion at Dahej SEZ to reach a total capacity of 33,700 MTPA.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE A-; Stable' for long-term facilities (INR 75.38 Cr) and 'CARE A2' for short-term facilities (INR 51.75 Cr). The overall gearing ratio stood at 0.40x as of September 30, 2024, with interest coverage at 7.27x.

⚙️ Operational Drivers

Raw Materials

Refined wood pulp is the primary raw material, accounting for nearly 100% of the material requirement for MCC production.

Import Sources

100% of refined wood pulp is imported from Switzerland, USA, Canada, and South Africa due to lack of domestic availability of the required grade.

Key Suppliers

Not disclosed by specific company names, but the company maintains a concentrated supplier base with long-term established relationships.

Capacity Expansion

Current installed capacity is 21,700 MTPA (increased from 14,500 MTPA in FY24). A planned expansion of 12,000 MTPA at Dahej SEZ is underway, targeting a total capacity of 33,700 MTPA. The CCS facility is expected to commence operations in October 2026.

Raw Material Costs

Raw material costs are a significant portion of the total expenses which were INR 103.0 Cr in Q2 FY26. Procurement is 100% import-dependent, making the company sensitive to global pulp prices and forex fluctuations.

Manufacturing Efficiency

The Dahej expansion is expected to generate peak revenue of INR 250 Cr at full utilization. The company is currently deprioritizing low-throughput SKUs to optimize resources during the recovery phase.

Logistics & Distribution

Distribution costs were impacted by the 'prompt relocation' of production from Hyderabad to Gujarat (Dahej and Jhagadia) to maintain supply consistency for global customers.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

Growth is driven by expanding MCC capacity to 33,700 MTPA, commercializing the new CCS product line by 2026, and increasing API revenue through the newly operational R&D center in Hyderabad. The company is also targeting high-value regulated markets in Europe with 9 active CEP filings.

Products & Services

Microcrystalline Cellulose (MCC) in 60 grades, Active Pharmaceutical Ingredients (APIs), Croscarmellose Sodium (CCS), and Operations & Maintenance (O&M) services for pharma plants.

Brand Portfolio

Sigachi, Trimax Bio Sciences (80% owned subsidiary).

New Products/Services

Croscarmellose Sodium (CCS) and new API molecules developed at the Hyderabad R&D center; CCS facility has a peak revenue potential linked to the INR 90 Cr investment.

Market Expansion

Expanding presence in regulated markets (Europe/USA) and scaling the API portfolio through the Raichur facility (Trimax) which has a 100 KL capacity.

Market Share & Ranking

Leading global manufacturer of pharmaceutical excipients; specific global market share percentage not disclosed.

Strategic Alliances

Acquired 80% stake in Trimax Bio Sciences Private Limited for INR 100 Cr to enter the API manufacturing segment.

🌍 External Factors

Industry Trends

The excipient industry is shifting toward high-purity, multi-functional grades. Sigachi is positioning itself as a fully integrated pharma company by moving from excipients (MCC) into APIs and specialized chemicals (CCS).

Competitive Landscape

Competes with global excipient manufacturers but maintains an edge in regulated markets due to quality certifications and a diverse product range.

Competitive Moat

Moat is built on 60 distinct grades of MCC (15 to 250 microns) and high regulatory barriers in 'regulated markets' where Chinese players are less competitive. This is sustainable due to the long lead times for pharmaceutical ingredient approvals.

Macro Economic Sensitivity

Highly sensitive to global trade cycles and pharmaceutical demand; revenue grew 33% in FY24 during a period of healthy demand.

Consumer Behavior

Increasing demand for nutraceuticals and high-quality pharmaceutical excipients is driving volume growth in the MCC segment.

Geopolitical Risks

Exposure to trade barriers in wood pulp exporting countries (Switzerland, USA, Canada) and regulatory changes in European pharmaceutical markets.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent EDQM (European Directorate of Quality and Medicine) standards and USFDA requirements for API and excipient manufacturing.

Environmental Compliance

Received environmental clearance for the CCS facility in April 2025.

Taxation Policy Impact

Tax expense for Q2 FY26 was INR 3.1 Cr on a PBT of INR 7.4 Cr (effective rate ~41% for the quarter, impacted by exceptional items).

Legal Contingencies

The company is processing insurance claims for the Pashamylaram unit fire incident (June 2025) which fully covers structural damage, inventory, and 90 days of production loss.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline for the full restoration of the Pashamylaram unit and the successful ramp-up of the Dahej expansion to offset current margin pressure (EBITDA down 74% QoQ).