Pharma stock trading at 50% discount with ₹575 Cr revenue growth guidance

Synopsis: Sigachi Industries has increased its stock value by over half since its IPO. The company is one of the largest manufacturers of MCC, a vital component used in pharmaceuticals, food, and many other products.

The shares of this company are in focus after it traded at a heavy discount of more than 50 percent following the Hyderabad plant blast, which constituted almost 29 percent of its total capacity. In this article, we will discuss more about this company.

With a market capitalization of Rs 1,175 crore, the shares of Sigachi Industries Ltd are currently trading at Rs 30.7 per share, representing a decline of 51 percent from its 52-week high of Rs 62.39 per share. It made a peak in February 2024, and to date, it has corrected by more than 64 percent from that peak.

About the company 

Sigachi Industries Limited is one of the largest manufacturers of 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.

Microcrystalline Cellulose (MCC) is a fine, white powder that comes from natural plant fibers. It’s primarily used in the pharmaceutical industry to give tablets their firmness while ensuring they dissolve easily when you swallow them. 

Also Read: ₹2,217 Cr Order: Microcap stock skyrockets 16% after receiving huge order from SIPCOT

Product Overview

MCC finds its way into food and cosmetic products, acting as a thickener, stabilizer, and a way to enhance texture. Because it’s safe, natural, and incredibly versatile, its popularity is on the rise in the pharmaceutical sector and beyond, making waves across various industries worldwide.

For example, Microcrystalline Cellulose (MCC) is used in pharmaceuticals to bind ingredients in tablets and help them dissolve easily. In the food industry, it improves texture in products like ice creams and bakery items while also working as a thickener. 

In cosmetics and personal care, MCC is added to creams, lotions, and powders to enhance smoothness and prevent clumping. It is also used in industrial products like paints and coatings as a stabilizer and texture enhancer.

Operational and Financial Highlights

Sigachi’s revenue for Q1 FY26 was Rs 128 crore, representing a 33 percent increase from Rs 96 crore in the same quarter last year. However, on a sequential basis, revenue stayed flat from Rs 128 crore in Q4 FY25. 

Regarding its profitability, the company reported a net loss of Rs 101 crore in Q1 FY26, compared to a profit of Rs 13 crore in Q1 FY25. Additionally, on a QoQ basis, it reported a profit of Rs 16 crore. In FY25, it derived 84 percent of its revenue from the MCC segment, followed by O&M with 8 percent, API with 6 percent, and Allied Trade with 2 percent. 

It has three manufacturing plants across Dahej, Jhagadia, and Hyderabad with a combined capacity of 22,000 MTPA. Out of the three plants, Dahej is the biggest plant with an installed capacity of 8,400 MTPA, which runs at 85.03 percent capacity utilization.

Additionally, the Jhagadia plant has an installed capacity of 6,900 MTPA, which runs at 85.68 percent capacity utilization. And, the Hyderabad plant with an installed capacity of 6,400 MTPA runs with the highest capacity utilization of 98.93 percent.

Reason behind this fall

One of the major reasons behind this downfall is the explosion. In June 2025, a dust explosion occurred at Sigachi Industries’ Hyderabad unit, resulting in 46 fatalities, multiple injuries, and the temporary suspension of operations.

Sigachi Industries incurred a total provisioned loss of Rs 121 crores due to the Hyderabad plant blast, including Rs 51.48 crores for fixed assets, Rs 7.66 crores for stock loss, Rs 59.35 crores for compensation, and Rs 2.52 crores for GST reversal.

The plant, which contributed ~29% of total capacity, is expected to cause a revenue loss of Rs 60 crores over the next six months, of which Rs 20 crores will be offset by shifting production to Dahej and Jhagadia. 

With Rs 90 crores insured for assets and stock, and a Business Interruption Policy covering Rs 25 crores of operating profit, management expects minimal impact on profitability as insurance claims will compensate losses.

The Hyderabad unit (6,400 MTPA capacity) remains shut for an estimated 180 days while assessments continue. Production has been reallocated to Dahej and Jhagadia units, ensuring smooth supply and strong client retention. 

Guidance & Recovery Outlook:

Despite the temporary disruption, Sigachi has maintained FY26 revenue guidance at Rs 550–575 crores and expects profit growth if insurance claims are settled on time. Safety audits have been conducted across facilities, and insurance is expected to fully cover reconstruction costs. 

The company also announced that has announced the initiation of civil works for its next phase of capacity expansion with an advanced 12,000 MTPA Microcrystalline Cellulose (MCC) project at its Dahej SEZ unit in Gujarat. This will take the total installed MCC capacity to 30,000 MTPA

Meanwhile, growth initiatives remain unaffected: the R&D center in Hyderabad is starting operations, the CCS facility at Dahej is on track, and the API segment is projected to reach Rs 70 crores in FY26, supporting long-term expansion plans.

Sigachi Industries recently encountered a significant hurdle with the blast at its Hyderabad plant, which knocked out nearly 29% of its production capacity and resulted in considerable short-term revenue losses. 

On the bright side, the company is backed by robust insurance, has successfully shifted production to other facilities, and is still pushing forward with its expansion plans. 

This keeps the company on solid ground. With its leadership in the MCC segment, a wide range of applications across various industries, and consistent global demand, there’s a promising long-term growth narrative here.

Although the stock has taken a sharp dip, long-term investors might find the current prices appealing if they have faith in the company’s recovery and future potential. However, an investor must do their own due diligence before investing.

Written by Satyajeet Mukherjee

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Pharma stock trading at 50% discount with ₹575 Cr revenue growth guidance appeared first on Trade Brains.