1. At a Glance
Sigachi Industries went from “MCC King” to “fire-fighting” in Q1 FY26 — literally. After a devastating blaze at its Pashamylaram unit that tragically claimed 46 lives and singed ₹60 Cr in revenue, the company is in damage control mode. A ₹121 Cr quarterly loss has replaced its usual sweet 20% OPMs.
2. Introduction with Hook
Imagine your top factory turns into a literal firestorm, and your earnings do the same. Sigachi’s Q1 FY26 is the kind of quarter that makes CFOs weep and insurance agents pray. With a ₹1,010 Mn loss and production halt for 180 days, it’s less “Quarterly Results” and more “Corporate Crisis Special Episode.”
But don’t forget — this company once posted 25% CAGR in profits. So, is this a blip… or a burn-out?
3. Business Model (WTF Do They Even Do?)
Sigachi makes Microcrystalline Cellulose (MCC) — no, not a startup drug name, but a pharmaceutical excipient that makes pills… pillable. Basically, it helps your paracetamol tablet not crumble into confetti.
With facilities in Telangana and Gujarat, they’ve supplied to over 40 countries. Think of them as the invisible scaffolding behind every solid dose you take.
Bonus: They also make HPMC and Croscarmellose — or as investors call it, “Too Many Syllables to Fail.”
4. Financials Overview
| Metric | FY23 | FY24 | FY25 | TTM |
|---|---|---|---|---|
| Revenue (Cr) | 302 | 399 | 488 | 521 |
| Net Profit (Cr) | 44 | 57 | 70 | -43 |
| OPM | 19% | 19% | 20% | 20% |
Commentary:
- Until now, the company was riding a strong growth wave with 29% 5Y sales CAGR.
- But Q1 FY26 brought a shocking ₹121 Cr net loss, thanks to the factory fire.
- Fire’s economic toll: ₹60 Cr revenue hit + ₹100+ Cr asset damage. Financial statements? Charred.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹39 |
| P/E | 20x (pre-crisis) |
| P/BV | 2.5x |
| ROE | 13.5% (TTM negative) |
Fair Value Range:
- Base case (normalised earnings): ₹45–₹50
- Post-disaster realism: ₹30–₹35
If you’re buying here, you’re either a believer in insurance claims or just a fan of turnarounds hotter than the fire that caused it.
6. What’s Cooking – News, Triggers, Drama
- Massive Fire (July 2025): 46 lives lost. ₹121 Cr loss. 180-day shutdown.
- ₹5.8 Cr ex-gratia disbursed — human angle handled with sensitivity.
- Insurance claim incoming but exact impact unclear.
- Investor call tone: “We’re resilient” — which is code for “please don’t dump the stock yet.”
Plot twist: the company is using this disaster to “restructure operations”. Phoenix mode?
7. Balance Sheet
| FY | Equity Cap | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY23 | ₹31 Cr | ₹238 Cr | ₹68 Cr | ₹374 Cr |
| FY25 | ₹38 Cr | ₹563 Cr | ₹121 Cr | ₹846 Cr |
Takeaways:
- Borrowing increased, but not terrifying.
- Assets ballooned from ₹374 Cr (FY23) to ₹846 Cr (FY25) — hello, capex frenzy.
- Now, ₹100+ Cr asset is literally in ashes — audit trail’s gonna be spicy.
8. Cash Flow – Sab Number Game Hai
| FY | Ops CF | Inv CF | Fin CF | Net CF |
|---|---|---|---|---|
| FY24 | ₹13 Cr | -₹161 Cr | ₹172 Cr | ₹24 Cr |
| FY25 | ₹27 Cr | -₹93 Cr | ₹81 Cr | ₹15 Cr |
Commentary:
“Capex eating cash faster than a buffet at a pharma conference.”
Working capital cycle: 234 days. That’s not a cycle, that’s a Yatra.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 15.8% (TTM pre-crisis) |
| ROE | 13.5% |
| P/E | 20x |
| OPM | 20% |
| D/E | ~0.2x |
Before the inferno, these were respectable numbers. But one bad quarter and P/E becomes more wishful than rational.
10. P&L Breakdown – Show Me the Money
| FY | Sales | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹302 Cr | ₹59 Cr | ₹44 Cr |
| FY24 | ₹399 Cr | ₹77 Cr | ₹57 Cr |
| FY25 | ₹488 Cr | ₹100 Cr | ₹70 Cr |
| Q1 FY26 | ₹128 Cr | ₹24 Cr | -₹101 Cr |
From ₹70 Cr FY25 profit to ₹101 Cr loss in a single quarter.
This isn’t a slowdown. It’s a nose-dive off Everest.
11. Peer Comparison
| Company | CMP | P/E | ROCE | PAT (TTM) |
|---|---|---|---|---|
| Divi’s | ₹6631 | 80x | 20.4% | ₹2190 Cr |
| Zydus | ₹975 | 21x | 24.3% | ₹4644 Cr |
| Sigachi | ₹39 | 20x | 15.8% | -₹43 Cr |
Looks like the intern showed up to a pharma boardroom filled with Nobel laureates. Cute, ambitious, but way out of league… for now.
12. Miscellaneous – Shareholding, Promoters
| Quarter | Promoters | FIIs | Public |
|---|---|---|---|
| Jun ’25 | 44.14% | 2.89% | 52.97% |
Red flags:
- 45.4% of promoter shares are pledged.
- Public holding rising = insiders offloading?
- FIIs finally noticed the company… just in time for the fire.
13. EduInvesting Verdict™
Sigachi was a textbook smallcap growth story — niche product, expanding capacity, sweet margins. But July 2025 threw a Molotov cocktail into the narrative.
Now:
- Insurance claim is the white knight.
- Safety, ESG, and execution credibility are under the microscope.
- Turnaround will take 2–3 quarters minimum.
Final Word:
“If you like your investments spicy, speculative, and occasionally on fire — Sigachi delivers. Just don’t forget the fire extinguisher.”
Written by EduInvesting Team | 25 July 2025
Tags: Sigachi Industries, Q1 FY26, Pharma Excipients, Fire Incident, Microcrystalline Cellulose, EduInvesting Premium
