Sigachi Industries FY26: The Margin Collapse Nobody Saw Coming
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1. At a Glance
The numbers are grim. Sigachi closed FY26 with revenue of ₹478 crore—down 2% from the prior year. But the profit picture turned ugly: net profit crashed to a loss of ₹82 crore, from a profit of ₹70 crore in FY25.
The culprit is the June 2025 fire at the Hyderabad facility, which destroyed 6,400 MTPA of capacity (30% of the total) and killed 54 employees. The company took a ₹117 crore exceptional write-off in Q2, plus ₹90 crore in net losses across Q2 and Q3.
The market is paying ₹20.64 per share, a price that embeds no confidence in near-term recovery. At this price, the stock trades at a negative P/E (earnings are negative). The prior five years saw a 19.9% revenue CAGR. This year halted that story.
The question: can the company rebuild to ₹650–675 crore in revenue by FY27 (its own guidance), or is that wishful thinking in a year of chaos?
2. Introduction
Sigachi Industries was founded in 1989 as a chlorochemicals maker, then shifted to microcrystalline cellulose (MCC)—a pharmaceutical excipient used as a binder in tablets. It has since diversified into active pharmaceutical ingredients (APIs), film coatings, polymer blends, food and nutrition.
The company runs four facilities: Dahej and Jhagadia in Gujarat, Hyderabad in Telangana (destroyed), and Raichur in Karnataka via subsidiary Trimax Bio Sciences. Before the fire, total installed capacity sat at 21,700 MTPA for MCC; 6,400 MTPA of that vanished on 30 June 2025 in a dust explosion.
The founder, Rabindra Prasad Sinha, and his family still control ~37% of the company. The company went public in November 2021 at ₹515 per share. The stock has since fallen 96%.
Management’s post-incident strategy: shift focus to the Dahej and Jhagadia units, add 12,000 MTPA of new capacity at Dahej (targeted Q4 FY27), and launch a higher-margin product—croscarmellose sodium (CCS)—by Q1 FY28. Insurance claims of ₹51 crore are pending and remain uncertain.
3. Business Model: WTF Do They Even Do?
Sigachi makes MCC in 60 distinct grades (15 microns to 250 microns), a pharmaceutical powder that pharmaceutical formulators use to bind tablets, control dissolution, and manage tablet texture.
The company also manufactures:
APIs: active pharmaceutical ingredients, developed in-house and via Trimax.
Film coatings and polymer blends: for nutraceutical and pharma use.
Vitamin and mineral premixes: sold via the Sultanpur facility.
Revenue split in FY26: MCC ~70%, API ~14%, Operations & Management ~12%, Others ~4%.
The business works like this: a pharma formulator needs a tablet binder. Sigachi competes on price, quality, regulatory approval (CEP, USFDA, WHO-GMP), and proximity to export markets. Sigachi has 500+ customers across 65+ countries; exports accounted for ~65% of FY26 revenue.
The margins used to be fat. In FY25, EBITDA margin hit 22.4%. By FY26, after the fire and the consequent cost bloat, that compressed to 11.2%. The company was running five-year EBITDA margin average of 18.7%; a full decade of that evaporated in one year.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY24
FY25
FY26
YoY (FY26 vs FY25)
Revenue
399.0
488.2
477.8
-2.1%
EBITDA
76.6
112.0
53.7
-52.0%
PAT
57.2
69.6
-81.8
-217.5%
EPS
1.50
1.82
-2.14
—
The EBITDA collapse reflects margin compression (not just volume loss). Operating profit in FY26 was ₹54 crore vs ₹100 crore in FY25. Interest costs rose from ₹12.4 crore to ₹13.9 crore. Depreciation rose from ₹15.8 crore to ₹17.6 crore (new capex completing). But the fire’s exceptional impact—₹116 crore in write-offs—pushed PBT to negative ₹88 crore and PAT to negative ₹82 crore.
Concall Commentary (June 2026)
Management guided FY27 revenue to ₹650–675 crore and EBITDA margin of 18–20%. This assumes the new Dahej capacity ramps, product mix improves, and the company recovers to near-normalcy in Q4 FY27. Management cited “stable business continuity” and “steady progress across strategic priorities.”
On the fire: the company shifted production to Dahej and Jhagadia but kept utilization constrained to ~75–82% due to mandatory safety audits and customer re-approvals. Insurance claims remain pending; management now expects ad-hoc payouts by late June 2026, with full closure later.
5. Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
5-Year Average
Peer Median
P/E
— (Neg earnings)
19.7
32.2
EV/EBITDA
14.6
—
~18–25
ROE
5.8%
10.9%
12.5%
ROCE
6.2%
—
15.1%
The market currently offers no visible P/E—the company is unprofitable. Enterprise value (Market cap + net debt) sits at ₹902 crore on ₹53.7 crore of EBITDA, implying an EV/EBITDA of 14.6x. This sits below peer median (18–25x), suggesting the market is pricing in a weak recovery or extended period of operational stress.
