Sigachi Industries: Navigating Challenges and Charting a Resilient Growth Path

Sigachi Industries Limited, a prominent global manufacturer of pharmaceutical excipients and active pharmaceutical ingredients (APIs), recently announced its Q2 FY26 and H1 FY26 financial results, alongside crucial updates following a fire incident at its Pashamylaram unit. The company reported a total operating income of 110.5 crore for Q2 FY26. Despite the operational challenges, Sigachi posted an EBITDA of 7.5 crore, reflecting a margin of 6.78%, and a net profit of 10.5 crore, with a PAT margin of 9.59%. These figures underscore the company's resilience and strategic efforts to maintain business continuity and drive future growth.

The quarter saw significant operational realignment. The fire incident at the Hyderabad unit, attributed to a localized dust explosion, led to production reallocation to the Dahej and Jhagadia facilities, ensuring uninterrupted supply to customers. This agility prevented major disruptions. The company has also fast-tracked a 12,000 MTPA capacity expansion at the Dahej SEZ, which will elevate total MCC capacity to 30,000 MTPA by Q3 FY27. Furthermore, the new API R&D center in Hyderabad is now fully operational, consolidating development and analytical efforts to improve speed-to-market and expand into regulated markets. These initiatives are crucial for strengthening Sigachi's market position and enhancing its product portfolio.

Segmental Performance and Strategic Focus

In Q2 FY26, the MCC segment contributed 60% of the total revenue, while Operations and Management (O&M) accounted for 12%, API for 17%, and Allied Trades for 11%. The shift in revenue contribution reflects the impact of the Hyderabad incident on MCC production and the company's efforts to rebalance its portfolio. Management highlighted a strategic focus on prioritizing high-margin, demand-resilient products and expanding its export footprint. This approach aims to ensure efficient resource utilization and reduce supply chain pressure during the recovery phase, ultimately strengthening overall business performance.

The company is also making significant strides in its API business, actively pursuing approvals from the European Directorate of Quality and Medicine with several Certificate of Suitability (CEP) filings underway. These efforts are expected to strengthen Sigachi's position in regulated geographies and expand its API portfolio, focusing on quality and compliance. The new CCS (Cellulose-based excipients) project is on track for commissioning by Q3 FY27, with commercial production anticipated by October-November FY26. This project is expected to broaden the excipient portfolio and tap into high-value market segments.

Financial Stability and Future Outlook

Sigachi maintains a strong financial position with a focus on maximizing stability. The company's gross block has shown consistent growth, reflecting ongoing investments in capacity and infrastructure. While the Q2 FY26 results reflect the temporary disruption from the fire incident, management expressed confidence in a strong H2 FY26, driven by higher capacity utilization and portfolio rebalancing. The company expects to receive approximately 70 crore in insurance claims, covering fixed assets and business interruption, with initial amounts expected in Q3 FY26.

Management's guidance points towards consistent and sustainable growth over the next two to three years, driven by excipients, APIs, and O&M services. The peak revenue potential from the new 12,000 MTPA MCC facility in Dahej is estimated at 250 crore. Sigachi's commitment to operational excellence, disciplined execution, and ongoing investments in research, compliance, and infrastructure are expected to ensure steady and value-accretive growth. The first half of FY26, despite its challenges, has reaffirmed the organization's resilience and the dedication of its workforce, positioning Sigachi to emerge stronger, more agile, and more competitive in the years ahead.