Sigachi delays Dahej MCC start to Q2 FY28 after Rs 29 crore

Sigachi Industries Limited expects its 12,000-tonne-per-annum Dahej microcrystalline cellulose expansion to be commissioned in Q2 FY28 after spending nearly Rs 29 crore on the MCC and CCS projects. Management said the project may move by one or two months, and its later arrival has reduced the company’s FY27 revenue expectation from Rs 650 crore to around Rs 600 crore.

When will Sigachi commission the Dahej MCC expansion?

Sigachi expects the 12,000-metric-tonne-per-annum microcrystalline cellulose, or MCC, expansion at Dahej Special Economic Zone to be commissioned in Q2 FY28. Management made the timing statement on the October 31, 2026 Q2 FY27 earnings call, saying the addition would take total MCC capacity to about 30,000 metric tonnes per annum.

The Q2 FY28 date is later than management had assumed in its initial FY27 revenue outlook. The chief financial officer said the new MCC project had been expected to come earlier, but now allowed for a one- or two-month variation around the Q2 FY28 schedule. The company also expects commercialisation of its Dahej CCS facility in Q2 FY28, placing both projects in the same expansion phase.

Management linked the revised project timing directly to its FY27 outlook, rather than providing a revised commissioning month. The MCC facility is therefore not expected to provide material operating capacity during FY27, while the company seeks higher use of its existing Dahej and Jhagadia facilities through the second half.

How much has Sigachi spent and budgeted for Dahej?

Sigachi has spent nearly Rs 29 crore in total on the MCC and CCS projects, according to the chief financial officer’s clarification during the call. Management initially referred to roughly Rs 25 crore of spending, then said the combined amount for the two projects was nearly Rs 29 crore.

Sigachi estimates the MCC project will require around Rs 100 crore and the CCS project around Rs 90 crore, making total capital expenditure roughly Rs 200 crore. The figures leave a small difference from the rounded Rs 200 crore total, which management did not explain, and they are estimates rather than a finalised funding plan.

Civil work has been the slower part of execution, management said. Sigachi said it had about one year to finish the civil and finishing work, with plant and machinery expected to be ordered in the final two or three months before installation. Most of the equipment is expected to be sourced domestically.

How will the later MCC start affect Sigachi's FY27 revenue?

Sigachi now expects around Rs 600 crore of FY27 revenue, compared with its earlier Rs 650 crore target, because the new 12,000-tonne MCC capacity will not start as early as previously anticipated. Management described Rs 550 crore to Rs 575 crore as more easily achievable, while saying nearly Rs 600 crore requires additional business in Q3 and Q4.

The company reported total operating income of Rs 130.45 crore in Q2 FY27, with earnings before interest, tax, depreciation and amortisation, or EBITDA, of Rs 19.2 crore and net profit of Rs 8.78 crore. Its EBITDA margin was 14.72% and net profit margin was 6.82% during the quarter.

Management said second-half margins could improve because fixed overheads are not expected to rise further as revenue grows. It also expects a greater contribution from co-processed and special MCC grades, which it said have higher realisations and margins. The chief financial officer retained an FY27 EBITDA-margin expectation of around 18%, while stating that second-half margin could be 18% or higher.

Can Sigachi raise MCC production before Q2 FY28?

Sigachi expects quarterly MCC output capacity to reach 4,500 metric tonnes in Q4 FY27 as safety-equipment work at existing plants is completed. The company produced and sold 7,128 metric tonnes in H1 FY27, while Dahej operated at 79.91% utilisation and Jhagadia at about 79%.

Management expects utilisation to rise by another 10% following installations planned around November 15 to November 20, 2026. It said production was moderated after the Hyderabad plant accident while it conducted internal, external and customer safety audits and installed equipment in fluid-bed dryers and other production equipment.

One safety-equipment installation remained in November 2026, according to management. Sigachi said it had shut down equipment one at a time while keeping other equipment running, which contributed to lower utilisation in H1 FY27. Management expects higher utilisation, revenue and margins in Q3 and Q4 after the work is complete.

What could the Dahej MCC project add after commissioning?

Sigachi management estimated that the new 12,000-tonne MCC capacity could generate Rs 243 crore of revenue at 90% utilisation, or 10,800 metric tonnes. This was management’s illustrative calculation for the period after commissioning, not formal revenue guidance.

MCC remains Sigachi’s largest reported business. In Q2 FY27, MCC contributed Rs 91.22 crore of revenue, compared with Rs 16.67 crore from active pharmaceutical ingredients, or API, and Rs 13.93 crore from operations and maintenance, or O&M. Management said MCC represented about 70% of revenue contribution, while API is expected to grow as a secondary segment.

Product mix is also part of management’s revenue plan. It said co-processed grades represented around 20% of the existing mix and could increase by 50% from that level in Q3 and Q4. Management attributed higher realisations, including 262.83 in Q2 versus 241.36 in Q1, to a changing mix of special and co-processed grades.

Conclusion

Sigachi’s Dahej expansion is still planned to add 12,000 metric tonnes of annual MCC capacity and take total MCC capacity to about 30,000 metric tonnes, but its revenue contribution has shifted beyond FY27. The later schedule helps explain management’s move from a Rs 650 crore FY27 revenue target to an expectation of around Rs 600 crore, with Rs 550 crore to Rs 575 crore described as easier to achieve.

The next disclosed milestones are completion of the remaining November 2026 safety installation, progress toward 4,500 metric tonnes of quarterly MCC capacity in Q4 FY27, and a funding decision for roughly Rs 200 crore of MCC and CCS capital expenditure. Management said it is considering internal accruals, insurance proceeds, debt and equity, but has not finalised the funding structure.