Sigachi Industries Q4 FY26: Margin rebound amid a tough FY26, with FY27 riding on Dahej-2 and APIs

Sigachi Industries ended Q4 FY26 with a sharp sequential improvement in profitability, even as year-on-year comparisons stayed weak. Revenue from operations for the quarter came in at Rs. 1,219 million, up 4.01% quarter-on-quarter, but down 4.91% versus Q4 FY25. EBITDA for Q4 FY26 stood at Rs. 154 million, a 170.17% jump QoQ, and EBITDA margin improved to 12.63%. Profit after tax was Rs. 76 million, compared with a near-flat level in Q3 FY26, translating into a PAT margin of 6.23%.

The quarterly bounce, however, did not change the broader picture for FY26. On a consolidated basis, FY26 revenue from operations was Rs. 4,778 million versus Rs. 5,003 million in FY25. EBITDA declined to Rs. 537 million from Rs. 1,120 million, and margins compressed to 11.24% from 22.38%. The decisive swing was the exceptional item of Rs. (1,182) million in FY26, which pushed reported PBT to Rs. (877) million and reported PAT to Rs. (828) million.

Q4 mix shift: lower MCC share, higher API contribution

One of the clearest takeaways from the presentation is how the revenue mix changed in the quarter. Microcrystalline cellulose (MCC) remained the core, but its contribution fell to 70% of Q4 FY26 revenue from 88% in Q4 FY25. APIs increased their share to 14% in Q4 FY26 from 2% in the year-ago quarter. Operations and management moved to 12% from 9%, and allied trades rose to 4% from 1%.

On Q4 FY26 revenue of Rs. 1,219 million, this implies approximate segment revenues of Rs. 853.3 million from MCC, Rs. 170.7 million from APIs, Rs. 146.3 million from operations and management, and Rs. 48.8 million from allied trades. The presentation positions this as moving up the value chain through value-added and margin-accretive products, especially as the API portfolio expands.

Capacity and R&D: the FY27 narrative is about execution

Management’s narrative for the next phase hinges on two levers: capacity expansion in cellulose-based excipients and a stronger API development engine.

The company is fast-tracking the Dahej-2 expansion of 12,000 MTPA. Civil works are stated to be underway, and the guidance is for the facility to be fully operational by Q4 FY27. Once commissioned, Sigachi expects total MCC capacity to rise to 30,000 MTPA. The FY27 guidance also includes a target of more than 65% capacity utilisation after the ramp-up, signalling that the company is not only building capacity but also planning for volume absorption.

On innovation and product development, Sigachi discloses a growing intellectual property base, including 46 trademarks, 7 patents filed, and 4 CEP filings. It also states that the new API R&D Centre in Hyderabad is fully operational, consolidating API development and analytical work. R&D investments have steadily increased over the past four years, with FY26 R&D spend at Rs. 67.59 million, marginally higher than FY25.

The combination is important because FY26 margins were significantly lower than historical levels. In the five-year view shared in the presentation, EBITDA margins ranged from 19% to 22% between FY21 and FY25, but fell to 11.2% in FY26. PAT margin before exceptional items also reduced to 7.4% in FY26 from about 14% in prior years. Management’s stated aim for FY27 is to recover margins, supported by stable global excipient demand and a higher contribution from APIs.

Financial position: capex continues, operating cash flow soft in FY26

Sigachi has continued investing through the cycle. FY26 capex is disclosed at Rs. 412 million, following Rs. 433 million in FY25 and much higher spend in FY23 and FY24. The company’s gross block was Rs. 2,981 million in FY26.

Operating cash flows, however, were low in FY26 at Rs. 43 million, compared with Rs. 269 million in FY25. The balance sheet also shows trade receivables rising to Rs. 2,242 million in FY26 from Rs. 1,837 million in FY25, while inventories reduced to Rs. 736 million from Rs. 943 million.

These numbers matter because the FY27 plan assumes stable demand and no major disruptions to supply chains or raw material costs. With a ramp-up driven year ahead, working capital discipline and cash conversion will be a key watch item alongside commissioning timelines.

FY27 guidance: return to growth and normalized margins

Sigachi has put numbers behind its FY27 ambition. The company guides for revenue of Rs. 6,500 to Rs. 6,750 million and an EBITDA margin of 18% to 20%. It also reiterates that Dahej-2 is expected to be fully operational by Q4 FY27, and targets more than 65% utilisation of the expanded 30,000 MTPA capacity after ramp-up.

This is a clear shift from FY26, which was defined by a sharp profitability drop and a large exceptional item. The Q4 FY26 performance shows that quarterly margins can recover from a weak base, but the larger test will be whether the company can sustain an 18% to 20% EBITDA margin while scaling volumes and growing the API contribution.

The presentation closes with a consistent strategic theme: expanding core excipient scale, moving into higher value products across the pharma ecosystem, and using R&D and CEP filings to deepen the regulated-market presence. If execution on Dahej-2 stays on schedule and the API portfolio continues to gain share, FY27 becomes the year where Sigachi attempts to convert its investment phase into profitable growth.