The company is expanding their capacities aggressively. And looking at the forecast, it looks like there will be a lot more capex planned in the years to come. This is where most of the outflow is over the past couple of years:
On the operations side - receivables have been growing year over year. This often reflects as lower CFO as profits are not converting to cash on the company’s books immediately. This is also what is causing the debtor days to increase. In my opinion - the company seems to be focusing on grabbing market share, and is compromising on the quality of the deals (lenient payment terms) in order to do so. Hopefully as the company’s client base matures, the receivables on the balance sheet also improves with time.
And regarding the lack of institutional holding, I often like to quote Peter Lynch’s ‘One up on wall street’
“If you find a stock with little or no institutional ownership, you’ve found a potential winner. Find a company that no analyst has ever visited, or that no analyst would admit to knowing about, and you’ve got a double winner. When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm.”
His theory is to get in before the institutions. If institutional ownership is already high, there’s not much room to grow. Just some food for thought.
Tuesday, 4th February 2025: Sigachi Industries Limited, a leading player in Pharmaceutical
Industry provided an update regarding its efficient resource deployment and enhancing
R&D Productivity by establishing Research and Development facility in Hyderabad, India.
This strategic initiative involves an investment of up to USD 1 Million and is set to
commence immediately, reinforcing Sigachi’s commitment to innovation and long-term
growth and efficiency
Extensive experience in the excipients industry, scaling up by offering value added products & flexibility to differentiate and gain share
a) Outperformance: Global MCC industry growth rate ~8% vs. Sigachi’s MCC growth rate ~15-20%
b) Launching CCS – a complementary product with higher value and margin accretion
Expanding its presence in the pharma value chain: Acquired 80% stake in Trimax Bio Sciences to expand into API
Huge headroom for growth in asset light Operations & Management business
Strategic Alliance to Drive Expansion-JVs
Ability to maintain margins and expand further
– Key Risk to Monitor:
Scale up of API segment & timely receipt of CEP approvals
Set up of CCS facility
Number of working capital days/days of receivables
Thursday, 17th April 2025: Sigachi Industries Limited, India’s leading player in
pharmaceutical excipients and specialty ingredients, has received Environmental
Clearance (EC) from the State Environment Impact Assessment Authority (SEIAA), Gujarat for its upcoming Greenfield manufacturing facility at Dahej SEZ, Bharuch, Gujarat. This paves the way for one of Sigachi’s most significant capacity expansions to date, reinforcing the company’s vision to become a global manufacturing powerhouse for excipients, nutraceuticals, and high-value functional ingredients.
Environmental Clearance received on April 16, 2025, with site development and execution
set to begin immediately.
Strategic Highlights:
• Positioned in Dahej SEZ to drive export growth, operational flexibility, and compliance
readiness for regulated markets
• Installed Production Capacity of 3,120 MT/month — across categories including
Cellulose and Starch based specialized Excipients, among others.
• Product portfolio tailored to pharmaceutical, nutraceutical, and food-grade applications
— tapping into high-margin, fast-growing segments in regulated and semi-regulated
markets.
Monday, 28th April 2025: Sigachi MENA FZCO, a wholly owned subsidiary of Sigachi Industries Limited, has signed a Memorandum of Understanding (MoU) with Respilon, an innovation-driven nanofiber R&D company headquartered in the Czech Republic.
This partnership marks a significant milestone in Sigachi’s strategy to expand into advanced drug delivery technologies.
The MoU was signed between Mr. Lijo Chacko, Managing Director of Sigachi MENA FZCO,
and Mr. Roman Zima, Chief Business Officer of Respilon Group s.r.o, during a formal
ceremony on April 24, 2025.
Strategic Highlights of the MoU:
Sigachi and Respilon will collaborate to develop, manufacture, and commercialize drug
delivery solutions based on Respilon’s proprietary NUENEX® nanofiber technology.
Focus on the development of Invisible Patch and Powder-based pharmaceutical delivery
formats.
The collaboration includes developing commercialization strategies for relevant APIs
and formulations, leveraging nanofiber encapsulation technology.
They expect a stable price increase in MCC price/kg of around 4-5% a year
They can increase efficiency of current production lines to 25k metric tonnes of MCC (from 21k). 25% growth from current capacity itself can be achieved this year.
O&M business
Added Adani Solar as a client
Evolved into a stable revenue stream
Target: 75-80Cr in FY’26
Targeting Middle East customers
CCS plant
Environment clearance received. 18 months to commission (October 2026)
Expecting 35% utilisation in the first year
CCS market is 1/8th of cellulose market. So existing MCC customer base themselves will end up being CCS customers.
MCC binds the tablet while CCS breaks the tablet down in the body.
90Cr Capex. 55Cr might be raised via debt (not yet finalised). Remaining will be from IPO funds secured.
Asset turns of 3-4X expected.
2 years to reach 90Cr turnover (optimal capacity utilization)
API molecules
In August’23, Trimax was acquired. In FY’24 this business was bleeding due to low margins. They let go of a lot of these segments and are now focusing on high margin products. Hence in FY’25 topline might have been lesser but this business was at-least EBIDTA positive.
29Cr sales this year, 20% EBIDTA from this segment
Capacity expansion of 150KL has not yet commenced.
4 CEPs filed, 1 approval received. 5 more CEPs to be filed this calendar year.
Other points:
Not much clarity on the US Tariffs as of yet.
Revenue growth outlook remains the same at 25%+ for the next 2-3 years
Margins are stable and will increase towards 25% with the product mix changing to higher value added products
Receivables issue from foreign customers is resolved. Maybe 10% remaining which they will also receive very soon.
Contribution to revenue: Top 5 customers - 43%, Top 10 customers - 60%
Friday, 13th June 2025: Sigachi Industries Limited, a leading player in pharmaceutical excipients and active ingredients, has received the Terms of Reference (ToR) from the State Environment Impact Assessment Authority (SEIAA), Andhra Pradesh for its upcoming Bulk Drugs, Drug Intermediates, and Specialty Chemicals facility at Orvakal, Kurnool District.
This strategic project is proposed over 25.09 acres at Plot No. A-10, Guttapadu-Orvakal
Node. The facility falls under Category B1, aligned with Schedule 5(f) of the EIA Notification,
2006, applicable to the Synthetic Organic Chemicals sector.
With the Terms of Reference now in place, the Environmental Clearance (EC) process is set
to commence from 15th July 2025, followed by project development activities beginning
from 1st August 2025.
The project will be instrumental in:
Enhancing the company’s API manufacturing capacity and global reach.
Supporting pipeline expansion for regulated and semi-regulated markets.
Establishing a strategically located facility with export potential.
Contributing to “Make in India” through world-class infrastructure and sustainable
practices.
