Sigachi, is one of the leading manufacturers of Micro Crystalline Cellulose (MCC)

Video l: https://youtube.com/shorts/cmIJY9OBvPM?si=XNBpgKat3hH1C6mg 

Video 2: https://youtube.com/shorts/CgVbB6lIALw?si=jG1a_w3xqYArcWLf

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• Net Debt to Equity (x):  0.03 FY23 
• ROCE:  19% 
• PAT Margins (%) : 13%  Q1-FY24 
• EBITDA Margins (%) : 19.36%      Q1-FY24
  
• PAT : 10cr  Q1-FY24   Vs 12cr
• Revenue growth was driven by ~10% growth in realisations and 3% growth in volumes on a YOY basis
• Sigachi Industries : Makes a 100 cr bet
• Acquisition of  80% in Trimax Bio Sciences for Rs. 100 Crores   
• Size and Turnover of the Company: Existing capacity is 92 KL and turnover for FY 23 is Rs. 35 Crores
• Huge Expansion Possibility from Current 92.0 KL to 540 KL which includes 11 API Suits & 100 Intermediate Reactors with Possibility of Dedicated Oncology Block
• About the company:
• Sigachi is the largest manufacturers of MCC in India and one of the leading manufacturers globally, with over three decades of experience
• Customize the usage and application of the products to various industries including but not limited to pharmaceutical, food, nutraceuticals and cosmetics
• Sigachi has three manufacturing units namely, Hyderabad, Telangana (“Unit I”), Jhagadia,  Gujarat (“Unit II”) and Dahej, Gujarat (“Unit III”). All are operating at 90% plus
• Made advancements in development of MCC and positioned as one of the key manufacturing players globally
• Revenue growth driven by increased demand for MCC across all industries, with volume growth of ~8.5% and realisation growth of ~25% in Q2-FY23 on a YOY basis
• Company successfully passed on freight & raw material increases to the customers.
• Company expects the growth trend to continue with current profitability at sustainable levels.
• Furthermore, capacities of around 7,000MT will be added during the latter part of FY23 which will contribute to additional revenue growth in the coming financial years.
• Company is constantly thriving to improve on its R&D capabilities and cost-effective manufacturing processes and there by remain as a manufacturer of choice with highest quality standards.
• It manufactures MCC of 60 different grades ranging from 15 microns to 250 microns having varied applications in the pharmaceutical, food, nutraceutical and cosmetic industry.
• MCC Industry
• What Management says "MCC and its line of activity, in pharmaceutical I would say it constitutes one of the main key ingredients for formulations in the solid and the liquid oral dosage forms.
• That would mean that every product, which is whether a tablet capsule, or a syrup needs a base of the MCC to be able to transform itself into a table which is digestible and taken in by the patients. So because this is a key ingredient, it becomes paramount for every formulator to be looking at this product to be able to facilitate them from changing their API to a dosage form, which can be consumed by the patients. This is one of the main key functionalities of MCC"
• Microcrystalline Cellulose Market size is forecast to reach USD 1.4 Bn by CY 2025, growing at a
• CAGR of 7.25% during CY 20-25.
• Wood Pulp - Key Raw Material: These are imported from Canada, South Africa, Thailand, Indonesia and America from various suppliers
• Increasing application of MCC in various industries is a major factor propelling growth of the global MCC market.
• For instance, MCC is used as stabilizer and anti-caking agent in beverages. It is also used as a cold and hot stabilizer, in frozen food, in order to improve the shelf life of the product.
• MCC is widely used in pharmaceuticals, owing to its tasteless, odor less, and chemical inertness properties.
• Among end-use industries, pharmaceutical segment accounted for a dominant share in the market, owing to high use of microcrystalline cellulose in pharmaceutical.
• Furthermore, food and beverage segment is expected to exhibit a substantial growth in the global microcrystalline cellulose market over the forecast period. This is due to wide application of MCC in various food and beverages including desserts, frozen food, dairy products, and baked goods. it is also used as a fat replacer and helps maintain the food consistency.
• In line with the global trend, pharmaceutical will be major growth segment followed by food & beverages and cosmetic for MCC Market in India.
• Key Growth Drivers:
• Pharmaceutical Industry:
• The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact. Medicine spending in India is projected to grow 9 -12% over the next five years, leading India to become one of the top 10 countries in terms of medicine spending.
• Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, antidiabetes, anti-depressants and anti- cancers, which are on the rise
• Food & Beverage Industry:
• Innovative advertisements, rise in supermarkets and e-commerce boom, creating increasing awareness among consumers and also making the products easily accessible to the consumers
• Increase in consumption of fast growing F&B segments during special occasions and celebrations.
• Cosmetic Industry:
• With the improving purchasing power, demand for enhanced products and increasing image consciousness of the Indian clientele, many international brands are establishing footprints in India which will be a key factor aiding this growth
• Social media & favorable demographics are playing an important role in spreading awareness about cosmetics products and developing fashion consciousness, not only in metros but also in tier-1 & 2 cities
• Capex: 2022
• The company is expanding the production capacity of MCC by increasing the manufacturing capacity of units in Dahej and Jhagadia
• Setting up of the proposed unit for manufacturing higher grades of MCC and
• CCS will result in increased revenues and profitability
• The strategic decision to expand manufacturing units will increase the ability to cater to the increasing demand of its products
• The company expects to benefit from the economies of scale brought about by such increased production capacity
• 2023: CAPEX at Gujarat facilities for MCC to the extent of around  7,000 MTPA will be added by the end of Q2-FY24 which would contribute to incremental revenue
• New Product Launch: The company plans to foray into the production of Croscarmellose
• Sodium (CCS). which is superior grade of MCC
• Sigachi plans to invest INR 32 Cr for the proposed unit at Kurnool which will have an expected installed capacity of 4 MTPA of CCS 
• This project is expected to be completed by FY24. CCS is a modified sodium carboxymethyl cellulose used as a disintegrant in pharmaceutical formulations and provides long term stability