Sigachi Industries shares slump 22% in 3 days on heavy selling; here's what analysts say
Shares of Sigachi Industries Ltd extended their sharp decline on Wednesday following a reactor explosion at its Pasamailaram Phase 1 facility in Medak district, Sangareddy, Telangana, which resulted in fatalities and injuries. The stock fell 9.92 per cent to hit a low of Rs 41.50, bringing its total loss to 24.79 per cent in three days.
In an official statement, Sigachi confirmed the tragic incident at its Hyderabad unit, acknowledging the loss of life and potential injuries. "We deeply mourn the loss and extend heartfelt condolences to the families of the deceased. All necessary support is being provided to those affected," the company stated.
Sigachi said a detailed assessment is underway and that it is working with relevant authorities to comply with all safety and support protocols. Operations at the Hyderabad plant will remain suspended for about 90 days to allow for repair and restoration of the damaged infrastructure.
Regarding production, Sigachi clarified that the Hyderabad facility contributes 6,000 MTPA of its total 21,700 MTPA Microcrystalline Cellulose (MCC) capacity. The company's two Gujarat-based plants remain fully operational, and efforts are underway to ramp up production at these units during the Hyderabad plant's downtime.
The company also confirmed that the affected facility is fully insured. "We are initiating insurance claims as per standard procedure. Our focus remains on restoring operations swiftly, with renewed emphasis on safety, risk management, and operational excellence," it added.
A few analysts believe the financial impact of the Sigachi blast is limited. On the stock-specific front, a fall below Rs 44.60 could drag the stock to Rs 38. A recovery would require a close above Rs 45, with Rs 56 as a key hurdle.
Vaibhav Vidwani, Research Analyst at Bonanza, said, "The Sigachi Industries blast is a tragic event, but the financial impact appears contained. The affected unit accounts for 28 per cent of total capacity, while the Gujarat plants remain fully operational. A 90-day shutdown and full insurance coverage provide recovery visibility. While short-term pressure is likely, Sigachi's ability to maintain most of its production highlights the resilience of its business model."
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi, noted a sustained move above Rs 45 could trigger a bounce toward the Rs 51–52 range.
Kunal Kamble, Senior Technical Research Analyst at Bonanza, said, "The stock is currently trading below its key EMAs, indicating short-term bearish sentiment. Increased volumes during sell-offs further confirm selling pressure. A breakdown below the falling trendline support at Rs 44.60 could intensify the decline, potentially pushing the stock down to Rs 42.54 and then Rs 38.22. On the upside, a decisive close above Rs 56 is needed to revive bullish momentum, with immediate resistance at Rs 50.35."
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
