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Sigachi Industries shares surge 10% after regulatory milestone

Stocks
2 min Read Nov 29, 2024
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Sigachi Industries' share price jumped 10.11% to ₹54.90 during Friday’s intraday trade on the Bombay Stock Exchange (BSE). This surge has sparked renewed interest in share market investment, as the company announced a significant regulatory achievement. Its group company, Trimax Biosciences, successfully submitted a Certification of Suitability (CEP) filing for an active pharmaceutical ingredient (API) to a European regulator.

Regulatory milestone boosts investor confidence

The CEP filing certifies that a pharmaceutical ingredient complies with European Pharmacopoeia standards. Trimax Biosciences submitted an application for “Propafenone Hydrochloride” to the EDQM, or the European Directorate for the Quality of Medicines & Health Care.

Propafenone Hydrochloride, widely used to treat cardiac arrhythmias, has a current global market value of $1.2 billion. Industry analysts project the API market will grow strongly, reaching $2.1 billion by 2032. This expansion is driven by rising cardiovascular disease cases, increased use of generic drugs, and higher healthcare spending.

Financial growth supports share market investment

Sigachi Industries reported strong financial performance in Q2 2024-25. Revenue increased by 39.15% year-on-year to ₹139.54 crore and 43.28% quarterly. Net profits climbed 43.76% year-on-year to ₹21.78 crore, marking a 65.5% rise from the previous quarter.

Despite these figures, Sigachi's stock has underperformed against broader market indices. The shares rose only 7% year-to-date but dipped 6% over the past year, whereas the BSE Sensex gained 9% year-to-date and 18% over one year.

Valuation and trading updates

As of Friday at 11:16 AM, Sigachi’s shares were trading 8.97% higher at ₹55.62, while the BSE Sensex was up 0.95% at 79,797.68. The company has a market capitalisation of ₹1,749.28 crore, and its stock trades at a price-to-earnings multiple of 31.80 and earnings per share of ₹1.60.

Key takeaways

  • Regulatory progress: Trimax Biosciences submitted a CEP filing for Propafenone Hydrochloride, a high-demand cardiac API.

  • Market growth: The API market is forecasted to grow at a 7% compound annual rate, reaching $2.1 billion by 2032.

  • Strong financials: Revenue and net profit surged by 39.15% and 43.76% year-on-year in Q2 2024-25, respectively.

  • Stock performance: Shares climbed 7% year-to-date but underperformed the BSE Sensex.

Sigachi’s regulatory advancements and strong financial results highlight its potential as a promising option for share market investment.