RATING

RECOMMENDATION

Sell

  • ROFR Required
  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

  • Secondary

RATING

RECOMMENDATION

Sell

Business Type

Near Leader

RATING

RECOMMENDATION

Sell

Business Type

Near Leader

Discover and get a complete analysis on Sigachi Laboratories Limited - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on Sigachi Laboratories Upcoming IPO.

ISIN

INE368H01018

Face Value

₹10.00

Total Share

67,53,100

Total Income

₹385.70 L

Profit After Tax

₹275.41 L

EPS

₹4.08

P/E

14.22

P/B

1.68

Market Capitalisation

₹39.17 Cr

Enterprise Value

₹36.74 Cr

Book Value

₹34.54

Intrinsic Value

₹238.39

Earnings Yield

7.03 %

Sector

Health Care

Sub-sector

labs & Life Science Services

Category

Listed on Small Exchange

Cashflow - Operations

₹15.11 L

Sigachi Laboratories Growth

Compounded Sales Growth

  • 422.63%

    1 Year

  • 25.41%

    3 Year

  • 21.01%

    5 Year

Pro Only

Compounded Profit Growth

  • 289.79%

    1 Year

  • 35.33%

    3 Year

  • 28.34%

    5 Year

Pro Only

Return On Equity

  • 11.81%

    2021

  • 5.07%

    2019

  • 8.15%

    2017

Pro Only

About Sigachi Laboratories

  • Sigachi Laboratories Limited operates as a pharmaceutical company. The company focuses on the business of manufacturing bulk drugs and drug intermediates and also carries on investments in shares and securities. In FY21, the company generated most of its revenue from investments. 
  • Apart from manufacturing of drugs, company is also involved in investing, and mostly invests in equity and mutual funds with its primary focus on pharmaceuticals, banking, and energy sectors.
  • The company has leased out its two factories from 1st, November 2017 and thus the company is dependent on lease rental from only one party. 
  • The company's shares has been listed at Metropolitan stock exchange.
  • Sigachi Laboratories Limited is a public company incorporated on 21st November 1994. It is classified as a non-government company and is registered at Registrar of Companies, Hyderabad.
  • The company's management includes Lekha Sai Surapaneni, Lakshmana Venkata Subba Rao Patchipulusu, Tadepalli Rao Govardhana, T Adinarayana, G M Rao, K Suneetha, TR Sekhar.

  • Sigachi Laboratories IPO Details

Currently, the company has no plans to raise funds through IPO.

  • Sigachi Laboratories Subsidiaries

The company does not have any subsidiaries/ joint ventures/ associates.

  • Sigachi Laboratories Revenue Segmentation

  • Revenue from Operations
  • Bulk drugs and Intermediate - Lease rents
  • Interest Income
  • Other Income
  • Sigachi Laboratories Product & Services

  • Bulk drugs
  • Intermediate drugs
  • Sigachi Laboratories Assets

Assets of the company as on 31st, March 2021.

Particulars Amount in Rs. Lakhs
Freehold Land75
Buildings62
Plant and Equipments88
Vehicle35
Office Equipments0.39
  • Sigachi Laboratories Industry Overview

Industry Statistics

Pharmaceutical Industry 
  • The pharmaceutical industry discovers, develops, produces, and markets drugs or pharmaceutical drugs for use as medications to be administered to patients (or self-administered), with the aim to cure them, vaccinate them, or alleviate symptoms. Pharmaceutical companies may deal in generic or brand medications and medical devices
  • In FY21, India's pharmaceutical market was valued at Rs 2,150.9 bn (USD 29.0 bn), experiencing a 11.4% increase from FY20.
  • Due to a large consumer base, increased healthcare expenditure, disease prevalence, and the presence of supportive regulatory regimes, emerging pharmaceutical markets are likely to grow rapidly in the coming years. In addition, the region is rapidly adopting new technology and undergoing digital transformation.
  • India is expected to attract multinational drugmaker investment, underpinning its long-term growth potential. The outlook for medicine sales in the country remains positive and will be boosted by a confluence of several important drivers, such as increasing healthcare quality, a large and growing population and the expansion of the universal healthcare scheme. Generic drugmakers will be the greatest beneficiaries from this expected medicine sales growth in the coming years, given the low affordability levels.
  • The Indian pharmaceutical industry is the world’s 3rd largest by volume and 14th largest in terms of value. Total annual turnover of pharmaceuticals was Rs. 2,89,998 Cr. for the year 2019-2020. Major segments of pharmaceutical industry are generic drugs, OTC medicines and API/Bulk drugs, vaccines, contract research & manufacturing, bio-similars & biologics.
  • India enjoys an important position in the global pharmaceuticals sector. India also has a large pool of scientists and engineers with the potential to steer the industry ahead to greater heights. 

Investments - 

  • The company, in FY21, mostly derived its revenue from equity instruments and mutual funds. The sectors in which the investments were carried out are banking, pharmaceuticals, and the energy sector. 
  • Assets Under Management (AUM) of Indian Mutual Fund Industry as on January 31, 2022 stood at ₹38,01,210 crore.
  • The AUM of the Indian MF Industry has grown from ₹ 6.59 trillion as on January 31, 2012 to ₹38.01 trillion as on January 31, 2022 more than 5½ fold increase in a span of 10 years.
  • The MF Industry’s AUM has grown from ₹ 17.37 trillion as on January 31, 2017 to ₹38.01 trillion as on January 31, 2022, more than 2 fold increase in a span of 5 years.
  • Value-oriented mutual fund schemes or value funds offered an average return of 35% in 2021, according to Value Research. These schemes have given around the same 35% returns this year till date. The benchmark S&P BSE 100 TRI offered around 25.99% in FY21.
  • The NIFTY private bank index is designed to reflect the performance of the banks in the private sector, which generated a total return of 14% in 1 year as of January 31, 2021.
  • NIFTY Pharma Index captures the performance of the pharmaceutical sector. The Index comprises of 20 companies listed on national stock exchange of India (NSE), which generated a total return of 9% in 1 year as of 31st, January 2021.
  • The Nifty Oil & Gas Index is designed to reflect the behaviour and performance of the companies belonging to Oil, Gas and Petroleum industry which generated a total returns of 48.38% in 1 year as of 31st, January 2021. 

Future Prospects

Pharmaceutical - 

  • Over the forecast period to 2025, pharmaceutical market is expected to reach a value of Rs. 3,781.4 bn (USD 45.0 bn), experiencing a compound annual growth rate (CAGR) of 11.9% in local currency terms (9.2% in US dollar terms). Over the extended forecast period, medicine sales is expected to experience a 10-year CAGR of 11.3% and 9.7% in local currency and US dollar terms respectively, reaching Rs. 6,290.2 bn (USD 73.06 bn) by 2030. In 2020, per capita pharmaceutical sales remained low at USD 21.03, which places high-value pharmaceutical products out of reach for the majority of patients. Pharmaceutical sales as a percentage of GDP was 1.12% in 2020 and is expected to increase over 10-year forecast period. 
  • According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. India's domestic pharmaceutical market is estimated at US$ 42 billion in 2021 and likely to reach US$ 65 billion by 2024 and further expand to reach ~ US$ 120-130 billion by 2030.
  • India’s medical devices market stood at US$ 10.36 billion in FY20. The market is expected to increase at a CAGR of 37% from 2020 to 2025 to reach US$ 50 billion.
  • As of August 2021, CARE Ratings expect India's pharmaceutical business to develop at an annual rate of ~11% over the next two years to reach more than US$ 60 billion in value.

Government Initiatives

Pharmaceutical - 
  • 'Pharma Vision 2020’ by the Government’s Department of Pharmaceuticals aims to make India a major hub for end-to-end drug discovery. The Indian drugs and pharmaceuticals sector received cumulative FDIs worth US$ 18.12 billion between April 2000 and June 2021. The foreign direct investment (FDI) inflows in the Indian drugs and pharmaceuticals sector reached US$130 million between April 2021 and June 2021.
  • Under Union Budget 2021-22, the Ministry of Health and Family Welfare has been allocated Rs. 73,932 crore (US$ 10.35 billion) and the Department of Health Research has been allocated Rs. 2,663 crore (US$ 365.68 billion). The government allocated Rs. 37,130 crore (US$ 5.10 billion) to the 'National Health Mission’. PM Aatmanirbhar Swasth Bharat Yojana was allocated Rs. 64,180 crore (US$ 8.80 billion) over six years. The Ministry of AYUSH was allocated Rs. 2,970 crore (US$ 407.84 million), up from Rs. 2,122 crore (US$ 291.39 million).
  • The government had also proposed that formulations produced with indigenous APIs be given preference in government procurement.
  • Department of Chemicals and Petrochemicals (DPCO) governs prices of all bulk drugs and formulations to ensure widespread availability of medicines at reasonable prices. Together, the Indian Patent Act and the DPCO significantly influence the structure and growth pattern of the domestic pharmaceutical industry. 

Sigachi Laboratories Strengths

  • The company is completely debt-free as the company must fund its project through fair value gains and equity of the company.
  • The company generated most of its revenue in FY21 from investments. The company has a very diversified portfolio, which will help the company to realise capital gains as well as support a business of bulk and intermediate drugs if the market changes unexpectedly, which is expected to grow at 9-11% in FY22. 

Sigachi Laboratories Shortcomings

  • The majority of the revenue of the company has not been realised from its main business, i.e., bulk drugs and intermediate drugs manufacturing, despite the growth in the pharmaceutical industry.
  • The company doesn't reap the benefits of using financial leverage, which could help them realise higher returns. 
  • The company is subject to market fluctuations and that gives them exposure to downside risk if the market doesn't perform as expected.
  • The company has not made any expenditures on research and technology, which are very crucial in the pharmaceutical industry. 

Sigachi Laboratories Opportunities

  • The global recovery is speeding up. Uptum is likely to be aided by continuing infrastructure investments, supply-side reforms, low-interest loan disbursement, and regulatory ease.
  • The government and the Reserve Bank of India took a number of policy actions to assist set the pace, including a stimulus package, dramatic policy rate cuts, a lending moratorium, and measures to improve liquidity, among other things.
  • Economic growth, rising chronic illness incidence, increased healthcare access, and predicted per capita income growth will fuel further expansion of the healthcare sector, as well as the development of vaccines and other formulations for the Covid 19 virus. As a result, Pharma Businesses have the potential to expand.

Sigachi Laboratories Threats

  • The emerging pharmaceutical industry may face the threats like (i) reduced demand for prescription medicine; (ii) growing competition from generic pharmaceuticals; (iii) rising consumer expectations and difficulties managing brand health; (iv) data breaches and other cyber security threats; (v) supply chain disruptions.
  • Many pharmaceutical businesses' sales and margins may suffer as a result of drug price controls.
  • The pharmaceutical sector is fiercely competitive, with Indian manufacturers with similar production facilities as well as those from other countries posing threats. Human resources in the business with equivalent skills, talent, and experience are mobile across competitors.
  • Unfavorable changes in rules and regulations could have a negative influence on all businesses in the market.
Sigachi Laboratories Rating

  • RECOMMENDATION

    Sell

  • Sigachi Laboratories Detail Info

Industry Statistics

PRIVATE LIMITED

Registered In

India

last Updated

14/02/2022

Registered Date

21/11/1994

Planify Ticker

SLAB

Reg Office: SIGACHI LABORATORIES LIMITED SR.NO.530 & 534 JINNARAM MANDAL MEDAK DISTRICT BONTHAPALLY ANDHRA PRADESH INDIA-502313

Frequently Ask Questions

Sigachi Laboratories Limited has expressed no intention of raising funds through IPO.

The face value of Sigachi Laboratories Limited share is Rs. 10

Yes, Sigachi Laboratories Limited is expected to make good profits in the future.

Sri. T. Adinarayana is the chairman of Sigachi Laboratories Limited.

Sri. T. Adinarayana is the owner of Sigachi Laboratories Limited. He holds 11.16% stake in the company.

Sigachi Laboratories Limited is completely debt-free as the company must fund its project through fair value gains and equity of the company.

We recommend a "Sell" rating on Sigachi Laboratories Limited Shares.

The total profit of Sigachi Laboratories Limited is Rs. 2.75 Cr. in FY21.

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