Telangana pharma factory accident: Sigachi shares take a beating, here are cues for investors 

Shares of Sigachi Industries Ltd slipped 16% in two sessions after a reactor explosion at its Pasamailaram Phase 1 facility in Medak district, Sangareddy, Telangana, led to casualties and injuries. Sigachi Industries stock dropped 16.50 per cent in two days to Rs 46.07 on BSE. The stock slipped 5.57% in the current session against the previous close of Rs 48.79. Market cap of the firm slipped to Rs 1760 crore. 

The sudden decline in the stock was caused by the accident in the facility where several lives were lost. 

Investors in the Sigachi stock also took a beating. Here's a look a the technical and fundamental outlook for the stock. 

Kunal Kamble, Sr. Technical Research Analyst at Bonanza said, "Sigachi Industries has witnessed profit booking from higher levels, bringing the price closer to the breakout zone of its falling trendline. Currently, the stock is trading below its major EMAs, reflecting negative sentiment in the short term. The rise in volume during selling sessions further highlights seller dominance. A break below the falling trendline support at Rs 44.60 is likely to increase pressure and could trigger a down move toward Rs 42.54, followed by Rs 38.22." 

"On the upside, the stock needs to decisively close above Rs 56 to regain bullish momentum, with a nearby resistance placed at Rs 50.35. Momentum indicators are also aligned with the bearish setup — the RSI is moving in the southern direction, confirming weakness. The Directional Movement Index (DMI) shows DI- trading above DI+, while the ADX trading above DI+ indicates strong bearish strength," added Kamble. 

Vaibhav Vidwani, Research Analyst at Bonanza said, "The blast at Sigachi Industries' Hyderabad facility is undoubtedly a tragic incident that has claimed lives and injured workers, which rightfully takes precedence over any financial considerations. From an investment perspective, however, the damage appears more contained than initially feared. The affected plant represents roughly 28% of the company's total MCC production capacity (6,000 out of 21,700 MTPA), meaning nearly three-quarters of operations remain unaffected. This is crucial - the two Gujarat plants are running normally and management is actively ramping up production there to fill the gap." 

"The 90-day shutdown timeline gives investors a clear recovery roadmap, and the fact that the facility is fully insured should cover most restoration costs. While there will likely be some revenue impact in the near term and investors may demand stricter safety measures going forward, Sigachi's diversified manufacturing base has prevented what could have been a catastrophic business disruption. The stock may face short-term pressure, but the company's ability to maintain most of its production suggests resilience in its business model," added Vidwani. 

Sigachi Industries is engaged in manufacturing of Micro Crystalline cellulose powder(MCCP).