Sobhagya Mercant - Sobhagya Mercant

📊 BSE: 512014 🏢 Diversified Commercial Services 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Overall revenue growth was 36.49% in FY25, a significant recovery from 5.91% in FY24. Segment-specific percentage splits are not disclosed, but growth is driven by Infrastructure Construction (roads/highways under the Hybrid Annuity Model), Engineering Consultancy, Mining, and Equipment Leasing.

Geographic Revenue Split

Operations are primarily centered in India, with a significant strategic focus on Maharashtra where a new steel manufacturing plant is being established to capture regional demand.

Profitability Margins

Net Profit margins remained stable at 9.87% in FY25 compared to 10.05% in FY24. While operational efficiency improved, higher interest and tax expenses (INR 8.31 Cr in FY25 vs INR 4.14 Cr in FY24) offset the gains at the bottom line.

EBITDA Margin

EBITDA margin improved to 14.24% in FY25 from 11.42% in FY24, representing a 282 basis point increase. This was driven by a better project mix and improved cost control measures.

Capital Expenditure

The company is investing in a new steel manufacturing plant in Maharashtra; however, the specific total project cost in INR Cr is not disclosed in the provided documents.

Credit Rating & Borrowing

The company has sanctioned working capital limits exceeding INR 5 Cr from banks. Specific credit ratings and interest rate percentages are not disclosed.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel, cement, and fuel. These are critical for the Infrastructure Construction and Steel Manufacturing divisions.

Import Sources

Sourcing is primarily domestic within India, with a strategic manufacturing presence in Maharashtra to minimize logistics costs for steel production.

Capacity Expansion

The company is currently expanding into steel manufacturing with a new plant in Maharashtra aimed at high-grade construction and industrial steel. Specific MTPA capacity figures are not disclosed.

Raw Material Costs

Raw material costs are subject to commodity price volatility. The company utilizes disciplined expense management to mitigate the impact of price fluctuations in steel and cement.

Manufacturing Efficiency

Fixed Asset Turnover Ratio improved significantly from 76.83 in FY24 to 128.32 in FY25, indicating much higher revenue generation per unit of fixed asset investment.

📈 Strategic Growth

Expected Growth Rate

36.49%

Growth Strategy

Growth is targeted through the execution of large-scale road projects under the Hybrid Annuity Model (HAM), expansion into high-grade steel manufacturing in Maharashtra, and leveraging coal mining reforms for commercial mining opportunities.

Products & Services

Infrastructure construction (roads/highways), engineering consultancy, mined resources, leased construction equipment, and high-grade construction/industrial steel.

Brand Portfolio

Sobhagya Mercantile Limited (SML).

New Products/Services

High-grade construction and industrial steel from the new Maharashtra plant are expected to strengthen the value chain.

Market Expansion

Expansion into the steel manufacturing sector and increased participation in private sector mining projects.

Strategic Alliances

The company operates in both public and private sectors; specific JV partner names are not disclosed.

🌍 External Factors

Industry Trends

The industry is shifting toward Public-Private Partnerships (PPP) and Hybrid Annuity Models (HAM) in infrastructure, alongside coal mining reforms allowing commercial participation.

Competitive Landscape

Operates in a competitive infrastructure and resources sector against both public and private players.

Competitive Moat

The company's moat is built on a legacy since 1983, a diversified service portfolio (construction, mining, leasing), and a track record of timely execution in complex infrastructure projects.