SAGARDEEP - Sagardeep Alloys

📊 NSE: SAGARDEEP 🏢 Mining / Minerals / Metals 📅 Last Updated: 12/14/2025 12:38

💰 Financial Performance

Revenue Growth by Segment

Total consolidated revenue from operations grew by 25.23% YoY, increasing from INR 99.78 Cr in FY24 to INR 124.95 Cr in FY25. The growth was driven by a significant 138.23% increase in the purchase of stock-in-trade (INR 20.90 Cr vs INR 8.77 Cr), indicating a shift towards higher trading volumes.

Profitability Margins

Net Profit Margin improved from 0.77% in FY24 to 1.54% in FY25. Gross Margin (calculated as Revenue minus Cost of Materials, Stock-in-Trade, and Inventory changes) contracted slightly from 5.66% to 4.86%, suggesting higher procurement costs relative to sales prices.

EBITDA Margin

EBITDA margin for FY25 stood at approximately 1.71% (INR 2.14 Cr). Core profitability improved as Profit Before Tax (PBT) surged by 170.59% YoY to INR 2.57 Cr from INR 0.95 Cr, largely aided by a 217% increase in Other Income (INR 2.30 Cr).

Capital Expenditure

The company spent INR 0.048 Cr (INR 4.81 Lakhs) on the purchase of property, plant, and equipment in FY25, a significant reduction from INR 1.11 Cr in FY24. It also realized INR 2.04 Cr from the sale of PPE.

Credit Rating & Borrowing

Borrowing costs (Finance Costs) increased by 13.85% YoY to INR 1.22 Cr in FY25. The interest and finance costs in the cash flow statement were reported at INR 1.15 Cr.

⚙️ Operational Drivers

Raw Materials

Copper and copper-based alloys (implied by company name and 'alloys' context). Cost of materials consumed represents 77.7% of total revenue (INR 97.12 Cr).

Raw Material Costs

Raw material costs (materials consumed + stock-in-trade) totaled INR 118.02 Cr, representing 94.45% of revenue. Procurement strategies involve a mix of direct material consumption and stock-in-trade purchases, with the latter growing 138% YoY.

Manufacturing Efficiency

Depreciation and amortization expenses remained stable at INR 0.65 Cr (0.52% of revenue), suggesting consistent utilization of the existing asset base.

Logistics & Distribution

Other expenses, which include distribution and administrative costs, remained flat at INR 2.63 Cr despite the 25% revenue growth, indicating improved operational leverage.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

The company is focusing on expanding its trading business, as evidenced by the 138% jump in stock-in-trade purchases. It also maintains a subsidiary that contributed INR 22.24 Cr to the annual revenue. Growth is supported by a 12-month operating cycle and a focus on copper-based alloy products.

Products & Services

Copper pipes, tubes, rods, and various copper-based alloys used in industrial applications.

Brand Portfolio

Sagardeep Alloys.

Market Expansion

The company operates through its holding structure in Ahmedabad, Gujarat, and manages at least one subsidiary to expand its market reach.

🌍 External Factors

Industry Trends

The industry is moving toward stricter digital compliance, with the company adopting audit trail features in its accounting software. Future outlook is cautious given the sharp revenue drop reported in the September 2025 half-year results (INR 13.21 Cr).

Competitive Landscape

The presence of other players like Charms Industries and Jyoti Resins in the same reporting ecosystem suggests a crowded market for industrial materials in the Gujarat region.

Competitive Moat

The company's moat is based on its established presence in the alloy segment and its internal control systems, though the low net margin (1.54%) indicates a highly competitive environment with low switching costs.

Macro Economic Sensitivity

Highly sensitive to industrial production indices and metal price volatility, as raw materials constitute over 94% of the cost structure.

Consumer Behavior

Industrial demand for alloys is cyclical and tied to infrastructure and manufacturing output.

Geopolitical Risks

Trade barriers or global supply chain disruptions in the copper market would directly impact the availability and cost of raw materials.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to the Companies Act 2013, Indian GAAP (Ind AS), and Schedule III requirements for asset/liability classification. The company must also comply with audit trail regulations under Rule 3(1) of the Companies (Accounts) Rules.

Taxation Policy Impact

The effective tax rate for FY25 was approximately 24.8%, with current tax at INR 0.60 Cr and deferred tax at INR 0.04 Cr.

Legal Contingencies

The company has disclosed the impact of pending litigation in Note 45 of the Consolidated Financial Statements. Specific INR values for these contingencies were not provided in the snippets.

⚠️ Risk Analysis

Key Uncertainties

Potential for material misstatement due to fraud or management override of internal controls. The sharp decline in H1 FY26 revenue (INR 13.21 Cr) presents a significant business continuity uncertainty.