💰 Financial Performance

Revenue Growth by Segment

B2B Metal Trading: 30% of Q2 FY26 revenue (grew 50% QoQ); Service Center Business: 50% of Q2 FY26 revenue; International/Renewable: 17% of Q2 FY26 revenue. Total revenue for FY25 was INR 5,856.17 Cr, up 118.2% YoY from INR 2,682.90 Cr in FY24.

Geographic Revenue Split

India: ~92% of total revenue; UAE: ~8% (INR 473.84 Cr generated by Dubai-based subsidiary SG Marts FZE in FY25).

Profitability Margins

FY25 Net Profit Margin: 1.76% (INR 1,034 Mn PAT on INR 58,561 Mn revenue). PAT grew 69.8% YoY from INR 609 Mn in FY24. Q2 FY26 PAT was INR 265 Mn, up 66% YoY but down 18% QoQ due to steel price declines and upfront branding costs.

EBITDA Margin

EBITDA Margin: 1.8% in FY25, down from 2.3% in FY24. The moderation was driven by lower steel prices and increased expenses related to business expansion. H1 FY26 EBITDA increased 61% YoY despite margin pressure.

Capital Expenditure

Planned Capex: INR 170-200 Cr for the expansion of service centers and the newly started renewable structures business.

Credit Rating & Borrowing

Credit Rating: CRISIL Stable. Interest coverage ratio: 8.04x in FY24. Sanctioned bank limits of INR 600 Cr were only 26% utilized as of June 2024.

⚙️ Operational Drivers

Raw Materials

Steel (HR coils, CTL HR coils, and TMT bars) represents the primary cost of goods sold, estimated at >90% of revenue for the trading segment.

Import Sources

UAE (Dubai) via SG Marts FZE; approximately 20% of products are imported to serve international and domestic demand.

Key Suppliers

Major steel companies (specific names not disclosed in available documents). Top supplier accounts for ~15% of total purchases.

Capacity Expansion

Current: 7 operational service centers (5 owned, 2 leased). Planned: Adding 1 in Jaipur in Q4 FY26 and 4-6 additional centers annually to reach dozens pan-India within 3-4 years.

Raw Material Costs

Raw material costs are highly sensitive to steel prices, which declined by ~INR 3,000 per ton in Q2 FY26, leading to inventory losses and margin compression.

Logistics & Distribution

Distribution network includes 220+ dealers and 402 vendors serving 2,328 customers pan-India.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Expansion of the service center network (adding 4-6 annually), scaling high-margin renewable and open profile structures, and transitioning TMT bars to a royalty-based franchisee model (INR 500-600 per ton) to reduce capital employment.

Products & Services

HR coils, CTL HR coils, TMT bars, renewable structures, open profile structures, and over 1,700 building products.

Brand Portfolio

SG Mart, SG.

New Products/Services

Renewable structures and open profile structures, which offer higher spreads and insulate the company from short-term steel price volatility.

Market Expansion

Targeting pan-India presence with a new service center in Jaipur (Q4 FY26) and dozens more planned over the next 3-4 years.

Strategic Alliances

TMT Franchisee partners who produce and sell under the SG brand in exchange for royalty payments.

🌍 External Factors

Industry Trends

Growing B2B construction materials marketplace; shift toward organized players providing one-stop solutions for construction needs.

Competitive Landscape

Intense competition from emerging B2B platforms challenges market share and pricing flexibility.

Competitive Moat

Durable advantage through a distribution network of 220+ dealers and 2,328 customers, providing a one-stop solution for 1,700+ products. Sustainability is driven by scale and efficient working capital (22 days).

Macro Economic Sensitivity

India's FY26 GDP growth projected at 6.3%–6.8% supports demand; GST collections up nearly 10% reflect healthy construction activity.

Consumer Behavior

Increasing demand for organized B2B marketplaces that offer product variety and reliable supply chain fulfillment.

Geopolitical Risks

Geopolitical risks and trade disruptions are cited as measured outlook factors for FY26 growth.

⚖️ Regulatory & Governance

Industry Regulations

Frequent changes in construction-related regulations pose risks to operational stability and financial performance.

Taxation Policy Impact

Effective tax rate is approximately 25% based on FY25 PBT of INR 137.32 Cr and PAT of INR 103.4 Cr.

⚠️ Risk Analysis

Key Uncertainties

Steel price volatility (High impact); intense competition in trading (Low margin risk); and potential IT system failures/cyber-attacks.

Geographic Concentration Risk

Revenue is primarily concentrated in India (92%), with a growing presence in the UAE (8%).

Third Party Dependencies

Moderate dependency on top suppliers (15% of purchases) and major steel companies for product sourcing.

Technology Obsolescence Risk

Over-reliance on technology for the B2B marketplace poses threats from system failures; mitigated by backup protocols and disaster recovery plans.

Credit & Counterparty Risk

Low risk; debtor days are less than 10 and top customers represent only 5.3% of revenue.