SG Mart Limited — Q1 FY27 earnings call

So coming to the first part of it, the customer concentration is very, very wide in SG Mart's case. You got to understand the customer base as per the product category. So for example, number 1 product category is service centers. ... Then solar structures, yes, this business has a limited number of EPC companies and independent power producers who are present into renewable solar structure -- solar business. So here, it will be like top 20, 30 EPC/IPPs, which we would be catering to. But then again, right now, the solar structure business is contributing very little to the overall revenue of SG Mart. So again, customer base is very wide.

Clarifies that customer concentration is low across most segments, with solar structures being the only exception, but its contribution to overall revenue is currently small.

Asked by Rehan Saiyyed

So see, I mean, again, we need to break up execution risk into four separate business verticals. Service centres, we wish to have 25 number in next three years, right? So we already have seven. We have already started working on seven new centres. So 12 centres will be up and ready, say, in next six months to one year. ... And in next 18 months, the backward integrated line will be fully operational. Here also, the group has lengthy experience in putting up such lines. So given the project has already kick started, execution risk doesn't play much of a role here.

Management provides a detailed breakdown of how execution risks are being mitigated across service center expansion, backward integration, and new product launches, leveraging existing experience and infrastructure.

Asked by Rehan Saiyyed

Yes, just to add to it, like inventory gain is very, very minuscule because if you look at the inventory -- absolute inventory, like in FY26, March -- 31st March 2026, the inventory lying in the books was INR284 crores, and in quarter 1 by 30th June, it fell to INR209 crores. So despite high steel prices, our absolute inventory has reduced significantly, okay? ... Right. So I will not guide EBITDA percentage right now, Vishal, like quarter-on-quarter because in next quarter, say, in quarter 2, if the service centre business picks up, which was pretty slow in quarter 1 and here, the margins are like INR1,800 to INR2,000 per ton. So if revenue mix from service centre business increases, then my blended EBITDA per ton may come down, okay? But absolute EBITDA will definitely grow because the steel profile business and renewable business will do more volume than it did in Q1 because every quarter, you will see the ramp-up, okay?

Management clarifies that margin improvement was partly due to better pricing and product mix, not inventory gains. While absolute EBITDA growth is expected, percentage margins might fluctuate due to changing business mix, particularly if lower-margin service center volumes increase.

Asked by Vishal Mehta

So normally, it takes around INR50 crores to put up a service center of this size, which I mentioned. ... So INR50 crores plus INR25 is INR75 crores INR75 crores to INR80 crores of total capital employment. And if we do sorry, 8,000 tons per month, that means 100,000 tons per annum with INR2,000 per ton EBITDA. So we will get EBITDA of INR20 crores on a capital employment of around INR75 crores to INR80 crores. So this is the economics, which we work on.

Provides granular financial details for each service center, including investment, throughput, revenue, and EBITDA, demonstrating the profitability and capital efficiency of the model.

Asked by Sneha

So again, our current assets have gone up. If you look at our balance sheet, what we have given, the other current assets have increased to like INR211 crores from INR188 crores. So this is again the advances what we pay to the steel mill. Now in last 4, 5 months, because of all the geopolitical turbulence what we have seen, I mean, we always want to have a credible source of steel. ... That's why we are confident that the current working capital days of 27, we are going to come down for sure. We'll settle between 20 to 25 days in next 2 years.

Explains the temporary increase in working capital due to strategic advances for steel supply amidst geopolitical uncertainty, and outlines a clear plan to reduce working capital days in the medium term.

Asked by Rahul Kumar

So see, I mean, we had mentioned like -- in quarter 4 call, okay, we had mentioned around INR300 crores for FY27 in terms of absolute EBITDA. I think -- I mean, given the momentum what we have got in quarter 1 and assuming there is no such drastic deterioration in macro environment because of ongoing geopolitical tension, we should be able to do that unless the only caveat is some disruption at macro level.

Reiterates the FY27 EBITDA target of INR 300 crores, providing a key financial benchmark for the year, while also flagging macro risks.

Asked by Garvit Goyal

We believe that with more than 4 million tons in steel volume, the revenue could be like INR25,000 crores to INR35,000 crores by 2030 and with minimum INR1,000 crores EBITDA. ... Okay. And whether -- okay. Means EBITDA margin of something 3% to 4%? That's right.

Provides a clear long-term financial vision for 2030, including ambitious revenue, EBITDA, and volume targets, which helps investors understand the company's growth trajectory.

Asked by Akash Srivasthav

So again, here, we need to go business by business. In service centers, we are the only company which is setting up service centers at national level. ... Now here, my strength is that -- what I would say, my USP is that, I'm having profiling machines pan-India at my service centers, plus we're going to do backward integration for coated steel. So again, it puts me ahead of any of my competitor.

Highlights SG Mart's unique competitive advantages, such as its pan-India service center network, backward integration plans, and multi-product approach, differentiating it from smaller regional players.

Asked by Pavan Kumar