Concall AI

SG Mart Limited — Q3 FY26 earnings call

Call held 23 Jan 2026

Company page: SG Mart share price, financials & guidance record

Management summary

SG Mart reported a challenging Q3 FY26 with a reported EBITDA of ₹17 crores, impacted by a ₹20 crore inventory loss from declining steel prices. However, the underlying business EBITDA was ₹40 crores, with sales volume growing 9% QoQ. Management expressed confidence in achieving ₹60 crores business EBITDA in Q4 FY26 and outlined an aggressive FY27 target of ₹350 crores+ EBITDA, driven by service center expansion and growth in high-margin renewable and new structure businesses.

Highlights

Sales volume increased 9% quarter-on-quarter in Q3 FY26, indicating ramp-up in B2B Metal Trading and renewable structure businesses.
Achieved ₹40 crores business EBITDA in Q3 FY26, with a target to reach ₹60 crores in Q4 FY26.
Projected FY26 EBITDA of ₹140 crores represents a 35-40% growth over FY25's ₹103 crores.
Ambitious FY27 EBITDA target of ₹350 crores+, driven by expansion in service centers and growth in renewable/new structure businesses.
Working capital days stood at 27 as of December 31, 2025, expected to improve by March 2026.

Concerns

Reported EBITDA for Q3 FY26 was ₹17 crores, below expectations, primarily due to an inventory loss of ₹20 crores.
Inventory loss of ₹20 crores incurred in Q3 FY26 due to softness and sharp correction in steel prices (₹2,500-3,000 per ton).
EBITDA per ton for Service Centre business was lower at ₹1,500 (vs. general ₹2,000) and B2B Metal Trading at ₹500-600 (vs. expected ₹900-1,000) due to declining steel prices and discounts.
Minor business expenses of ₹2-3 crores incurred in Q3 FY26 to build renewable structure and open profile businesses.
Delay in Jaipur Service Center operations, now expected by mid-March, due to excessive rains impacting civil work.

Key financials

01 Reported EBITDA ₹17 Cr
02 Business EBITDA ₹40 Cr
03 Sales Volume Growth 9% +9%QoQ
04 Working Capital Days 27 days
05 Cash on Books ₹787 Cr
06 Interest Cost ₹17 Cr

What they filed

Q1 FY27: revenue up 14.4%, net profit up 43.8% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,793	1,335	1,595	1,144	1,704 −5%	1,644 +23%	1,823 +14%	1,309 +14%
Expenses	1,778	1,313	1,558	1,108	1,676	1,628	1,767	1,250
EBITDA	15	22	37	36	28 +87%	17 −23%	56 +51%	59 +64%
Margin	1%	2%	2%	3%	2%	1%	3%	5%
Other income	20	26	20	20	19	18	12	10
Interest	13	10	14	12	12	17	10	6
Depreciation	0	0	1	2	2	4	4	4
Profit before tax	22	37	42	43	33 +50%	14 −62%	54 +29%	58 +35%
Tax rate	26%	25%	21%	24%	20%	21%	23%	22%
Net profit	16	28	33	32	27 +69%	11 −61%	41 +24%	46 +44%
EPS	1.42	2.50	2.95	2.56	2.11	0.85	3.29	3.62

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Volume

3,05,000 tons Total

Service Centre Business 1,63,000 tons 53.4%
B2B Metal Trading 1,25,000 tons 41.0%
Renewable Structures 17,000 tons 5.6%

Capital allocation

high confidence

Capex Capex disclosed
- Land acquisition for 10 new service center locations
- Building capacities for new structures (residential rooftop, cable trays, purlins, racking)
- Purchase machinery for 10 service centers
already started identifying 10 more locations for which the land acquisition work has started. So, by end of FY'28, early FY'29, we shall have all 20 service centres up and running. (Page 4); we may have to pay advances for buying of machinery. (Page 10)
Debt Gross ₹134 Cr
- Repayment Short-term borrowings reduced from ₹700 crores in FY25 to ₹130 crores in December 2025. ₹570 Cr
So, the short-term borrowings have reduced drastically from I think about Rs. 700 crores in FY'25 to 130 now in December (Page 8); And plus there is a gross debt on the books, which you can see around Rs. 134 crores. (Page 8)
Liquidity Cash ₹787 Cr Cash on books generates quarterly interest income of ₹15-17 crores.

Now, we have Rs. 787-Rs. 790 crore cash. (Page 10); we have Rs. 800 crores of cash on the books, which gives us around 15 crores-16 crores-17 crores of quarterly interest income also. (Page 8)

Guidance & targets

Profitability

Business EBITDA Profitability · Q4 FY26 · High confidence ₹60 crores

So, we are very confident that our business EBITDA of Rs.40 crores in Q3 will go up to Rs. 60 crores of business EBITDA in Q4.

— Anubhav Gupta
Full Year EBITDA Profitability · FY26 · High confidence ₹140 crores

Previously ₹103 crores → ₹140 crores

So, we shall close FY'26 with around Rs. 140 crores of full year EBITDA versus Rs. 103 crores last year, FY'25.

— Anubhav Gupta
Full Year EBITDA Profitability · FY27 · High confidence ₹350 crores+

So, all in all our business plan for FY'27 stands at around Rs.350 crores plus EBITDA.

— Anubhav Gupta
Quarterly EBITDA Run Rate Profitability · FY27 · High confidence ₹80-85 crores

how we are going to take this to Rs. 60 crores in Quarter 4 and eventually to Rs. 80 crores-Rs. 85 crores quarterly run rate in FY'27.

— Anubhav Gupta
Full Year PAT Profitability · FY27 · Medium confidence ₹250 crores

All right. We will be around Rs. 250 crores PAT.

— Anubhav Gupta
Service Centre EBITDA Spread Profitability · Q4 FY26 · High confidence ₹2,000 per ton

Previously ₹1,500 per ton → ₹2,000 per ton

So, Quarter 4, the volume will remain same around 160,000 tons but the EBITDA spread will improve to Rs. 2,000 per ton which is the real margin for the business.

— Anubhav Gupta
Renewable Structures EBITDA Spread Profitability · Q4 FY26 · High confidence ₹4,000 per ton

So, now all the costs got incurred already. So, the EBITDA spreads will be to the tune of around Rs. 4,000 per ton.

— Anubhav Gupta
New Structures (Trade Route) EBITDA Profitability · Q4 FY26 · High confidence ₹6,000-7,000 per ton

So, Q4 and we are making around Rs. 6,000-Rs. 7,000 per ton here because of brand premium.

— Anubhav Gupta
Service Centre EBITDA (India) Profitability · FY27 · High confidence ₹150 crores

assuming Rs. 2,000 per ton EBITDA which we are generating, we will get Rs. 150 crores EBITDA from the service centers.

— Anubhav Gupta
Dubai Service Centre EBITDA Profitability · FY27 · High confidence ₹50 crores

So, we will get around Rs. 50 crores for the full year. We get Rs.10 crores-Rs. 12 crores per quarter. So, this translates to Rs. 50 crores for the full year from the Dubai service center.

— Anubhav Gupta
Total Service Centre EBITDA Profitability · FY27 · High confidence ₹200 crores

So, the total service center business will give us Rs. 200 crores of EBITDA.

— Anubhav Gupta
B2B Metal Trading EBITDA Spread Profitability · FY27 · High confidence ₹800-900 per ton

and here the EBITDA spread will be 800-900.

— Anubhav Gupta
B2B Metal Trading EBITDA Profitability · FY27 · High confidence ₹50 crores

So, Rs. 50 crores will come from B2B business, B2B Metal Trading business.

— Anubhav Gupta
Structures EBITDA Profitability · FY27 · High confidence ₹120-150 crores

400,000 tons of structures with EBITDA of around Rs. 4,000 to Rs. 5,000 per ton, which can give another Rs. 120-Rs. 150 crores EBITDA.

— Anubhav Gupta

Volume

Service Centre Volume Volume · Q4 FY26 · High confidence 160,000 tons

So, Quarter 4, the volume will remain same around 160,000 tons but the EBITDA spread will improve to Rs. 2,000 per ton which is the real margin for the business.

— Anubhav Gupta
Renewable Structures Volume Volume · Q4 FY26 · High confidence 25,000 tons

Previously 17,000 tons → 25,000 tons

So, in Quarter 3, we did around 17,000 tons of sales volume. In Quarter 4, based on the current order book, we will be doing around 25,000 tons

— Anubhav Gupta
New Structures (Trade Route) Volume Volume · Q4 FY26 · High confidence 10,000 tons

Previously 0 tons → 10,000 tons

So, in Q3, there was no volume from sale of these structures through trade route but in Quarter 4, we are expecting 10,000 tons of volume from these products.

— Anubhav Gupta
Full Year Service Centre Volume (India) Volume · FY27 · High confidence 750,000 tons

So, overall we may get around 750,000 tons of full year volume from service centers

— Anubhav Gupta
B2B Metal Trading Volume Volume · FY27 · Medium confidence 500,000 tons

We are being very, very conservative. So, we are taking the same run rate what we are doing, Rs.125,000 tons per quarter. So, full year will be Rs. 500,000 tons

— Anubhav Gupta
Solar Structures Volume Volume · FY27 · High confidence 180,000 tons

For solar structures, we have assumed volume of around 180,000 tons for full year, which means run rate of 13,000-14,000 tons per month, which we are confident of.

— Anubhav Gupta
Other Structures Volume (Trade Segment) Volume · FY27 · High confidence 200,000 tons

And the profiles for the trade, the multiple other products for the trade segment, here we will do around 200,000 tons.

— Anubhav Gupta

Capacity

Annual Capacity for Solar Structures Capacity · FY27 · High confidence 250,000 tons

So, on and all we have developed Rs.250,000 tons of annual capacity for solar structures

— Anubhav Gupta
Annual Capacity for Other Structures Capacity · FY27 · High confidence 250,000 tons

and Rs. 250,000 tons capacity for the other structures, which we will sell through trade channel.

— Anubhav Gupta

Working Capital

Working Capital Days Working Capital · March 2026 · High confidence Better than 27 days

Previously 27 days → Better than 27 days

So, by March, it will be better than 27 days, what we reported.

— Anubhav Gupta

Growth

Earnings CAGR Growth · Long-term · High confidence 50%

So, we continue to maintain 50% earnings CAGR, which is our long-term guidance.

— Anubhav Gupta

Service Centre Expansion

Operational Service Centres Service Centre Expansion · End FY28 / Early FY29 · High confidence 20 (India) + 1 (Dubai)

From 4 (India) + 1 (Dubai) today

So, by end of FY'28, early FY'29, we shall have all 20 service centres up and running.

— Anubhav Gupta

What to watch in Q4 FY26

Q4 FY26 Business EBITDA achievement

next quarter

Current ₹40 crores (Q3 FY26)

Target ₹60 crores

Why it matters

This is a key short-term target that management has expressed high confidence in, crucial for validating the overall growth trajectory.

So, we are very confident that our business EBITDA of Rs.40 crores in Q3 will go up to Rs. 60 crores of business EBITDA in Q4.

Risks & concerns

Steel price correction/volatility
medium

Inventory loss of ₹20 crores in Q3 due to sharp correction in steel prices; management aims to mitigate by keeping minimum inventory levels.

Management acknowledged
Softness in demand
low

Softness in demand in Q3 led to offering discounts to customers, impacting EBITDA spreads.

Management acknowledged
Geopolitical environment
low

Geopolitical events could lead to rising commodity prices, but management believes a larger absolute EBITDA will absorb such impacts.

Management acknowledged
Delay in Service Center operations
low

Jaipur Service Center operations delayed by a couple of months due to excessive rains, now expected by mid-March.

Management acknowledged

Q&A highlights

8 direct

Delay in Jaipur Service Center operations and overall service center expansion strategy Direct

So, it is just delayed by a couple of months because of excessive rains in that area. The rains lasted up to November. Civil work was impacted for a couple of months. It's back on track and we should be able to start operations by mid of March.

Clarifies the reason for the delay in a key expansion project and reaffirms the new timeline, while also detailing the aggressive expansion plan for 20+ service centers.

Asked by Vivek Patel

EBITDA per ton trajectory and blended vs. segment-wise profitability Direct

So, I think, one should not look at the blended EBITDA per ton. What one should look at is that how each business vertical is performing. Although, I mean, it may appear like around Rs. 1800-Rs. 1900 per ton on blended basis, but there is a lot of scope to increase margins in the Renewable Structures and the other profile structures...

Management emphasizes focusing on segment-specific EBITDA per ton and ROCE rather than blended figures, providing detailed targets for each business vertical (Service Center India: ₹2,000; Dubai: ₹5,000+; Solar OEM: ₹3,000-5,000; Profile/Trade-led: ₹5,000-6,000; B2B Trading: ₹1,000).

Asked by Vivek Patel

Breakup of interest cost and short-term borrowings Direct

So, 50% is because of bill discounting and 40% will be for import of steel and rest would be like bank charges, etc.

Provides clarity on the components of interest cost, linking it to operational financing needs like bill discounting and steel imports, and confirming the reduction in short-term borrowings.

Asked by Rahul Kumar

Renewables structure business order book status and growth Direct

Yes. So, order book is Rs. 300 crores plus, right, which is enough to do volume of around 25,000 tons for the Quarter 4. So, we are fully covered for that.

Quantifies the current order book for renewable structures and its coverage for Q4 volume, highlighting the impact of steel price increases on new order finalization.

Asked by Rahul Kumar

Confidence in Q4 FY26 EBITDA target of ₹60 crores despite steel downstream slowdown Direct

So, two things. One, that we already achieved Rs. 40 crore business EBITDA in Q3. So, this gives us a lot of confidence for Q4, number one. Number two, B2B metal business and service center business. We are assuming flattish sales volume. We are not factoring in any increase in the sales volume sequentially.

Management explains the confidence in Q4 EBITDA target by improved margins in existing businesses and significant volume and high-margin contribution from new products, rather than relying on overall market demand growth.

Asked by Aman Soni

Impact of business EBITDA on PAT, especially with decreasing other income due to cash usage for capex Direct

So, interest cost will be similar to the other income. And tax rate will be slightly lower because Dubai is also contributing. So, growth-wise, it will match, yes. But because see what is happening is that business is using cash to build capacities to open service centers. So, the other income will slowly gradually keep on going down.

Clarifies that while other income may decrease due to cash deployment for capex, the overall flow from EBITDA to PAT is expected to remain similar, with tax benefits from Dubai operations.

Asked by Aman Soni

Visibility for achieving the FY27 solar business volume target of 180,000 tons from current 17,000 tons in Q3 Direct

So, Vishal, this 17,000 ton which we did, we only did it from one plant in Ghaziabad. Now, our Raipur plant has started and our Pune plant is also starting in February. So, our capacity will be three times of what it is right now, number one.

Management explains the path to significant volume growth in solar structures through new plant commissioning (Raipur, Pune), existing order book, and expected market demand, aiming for 20-25% market share.

Asked by Vishal Mehta

Geopolitical environment, steel price volatility, and risk mitigation strategies for EBITDA guidance Direct

So, in risk mitigation, only thing what we can do is keep minimum inventory levels, right. We don't want to speculate or take bets on steel price movements, because that is not part of our business plan, never was, never will be.

Management acknowledges the risks of steel price volatility and geopolitical impacts, stating their strategy is to maintain minimum inventory levels rather than speculating on price movements, and expresses confidence that a larger absolute EBITDA will cushion impacts.

Asked by Rajeev Bhatt

3 min read 6 chapters

Detailed narrative

Q3 FY26 Performance and Inventory Impact

SG Mart reported a Q3 FY26 EBITDA of ₹17 crores, which was below expectations. This was primarily due to an inventory loss of ₹20 crores caused by a sharp correction in steel prices of ₹2,500-3,000 per ton. Despite this, the underlying business EBITDA stood at ₹40 crores, and sales volume increased by 9% quarter-on-quarter, indicating a ramp-up in both B2B Metal Trading and renewable structure businesses.

Q4 FY26 Outlook and Business Segment Projections

Management is confident in achieving a business EBITDA of ₹60 crores in Q4 FY26. This is expected to be driven by improved EBITDA spreads in Service Centre business (₹2,000 per ton) and B2B Metal Trading (₹900-1,000 per ton). Renewable Structures volume is projected to increase to 25,000 tons (from 17,000 tons in Q3) with an EBITDA spread of ₹4,000 per ton. Additionally, new structures for residential rooftop, cable trays, and purlins are expected to contribute 10,000 tons of volume with high EBITDA of ₹6,000-7,000 per ton in Q4.

FY27 Growth Strategy and Financial Targets

SG Mart targets a full-year EBITDA of ₹350 crores+ for FY27, with a quarterly run rate of ₹80-85 crores. This growth will be fueled by the expansion of service centers, with 5 new centers becoming operational in H1 FY27, contributing to a total of 750,000 tons volume and ₹150 crores EBITDA from India. The Dubai service center is expected to contribute ₹50 crores EBITDA. B2B Metal Trading is projected to yield ₹50 crores EBITDA from 500,000 tons volume. Renewable and other structures are targeted to contribute ₹120-150 crores EBITDA from 350,000-400,000 tons volume.

Capital Structure and Liquidity Management

The company's short-term borrowings have significantly reduced from ₹700 crores in FY25 to ₹130 crores by December 2025, with gross debt on books at ₹134 crores. Interest cost for Q3 FY26 was ₹17 crores, with 50% attributed to bill discounting and 40% to steel imports. SG Mart maintains a healthy cash balance of ₹787-790 crores, which generates ₹15-17 crores in quarterly interest income. This liquidity is being utilized for CAPEX, including land acquisition and machinery for new service centers.

Service Center Expansion and Product Diversification

SG Mart plans to have 20 service centers in India and 1 in Dubai by end of FY28/early FY29. Five new service centers (Punjab, Jaipur, Kolkata, Indore, Ahmedabad) will start contributing from H1 FY27. The company is also diversifying its product offerings beyond HR coils to include cut-to-length metal sheets, embossed specialized checkered sheets, and new structures like residential rooftop, cable trays, slotted angles, and purlins, leveraging its distribution network and APL Apollo brand for strong margins.

Risk Mitigation and Market Dynamics

Management acknowledges the risk of steel price volatility, which caused a ₹20 crore inventory loss in Q3. Their strategy to mitigate this is to maintain minimum inventory levels and avoid speculating on price movements. They believe that as the absolute EBITDA grows (targeting ₹350 crores+ in FY27), the impact of steel price fluctuations on the P&L will diminish. The company also noted that the Indian government's anti-dumping duties on steel have reduced reliance on imports for India, with Dubai operations being the primary importer.

This is an AI-generated summary of a publicly available earnings call transcript.

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