SG Mart LimitedQ1 FY27 Results & Financial Update

Installed profiling capacity stands at 400,000 tons against a current annualized run rate of 120,000 tons across steel profiles and renewable structures, providing 3.5x to 4x volume growth headroom.

A typical 5 to 6-acre service center requires an initial gross block investment of INR 50 crores and working capital of INR 25-30 crores (total capital employment of INR 75-80 crores), targeting 8,000 tons throughput per month (100,000 tons per annum) and an EBITDA of INR 20 crores.

Service center customers span a wide base from small to large fabricators, capital goods companies, EPC contractors, and white goods sectors. Steel profiles serve construction and infrastructure without customer concentration.

Most product lines are off-the-shelf with short turnaround times of 24 to 48 hours, while the solar structure business maintains a 2 to 3-month project-specific order book.

SG Mart operates 7 fully operational service centers and plans to launch 5 new centers annually to reach 25 centers by 2029-2030, targeting pan-India industrial cluster coverage.

Land has been acquired and construction has begun in Raipur for a centralized backward-integrated cold-rolled and metal coating line, expected to be fully operational in 18 months to boost margins by INR 3,000 to INR 4,000 per ton.

Service center EBITDA stands at INR 1,800 to INR 2,000 per ton, while steel profiles and renewable structures achieve INR 3,000 to INR 4,000 per ton. Backward integration is expected to push specialized coated steel margins beyond INR 5,000 per ton.

Management reaffirmed an absolute EBITDA target of around INR 300 crores for FY27, subject to the absence of severe macroeconomic disruptions.

Other current assets increased due to advance payments made to steel mills to secure stable supplies amidst geopolitical turbulence. Management expects working capital days to improve from 27 days down to 20-25 days over the next 2 years.

By 2030, the company targets exceeding 4 million tons of steel volume, generating revenues of INR 25,000 crores to INR 35,000 crores, and achieving a minimum of INR 1,000 crores in EBITDA.

Management committed that no new business vertical, including potential contract manufacturing initiatives, will dilute company ROCE below 20%.

Management clarified that inventory gains were minuscule (absolute inventory fell from INR 284 crores to INR 209 crores in Q1), making current margins structural rather than one-off, though blended per-ton EBITDA may fluctuate based on the volume mix from service centers.

In response to questions regarding prospective contract manufacturing ventures, management reiterated that any new expansion will maintain strict capital discipline with return profiles comfortably above 20% ROCE.

Management emphasized that SG Mart is uniquely positioned as the only organized, pan-India national player operating standardized service centers and integrated profiling hubs, distinguishing it from local mom-and-pop competitors.