SG Mart Navigates Q3 FY26 Headwinds, Eyes Strong Rebound and Ambitious FY27 Growth

SG Mart Limited, a prominent B2B marketplace for construction materials, recently announced its financial and operational performance for the quarter and nine months ended December 31, 2025 (Q3 FY26). While the reported numbers for the quarter reflected some headwinds, management provided a clear and confident outlook, highlighting underlying business strength and ambitious growth plans for the coming periods. The company reported a net revenue of Rs. 1,644.4 crore for Q3 FY26. However, the reported Business EBITDA stood at Rs. 16.7 crore, which was below expectations. This was primarily attributed to an inventory loss of approximately Rs. 20 crore, caused by a sharp correction in steel prices and a general softness in demand during October and November 2025. Despite this, management emphasized that the actual business EBITDA, excluding these transient factors, was closer to Rs. 40 crore for the quarter.

SG Mart's business model is built on four key pillars: Service Centres, B2B Metal Trading, Renewables & Structures, and new Open Profile Structures. In Q3 FY26, the Network of Service Centres was the largest contributor to revenue, bringing in Rs. 779.7 crore (47.42%), followed by B2B Metal Trading at Rs. 546.6 crore (33.24%). Distribution products contributed Rs. 180.4 crore (10.97%), while the rapidly growing Renewables & Structures segment added Rs. 137.0 crore (8.33%). The TMT segment, operating on a royalty-based model, contributed Rs. 0.7 crore (0.04%). The company's sales volume increased by 9% quarter-on-quarter, indicating underlying operational traction despite pricing pressures. EBITDA spreads were impacted across segments due to declining steel prices, but with steel prices stabilizing, management anticipates a significant improvement in Q4 FY26. The company's customer base has expanded to over 2,340 customers and 438 vendors, showcasing its robust distribution network and pan-India reach.

SG Mart is not just weathering the storm but strategically positioning itself for accelerated growth. The company is aggressively expanding its service centre network, with plans to make 5 new centres operational in H1 FY27 in key locations such as Punjab, Jaipur, Kolkata, Indore, and Ahmedabad. The long-term vision is to establish 20+1 service centres by FY28 or early FY29. This expansion is expected to significantly boost volumes and contribute substantially to EBITDA, with Indian service centres projected to yield Rs. 2,000 per ton EBITDA and the Dubai centre over Rs. 5,000 per ton. The total service centre business is guided to contribute Rs. 200 crore EBITDA in FY27.

In a significant move towards diversification, SG Mart is launching new products in the high-growth Renewables & Structures segment. This includes open sections for residential rooftop solar applications, cable trays for construction, purlins, and racking structures. The residential rooftop structure, launched in late January, has already shown encouraging results, leveraging the group's robust distribution network and the APL Apollo brand. These new products are expected to add approximately 10,000 tons of additional volume in Q4 FY26 with high margins (Rs. 5,000-Rs. 6,000 per ton) due to brand premium. The overall structures business (solar and other) is forecast to achieve 350,000-400,000 tons in FY27, contributing Rs. 120-Rs. 150 crore in EBITDA.

Management is highly optimistic about the future, projecting a strong rebound with Business EBITDA expected to reach Rs. 60 crore in Q4 FY26. For the full financial year FY27, the company targets an impressive Rs. 350 crore plus in EBITDA and Rs. 250 crore in PAT. This confidence is underpinned by the stabilization of steel prices, the ramping up of new business verticals, and the operational leverage from the expanding service centre network. SG Mart is also proactively managing risks, such as steel price volatility, by maintaining minimum inventory levels and adjusting sales strategies to preserve margins. The company's strong liquidity, with Rs. 742.2 crore net cash as of December 31, 2025, provides ample capital for its ambitious CAPEX and growth initiatives. The promoter group's recent open market purchase of 3.5 million shares in September 2025 further underscores their confidence in the company's long-term trajectory. SG Mart's strategic clarity, disciplined execution, and focus on high-growth segments position it for sustained growth and enhanced shareholder value in the coming years.