SG Mart Q4 FY26: A Strong Finish, With the Mix Shifting to Value-Added Steel

SG Mart ended FY26 with its strongest quarter, even as management described the year as operationally difficult due to geopolitical tension and uneven steel supply.

In Q4 FY26, net revenue rose to INR 1,822.8 crore, up 14% year-on-year and 11% quarter-on-quarter. Business EBITDA increased to INR 56.1 crore, and profit after tax grew to INR 41.5 crore. For FY26, SG Mart reported revenue of INR 6,315.3 crore and business EBITDA of INR 136.7 crore.

What stands out is not just the quarter, but the direction of the business. SG Mart is trying to move away from being seen purely as a large steel trader and toward a portfolio where service centres, renewables structures, and profiling products play a larger role.

Q4 performance was driven by execution and mix

Q4 FY26 was the best quarter of the year across revenue and profitability. Business EBITDA margin rose to 3.1% from 1.0% in Q3 FY26, and PAT margin improved to 2.3% from 0.7%.

Management noted that Q4 included an inventory gain of INR 6 crore due to an upward movement in steel prices. They also referred to an inventory loss of around INR 15 to 20 crore in Q3. This matters because it highlights that reported EBITDA can still swing due to commodity price moves, even if the underlying business is becoming more value-added.

A key internal metric also improved. Net working capital days fell to 20 days in FY26 from 30 days in FY25. This helped operating cash flow swing to INR 299.5 crore in FY26 from negative INR 292.4 crore in FY25.

Segment mix: service centres now lead revenue

SG Mart reported FY26 revenue and volume by business vertical. This gives a clear picture of what has changed since FY25.

In FY26, the network of service centres reported revenue of INR 3,214.4 crore on volume of 637 thousand tons. B2B metal trading reported INR 1,956.0 crore on volume of 411 thousand tons. Renewables structures contributed INR 306.5 crore with 40 thousand tons, and steel profiling products contributed INR 45.5 crore with 7 thousand tons.

The service centre vertical is now the largest contributor to revenue, which is a meaningful shift for a company that historically had a larger dependence on B2B trading.

Management also provided useful qualitative color on why this shift matters. In the concall, they described B2B trading as higher revenue but lower margin and more sensitive to steel availability. In contrast, service centres, renewables, and profiling are positioned as more value-added.

To explain the margin profile, management shared EBITDA per ton ranges instead of percentage margins:

Trading: INR 700 to 1,000 per ton Service centres: INR 1,700 to 2,000 per ton Renewables structures: INR 3,000 to 5,000 per ton Steel profiling products: INR 5,000 to 8,000 per ton

This framing suggests the company is building a staircase of profitability, where volumes can scale through service centres while higher spreads come from specialized structures and profiling.

Capacity buildout and capex: the next two years are about execution

SG Mart ended FY26 with net cash of INR 752.7 crore. Debt reduced to INR 231.4 crore from INR 689.0 crore in FY25.

Management linked the business model shift to a heavier capex phase. They stated that capex approval of around INR 600 crore has been taken for the next two years as a minimum, and it may rise if incremental lines are needed for renewables and profile structures.

In terms of deployment, management said the split could be approximately one-third toward building service centres, around half toward acquisition of land parcels, and 15 to 20% toward profiling machines.

Expansion of the service centre network is central to this plan. The investor presentation lists seven operational service centres and names upcoming locations over the next two years: Mandi, Jaipur, Raipur, Hyderabad, Chennai, Patna, Siliguri, Kolkata, and Bhubaneshwar. In the concall, management added that the FY27 exit service centre count could be around 11 to 12.

They also confirmed land acquisition in Ahmedabad, Indore and Kolkata, and said they are scouting in Hyderabad, Chennai and Punjab.

FY27: guidance is conditional, but directional targets are clear

Management explicitly avoided tight near-term guidance because of two external uncertainties.

First is the Middle East disruption. Management said the Dubai service centre operations were impacted and that the situation made it difficult to guide monthly or quarterly performance.

Second is steel supply constraints. They said B2B volumes were lower due to steel shortage, which was aggravated by the geopolitical situation. In renewables, they cited coated steel shortages due to gas-related issues at steel mills.

Despite these uncertainties, management reiterated an earlier guidance range of annualized EBITDA of INR 300 to 350 crore for FY27, with the caveat that prolonged disruption could affect B2B and Middle East operations.

They also provided volume expectations for the two new value-added verticals:

Renewables structures volume of about 130,000 to 150,000 tons in FY27, assuming coated steel supply improves through May and June.

Steel profile structures volume expected to exceed 100,000 tons, with April already reaching a 5,000 to 6,000 tons per month run rate and further ramp-up expected.

Takeaways

SG Mart’s FY26 results show a company trying to change its earnings engine. Service centres have become the largest revenue vertical. Renewables structures and profiling have started contributing and are being positioned as higher EBITDA per ton businesses.

At the same time, the risks are not hidden. Steel supply shortages, inventory-related swings, and Dubai disruption can still affect quarterly outcomes.

The next phase depends on execution of a large capex pipeline, expanding service centres, and scaling renewables and profiles while maintaining the improved working capital discipline seen in FY26.