SG Mart Ltd Q4 Profit Rises to ₹331 Million, Approves ₹6 Billion Capex Plan for Capacity Expansion

Image Source: Deccan Herald

SG Mart Ltd, a leading B2B construction materials and steel trading platform, reported robust financial results for the March 2025 quarter, with consolidated revenue from operations reaching ₹15.95 billion and net profit at ₹331.4 million. The company’s board has also approved a major capital expenditure plan of ₹6 billion to ramp up capacity and fuel its next phase of growth.

Strong Q4 Financial Performance:

Revenue: SG Mart posted consolidated revenue from operations of ₹15.95 billion for the March 2025 quarter, maintaining strong momentum in a competitive market.
Net Profit: Net profit (PAT) for the quarter stood at ₹331.4 million, reflecting healthy operational efficiency and improved margins.
Year-on-Year Growth: The company has demonstrated significant year-on-year revenue growth, with Q4 FY25 revenue up sharply from ₹7.48 billion in Q4 FY24, nearly doubling its topline.

Capex Plan for Expansion:

The board approved a ₹6 billion capital expenditure plan aimed at increasing processing and storage capacity, expanding service centers, and strengthening the company’s distribution network.
The investment will support the addition of new service centers in key cities such as Pune, Raipur, and Dubai, with a target to reach 101 centers by FY30, up from just two currently operational.
The capex will also be deployed toward technology upgrades and working capital to support higher trading volumes and faster inventory turnover.

Business Model and Strategic Advantages:

SG Mart operates on a cash-and-carry model, which minimizes credit risk and enables a lean working capital cycle of 10–15 days.
The company leverages the extensive distribution network of APL Apollo Group, giving it access to over 1,500 distributors and 50,000 dealers nationwide.
Its focus on processed steel and value-added services is expected to yield higher margins (3–4%) and drive profitability as service center volumes grow.

Market Position and Outlook:

SG Mart is positioned to capture a significant share of India’s fragmented steel and construction material market, projected to reach ₹8 trillion by FY27.
With a robust expansion strategy and strong parental support, the company aims to achieve revenue of ₹181 billion by FY27 and 10 million tons in annual trading volume by FY30.
The company’s return on capital employed (ROCE) is targeted to rise to 25–30% over the next three years, underpinned by economies of scale and operational efficiency.

Insight

SG Mart’s Q4 results and aggressive capex plan reflect its ambition to become India’s largest organized B2B platform for construction materials and steel. By doubling down on capacity, technology, and network expansion, the company is poised for rapid volume growth and margin improvement. Its asset-light, cash-and-carry model and strategic use of the APL Apollo brand provide a strong foundation for sustainable profitability in a sector ripe for consolidation and modernization.

Source: Moneycontrol Quarterly Results, Economic Times Company Financials, Arihant Capital Market Initiating Coverage Report

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