1. Opening Hook
Steel prices slipped, demand took a tea break, and SG Mart’s margins decided to go on vacation.
Q3FY26 arrived with big top-line energy, but profitability quietly exited through the service-centre gate.
Management blames October–November blues, transient pressures, and the usual steel-cycle ghosts. Fair.
But when EBITDA margin slides from 3.1% to 1.0% in two quarters, investors stop nodding and start counting.
The pitch is still ambitious: 50% CAGR visibility, service centres everywhere, renewables next, UAE optional.
The execution? A little less cinematic this quarter.
Stick around. The numbers get interesting, the commentary gets optimistic,
and the gap between “platform story” and “platform profits” becomes very visible later.
2. At a Glance
- Revenue up 23% YoY – Scale is flexing; pricing power is not.
- QoQ revenue down 4% – Steel prices blinked, volumes shrugged.
- EBITDA down 40% YoY – Margins folded faster than sheet metal.
- EBITDA margin at 1.0% – Marketplace dreams, trader economics.
- PAT down 62% YoY – Profit didn’t just soften, it vanished.
- Net cash ₹7.4Bn – Balance sheet still the adult in the room.
- ROCE at 12% – Growth mode is expensive, who knew?
3. Management’s Key Commentary
“Q3FY26 was a challenging quarter due to pressure on steel prices.”
(Translation: Steel doesn’t care about our spreadsheets 😏)
“Demand in downstream steel products
was weak in October and November.”
(Festive season skipped steel, went shopping elsewhere)
“These pressures are largely transient.”
(Trust us, cycles are friendly… eventually)
“Steel prices are showing signs of recovery.”
(Bloomberg chart spotted turning green)
“We are confident of delivering a significantly better Q4FY26.”
(Hope is a powerful budgeting tool)
“Focus remains on disciplined inventory management.”
(Because last quarter’s inventory bill was loud)
“Margin protection is a key priority.”
(After margins escaped, protection suddenly matters)
4. Numbers Decoded
| Metric | Q3FY26 | QoQ Trend | What It Really Says |
|---|---|---|---|
| Revenue | ₹16.4Bn | ↓ 4% | Volumes okay, pricing meh |
| Business EBITDA | ₹167Mn | ↓ 40% | Scale didn’t save margins |
| EBITDA Margin | 1.0% | ↓ 63 bps | Trading pain on display |
| PAT | ₹107Mn | ↓ 60% | Thin margins hurt hard |
| Net Cash | ₹7.4Bn | Stable | Firepower intact |
| NWC Days | 27 | ↑ | Bulk buying came early |
One-liner: Growth is real, but profitability is walking on thin steel sheets.
5. Analyst Questions
- Q: Why did margins collapse so sharply?
A: Steel prices + weak downstream demand.
