01 — At a Glance
The Dealer Banker Nobody Talks About But Every Maruti Dealership Knows
- 52-Week High / Low₹461 / ₹323
- Q3 FY26 Revenue₹86.3 Cr
- Q3 FY26 PAT₹32.5 Cr
- TTM PAT₹109 Cr
- TTM EPS₹19.54
- Book Value / Share₹192
- Price to Book2.0x
- Gross NPA0.00%
- Net NPA0.00%
- AUM (Dec 2025)₹3,210 Cr
Flash Summary: SG Finserve delivered Q3 FY26 PAT of ₹32.5 crore — up 37% YoY from ₹23.8 crore. Zero gross NPAs. Zero net NPAs. AUM touched an all-time high of ₹3,210 crore (up 12% QoQ). The company grew sales by 103% YoY. But here’s the twist: the management deliberately chose conservative guidance because they’re too busy not letting it fail to chase growth targets. At 21.1x P/E with 8.89% ROE, the market is saying “show me more stability.” The company is saying “show me the exit door to anyone who doesn’t get it.”
02 — Introduction
Moongipa Securities → A Zombie → SG Finserve. The Phoenix That Nearly Didn’t Rise.
Picture this: 1994. Moongipa Securities gets incorporated. Life happens. Decades pass. By 2021, it’s a shell company with memories. Then, in 2021, Rahul and Rohan Gupta — the brothers who run the APL Apollo Group (₹3,000+ crore revenue company manufacturing steel tubes and HVAC systems) — acquire 56.25% stake. Open offer follows. And boom — on September 1, 2022, the company restarts from literal death and pivots to financing the supply chain of manufacturing companies.
The business model is surgical: we lend to dealers and distributors of companies like APL Apollo, Balco, Bajaj Electricals, JSPL, Vedanta, Kajaria, and others. Think of it as a credit line that moves inventory through the dealer channel without tying up the manufacturer’s working capital. The lender (SG Finserve) gets secured positions over receivables and inventory. Everyone wins. Except the company makes very few mistakes.
By FY25, the loan book had hit ₹1,673 crore. By Q3 FY26, it’s ₹3,210 crore. That’s a doubling in under a year. Gross disbursal is ₹17,705 crore annually. The company has 44 anchor partners (corporate partners whose supply chains they’re financing) and serves 500+ borrowers. Zero gross NPAs. Zero net NPAs. The margins are fat (50% financing margin). The defaults are non-existent. The management talks about risk like a politician talks about taxes — with audible fear.
ICRA Rating Note (Mar 2026): Assigned [ICRA]AA(CE) (Stable) on bank facilities. [ICRA]A1+ on commercial paper. The ratings are backed by explicit corporate guarantee from parent company S Gupta Holding (SGHPL), which is also rated AA. Translation: the lender is protected. The credit cost is near-zero. And the company is betting its existence on zero defaults, forever.
03 — Business Model: WTF Do They Even Do?
We Finance Your Dealer’s Inventory. You Sleep Well. We Worry For You.
SG Finserve operates as an NBFC (Non-Banking Financial Company) licensed to do supply chain financing and related asset-backed lending. The structured product is simple: a manufacturer (the “anchor”) has a dealer network. The dealers need working capital to buy inventory. Instead of the anchor lending to the dealer (and tying up its balance sheet), the anchor refers the dealer to SG Finserve. SG Finserve lends at 10–13% per annum (depending on tenor, risk, and tenor). The dealer buys inventory. The goods sell. The dealer repays SG Finserve. Done.
What’s the security? Dual collateral: (a) hypothecation over the funded inventory (the actual goods), and (b) pledge over the receivables generated from selling those goods. This is why it’s called “secured” supply chain financing. If the dealer defaults, SG Finserve can legally seize the inventory and the payment flows from end-customers. It’s not pretty, but it works. The credit cost is therefore near-zero because the collateral coverage is 1.25x minimum (bank covenant).
70% of the AUM is supply chain financing. The other 30% is what management calls “ecosystem financing” — business loans, LAP (Loan Against Property), LAS (Loan Against Securities), and working capital to entities within the anchor’s ecosystem. These are also secured, but by different collateral (property, shares, or personal guarantees). The company explicitly avoids retail financing. No unsecured personal loans. No consumer credit. No payday lending. It’s deliberate. It’s disciplined. It makes investors nervous because there’s no upside surprise hiding.
Supply Chain70%of AUM
Ecosystem Lending30%of AUM
Gross NPAs0.00%till Dec 2025
Cost of Funds~8–9%per annum
Fun fact: In the January 2026 concall, management was asked if they’d consider offering unsecured loans to increase ROE and growth. The CEO responded with audible horror: “As of now, we are not doing any retail financing.” It was like asking a teetotaler if he’s tried vodka. The answer was “absolutely not,” and the tone made clear the question was offensive.
04 — Financials Overview
Q3 FY26: The Math That Defies Growth Logic But Confirms Discipline
Result type: Quarterly Results | Q3 FY26 EPS: ₹5.81 | Annualised EPS (Q1–Q3 avg × 4): ₹19.54 | Current Stock Price: ₹384 | P/E: 19.7x (using annualised EPS)
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 86.3 | 42.0 | 75.0 | +105.5% | +15.1% |
| Financing Profit | 43.0 | 32.0 | 39.0 | +34.4% | +10.3% |
| Financing Margin % | 50% | 76% | 52% | -2600 bps | -200 bps |
| PAT | 32.5 | 23.8 | 28.2 | +37.1% | +15.2% |
| EPS (₹) | 5.81 | 4.24 | 5.08 | +37.0% | +14.4% |
The Financing Margin Compression Story: Look at Q3 FY25 — the financing margin was 76%. Now it’s 50%. You’d think the company is tanking. Actually, no. Here’s what happened: in Q3 FY25, the AUM base was smaller and the business was earlier-stage. The margins were fat but unsustainable. Now, with 3x+ AUM growth, margins are normalizing to a stable 50%. The company is saying “we’re locking in sustainable unit economics now.” That’s actually a good sign — it means they’re not chasing ephemeral margins at the cost of volume. But the market hates margin compression, so the stock sits at 21.1x P/E.
💬 The company grew PAT by 37% YoY even as financing margins collapsed from 76% to 50%. Does this suggest the growth is real, or is the market right to be cautious? What’s your read?
05 — Valuation Discussion: Fair Value Range
What Is A Startup NBFC With Zero Defaults Actually Worth?
