SG Mart Releases Q2 FY26 Earnings Call Transcript, Reports ₹1,700 Cr Revenue Amidst Margin Pressure
SG Mart released its Q2 FY26 earnings call transcript, reporting over ₹1,700 crore revenue. Profitability was impacted by steel price decline and upfront branding expenses, though the long-term outlook remains positive.
The immediate financial results show a mixed picture with strong revenue growth but a hit to margins and a lowered FY26 EBITDA guidance, which could lead to short-term investor concern. However, the strategic initiatives, such as expanding the service center network and the new renewable structure business, are expected to provide more stable and higher-margin growth in the future, suggesting a medium-term positive impact that could offset the current challenges.
While SG Mart reported a significant 50% QoQ revenue increase, its profitability was negatively impacted by a sharp decline in steel prices leading to inventory losses and a strategic decision to pre-book branding expenses. The company also revised down its FY26 EBITDA target, indicating short-term challenges. However, the management's confidence in Q4 recovery and the long-term potential of its high-margin service center and renewable structure businesses balances the sentiment.
SG Mart Limited (formerly Kintech Renewables Limited) announced the release of the transcript for its Q2 FY26 earnings conference call, which was held on October 31, 2025. The call featured management including Mr. Anubhav Gupta (Group Chief Strategy Officer), Mr. Amit Thakur (Director B2B Metal), Mr. Suraj Kumar (CFO), Mr. Naman Rastogi (GM, Strategy), and Mr. Archit Arora (VP, Service Center and Distribution Business).
Key highlights from the Q2 FY26 performance: * Revenue: The company achieved over ₹1,700 crore in revenue, marking a 50% increase quarter-on-quarter. * Profitability: EBITDA was below expectations due to three main reasons: * Steel prices declined by ₹3,000 to ₹3,500 per ton, leading to inventory losses (approximately 50-60 basis points of total revenue), primarily booked in the service center business. * All branding expenses, which were previously amortized over 24 months, were pre-booked in Q2 (and will continue in Q3), with expenses being 2.5x to 3x higher than usual. * Upfront fixed costs were incurred for marketing and manufacturing of the new profiling business. * Working Capital: Working capital days stood at 22 as of September 30, 2025, slightly higher than Q1, mainly due to the new profile business inventory and international trading. * ROCE Targets: The company maintains its 20-25% Return on Capital Employed targets.
Performance by Business Vertical (Q2 FY26): * B2B Metal Trading: Contributed 30% to total revenue, increasing by 50% QoQ. H1 FY26 revenue was flat year-on-year. EBITDA margin is ₹500-₹1,000 per ton. * Service Center Business: Contributed 50% to total revenue. The company operates 7 service centers (5 owned, 2 leased) and plans to open another in Jaipur in Q4. It aims to add 4-6 service centers annually. Volume grew 35% QoQ. EBITDA margin is ₹1,500-₹2,000 per ton. * Renewable Structure Business: Contributed 4% to total revenue, having commenced in Q2. It has an order book of ₹260 crore, providing visibility for the next 2-3 quarters, with contribution expected to double in Q3 FY26. New products like cable trays and solar struts are being added. EBITDA margin is ₹2,000-₹3,000 per ton. * Distribution Product Business: Contributed 16-17% to total revenue, showing QoQ growth. It is expanding product offerings, including TMT, mesh net wire, and light structures. EBITDA margin is ₹1,000-₹1,500 per ton.
Outlook and Guidance: * The management stated that the FY26 EBITDA target of ₹200 crore is now difficult to achieve. * Q3 FY26 EBITDA is expected to be similar to Q2 due to continued booking of advertisement expenses and steel price decline in October. * Q4 FY26 is anticipated to show a strong exit run rate, reflecting the true potential of the business as the service center and open profile businesses stabilize. * The long-term guidance remains intact, with confidence in achieving commitments. * The TMT business model has shifted to a royalty-based approach, generating ₹15 million in royalty income without capital employment or expenses. * H1 FY26 saw EBITDA increase by 61% year-on-year, net profit by 38%, and cash profit by 47%.
What to do with a filing like this
SG Mart Limited filed this with the NSE as a statutory disclosure, categorised under concall transcript released. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
That call is the part a filing cannot make for you. On RealCase, SEBI-registered research analysts and investment advisers read announcements like this one and turn the ones that matter into actions inside their model portfolios: a change in weight, a hold, or nothing at all. You are not left working out which of the roughly 250 filings published each day needs a response. The portfolio you follow is updated when a filing actually warrants it, with the reason written down.
See the model portfoliosA plain-language summary of a public exchange filing by SG Mart Limited. Read the original for the full detail.