SG Mart · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Q3 FY26 demonstrates the material impact of sharp steel price corrections on reported earnings. While management targets Rs 350 crore EBITDA by FY27, any 15-20% steel price crash could jeopardize these targets. The analyst raised concern about ongoing government capex slowdown affecting construction demand.
Jaipur center was delayed by 2-3 months due to excessive rains. Management has announced aggressive 20-center expansion plan but hasn't provided detailed capex budget or land acquisition timeline. One analyst questioned why the company isn't more aggressive despite ample cash (Rs 800+ crore), suggesting execution hurdles beyond stated reasons.
Working capital days increased to 27 days from normal levels due to advance payments to steel suppliers ahead of anti-dumping duty implementation. This ties up cash and increases inventory exposure. Management expects improvement by March 2026 but didn't quantify the normalized level.
Management projects renewable volume to grow from 17,000 tonnes (Q3 FY26, single plant) to 180,000 tonnes annually by FY27, requiring 3x capacity utilization. The Ghaziabad plant is operational, Pune starts February 2026, but management admitted customers are delaying purchases due to recent steel price increases. Order booking expected to resume in February.
