SG Mart · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Dubai contributed ~10% of Q4 service center volume but profitability was significantly impacted by fixed costs amid minimal March business due to conflict. An analyst questioned the net block increase of ₹108 crore difference between standalone and consolidated; management claimed no deterioration but offered no detailed rebuttal, promising follow-up.
Steel availability in India remains constrained due to Middle East conflict affecting gas supply to steel mills. B2B volumes in Q4 were lower than Q3; renewable structures faced coated steel shortages. April/May showing sequential improvement but normalcy timeline remains uncertain and war-duration dependent.
FY26 PAT grew only ~10-11% versus 35% EBITDA growth. Management attributes this to heavy capex deployment (₹525 crore in FY26) creating elevated depreciation, with free cash flow constrained. Cash profit growth aligns better with EBITDA growth but near-term PAT will remain depressed.
Q4 had ₹6 crore inventory gain; Q3 had ₹15-20 crore loss; H1 was stable. Full-year EBITDA of ₹137 crore would have been ₹150+ crore adjusting for steel price swings. As business scales to higher-value verticals (service centers, profiles), inventory impact as percentage of EBITDA should diminish.
