Revenue Growth and Profitability Trends
SG Finserve’s net sales have surged dramatically from a mere ₹0.02 crore in March 2019 to ₹171.04 crore by March 2025. The most notable leap occurred between March 2022 and March 2023, when sales jumped from under ₹2 crore to over ₹41 crore, followed by a further increase to nearly ₹190 crore in March 2024 before a slight dip in the latest fiscal year. This rapid expansion reflects the company’s scaling operations and market penetration.
Operating profit margins have consistently improved, with the operating profit margin excluding other income rising from negative territory in 2019 and 2020 to a strong 64.7% in March 2025. Similarly, the profit after tax (PAT) margin has stabilised around 40% to 47% in recent years, a significant recovery from the negative margins recorded in earlier years. The company reported a PAT of ₹80.99 crore in the latest fiscal year, up from ₹18.41 crore in March 2023, underscoring enhanced operational efficiency and cost management.
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Cost Structure and Expense Management
SG Finserve’s total expenditure excluding depreciation rose in line with revenue growth but at a controlled pace, reaching ₹60.37 crore in March 2025 compared to ₹0.79 crore in 2019. Employee costs have increased steadily, reflecting workforce expansion to support business growth, while other expenses have also scaled but remain proportionate to income. The company has maintained zero raw material and purchase costs, consistent with its service-oriented business model.
Interest expenses have fluctuated, peaking at ₹63.96 crore in March 2024 before declining to ₹31.98 crore in the latest year, indicating some deleveraging or improved financing terms. Despite this, SG Finserve has managed to sustain a healthy gross profit and operating profit, signalling strong core business performance.
Balance Sheet Strength and Capitalisation
The company’s shareholder funds have expanded significantly from ₹8.09 crore in March 2021 to over ₹1,014 crore in March 2025, driven by increased reserves and equity capital. This reflects successful capital raising and retained earnings accumulation. Total liabilities have also grown, primarily due to a rise in short-term borrowings, which stood at ₹1,384.66 crore in March 2025, up from negligible levels in earlier years. The company carries no long-term borrowings, which may indicate a preference for short-term financing or working capital funding.
Non-current assets have increased substantially, largely due to long-term loans and advances, which reached ₹2,246.05 crore in March 2025. Current assets have also grown, with cash and bank balances at ₹61.08 crore, although net current assets remain negative due to high current liabilities. The book value per share has improved markedly, reaching ₹161.42 in the latest fiscal year, reflecting enhanced net asset value per share.
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Cash Flow and Liquidity Analysis
Despite strong profitability, SG Finserve’s cash flow from operating activities has been negative in recent years, with a cash outflow of ₹489 crore in March 2025. This is largely attributable to significant changes in working capital, which have absorbed substantial cash resources. Investing activities have also seen outflows, reflecting ongoing investments in the business.
Conversely, financing activities have provided strong inflows, with ₹554 crore raised in the latest fiscal year, supporting the company’s liquidity and funding requirements. The net cash inflow was modest at ₹7 crore in March 2025, following a net outflow in the previous year. The closing cash and cash equivalents stood at ₹31 crore, indicating a cautious liquidity position amid expansion.
Overall, SG Finserve’s historical performance reveals a company in rapid growth mode, with improving profitability and a strengthening balance sheet, albeit with challenges in cash flow management that investors should monitor closely.
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