How has been the historical performance of SG Mart?

Revenue and Profit Growth Trajectory

SG Mart’s net sales have surged dramatically from a modest ₹1.06 crore in March 2016 to an impressive ₹5,856.17 crore by March 2025. This exponential growth reflects the company’s expanding market presence and operational scale. The total operating income mirrors this trend, rising in tandem with net sales, underscoring the company’s core business strength.

Operating profit, measured as PBDIT excluding other income, has also shown a consistent upward trend, reaching ₹103.09 crore in the latest fiscal year from just ₹0.57 crore in 2016. When factoring in other income, operating profit nearly doubled to ₹183.29 crore in March 2025, indicating effective income diversification.

Profit after tax (PAT) has followed a similar trajectory, growing from a nominal ₹0.12 crore in 2016 to ₹103.43 crore in 2025. This growth is particularly notable given the company’s earlier years of minimal profitability, highlighting improved operational efficiencies and cost management.

Cost Structure and Margins

The company’s expenditure profile reveals that the purchase of finished goods constitutes the largest cost component, rising sharply to ₹5,840.13 crore in 2025 from negligible amounts in earlier years. Raw material costs have also appeared recently, albeit at a much smaller scale. Employee costs have increased steadily but remain a minor portion of total expenses.

Operating profit margins excluding other income have declined from exceptionally high levels in the early years—above 50% in 2016 and nearly 89% in 2017—to a more modest 1.76% in 2025. This contraction is typical as companies scale and face competitive pressures, yet the absolute profit growth remains robust. The PAT margin similarly decreased from over 50% in 2017 to 1.77% in 2025, reflecting the company’s transition from a small-scale operation to a large enterprise with higher cost bases.

Balance Sheet and Financial Position

SG Mart’s balance sheet has expanded significantly, with total assets growing from ₹27.22 crore in 2016 to ₹2,298.42 crore in 2025. Shareholders’ funds have increased correspondingly, reaching ₹1,208.15 crore, supported by rising reserves. The company has successfully reduced its long-term borrowings to zero by 2025, signalling improved financial health and reduced leverage.

Current liabilities have increased, driven largely by short-term borrowings which rose to ₹689.04 crore in 2025, reflecting working capital requirements aligned with the company’s growth. Trade payables and other current liabilities have also expanded, consistent with the larger scale of operations.

On the asset side, net block values have increased substantially, indicating ongoing capital investments. Capital work in progress has also grown, suggesting continued expansion plans. Cash and bank balances remain strong, exceeding ₹1,100 crore in recent years, providing liquidity support.

Cash Flow Dynamics

Cash flow from operating activities has been volatile, with a negative ₹391 crore in 2025 contrasting with positive cash flows in prior years. This is largely due to significant changes in working capital, which increased by ₹466 crore in 2025, reflecting inventory build-up and receivables growth. Investing activities have consistently been cash outflows, indicative of capital expenditure and expansion investments.

Financing activities have provided substantial inflows, with ₹478 crore raised in 2025, supporting the company’s growth and working capital needs. Despite operating cash flow challenges, the net cash inflow remains positive, maintaining a stable cash position.

Summary of Historical Performance

Over the past decade, SG Mart has evolved from a small-scale entity with minimal sales and profits to a sizeable player with multi-thousand crore revenues and substantial profitability. The company’s financial journey is characterised by rapid revenue growth, expanding asset base, and improved shareholder equity. While margins have compressed as the business scaled, absolute profits have increased significantly.

Financial discipline is evident in the reduction of long-term debt and the maintenance of strong cash reserves. However, the recent negative operating cash flow highlights the challenges of managing working capital amid rapid expansion. Investors should weigh these factors alongside the company’s growth prospects and sector dynamics when considering SG Mart’s stock.

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