SG Finserve Ltd Reports Very Positive Quarterly Performance Amid Margin Expansion

Quarterly Financial Highlights Demonstrate Strong Growth

In the quarter ended December 2025, SG Finserve Ltd achieved its highest-ever net sales of ₹86.28 crores, reflecting a solid upward trajectory in revenue generation. This growth is complemented by a record PBDIT (Profit Before Depreciation, Interest and Taxes) of ₹79.62 crores, underscoring improved operational efficiency. The company’s PAT (Profit After Tax) also reached an all-time high of ₹32.47 crores, signalling effective cost management and favourable market conditions.

One of the standout metrics was the operating profit to net sales ratio, which surged to 92.28%, the highest in the company’s recent history. This margin expansion indicates SG Finserve’s ability to convert sales into operating profits more effectively than before, a critical factor for long-term sustainability in the NBFC sector.

Additionally, the PBT (Profit Before Tax) less other income stood at ₹43.05 crores, further highlighting the core profitability of the business operations without reliance on ancillary income streams. Earnings per share (EPS) also climbed to ₹5.81, marking a significant improvement that should attract investor attention.

Financial Trend Shift: From Outstanding to Very Positive

SG Finserve’s financial trend parameter has shifted from outstanding to very positive, reflecting a nuanced but encouraging change in performance dynamics. The company’s financial score decreased slightly from 31 to 29 over the past three months, yet this remains within a very positive range. This subtle dip may be attributed to external market pressures or internal adjustments but does not detract from the overall strong quarterly results.

However, a notable concern is the company’s debt-equity ratio, which rose to 1.72 times at the half-year mark, the highest recorded in recent periods. While leverage can amplify returns, it also introduces risk, especially in a sector sensitive to interest rate fluctuations and credit cycles. Investors should monitor this metric closely as it may impact future credit costs and financial flexibility.

Stock Price and Market Performance Context

SG Finserve’s current share price stands at ₹376.05, down 1.44% from the previous close of ₹381.55. The stock has traded within a range of ₹371.20 to ₹399.40 today, with a 52-week high of ₹460.60 and a low of ₹308.00. This volatility reflects broader market uncertainties and sector-specific challenges.

When compared to the benchmark Sensex, SG Finserve’s recent returns have underperformed. Over the past week, the stock declined by 5.00% versus the Sensex’s 2.43% drop. The one-month and year-to-date returns also lagged behind the index, with losses of 8.06% and 8.11% respectively, compared to the Sensex’s declines of 4.66% and 4.32%. However, the stock has shown resilience over the longer term, delivering a modest 1.08% gain over the past year, albeit below the Sensex’s 6.56% rise.

Longer-term returns present a more complex picture. Over three years, SG Finserve’s stock has fallen 26.77%, contrasting sharply with the Sensex’s 33.80% gain. Yet, over five and ten years, the company’s returns have been extraordinarily high at 16,250.00% and 2,714.75% respectively, dwarfing the Sensex’s 66.82% and 233.68% gains. This suggests that while recent performance has been mixed, the company has delivered exceptional value creation over the long haul.

Mojo Score and Grade Update

SG Finserve currently holds a Mojo Score of 58.0, placing it in the Hold category with a Mojo Grade of Hold. This represents a downgrade from its previous Buy rating as of 5 January 2026. The downgrade reflects a more cautious stance given the recent market volatility, rising debt levels, and relative underperformance against the benchmark. The company’s Market Cap Grade remains at 3, indicating a mid-tier market capitalisation within its sector.

Investors should weigh the company’s strong quarterly earnings and margin expansion against the risks posed by leverage and short-term price weakness. The Hold rating suggests maintaining existing positions while monitoring developments closely.

Sector Outlook and Strategic Considerations

The NBFC sector continues to face headwinds from regulatory changes, interest rate fluctuations, and credit quality concerns. SG Finserve’s ability to post record quarterly profits and expand margins is a positive signal that it is navigating these challenges effectively. However, the elevated debt-equity ratio warrants caution, as higher leverage may increase vulnerability to tightening credit conditions.

Investors should also consider the company’s valuation relative to peers and broader market trends. While the stock’s long-term returns have been exceptional, recent underperformance and a Hold rating suggest a period of consolidation or selective accumulation may be prudent.

Overall, SG Finserve’s very positive quarterly results highlight operational strength and growth potential, but the evolving financial trend and market context advise a balanced approach to investment decisions.

Conclusion

SG Finserve Ltd’s December 2025 quarter marks a significant milestone with record revenues, profits, and margin expansion, reflecting very positive financial performance. Despite a slight dip in its financial trend score and a downgrade to Hold, the company’s fundamentals remain robust. Investors should monitor debt levels and market conditions closely while recognising the company’s long-term value creation track record. The current market environment calls for cautious optimism, with SG Finserve positioned as a key NBFC to watch in the coming quarters.

Unlock special upgrade rates for a limited period. Start Saving Now →