SG Mart Limited began life in April 2023 as an empty shell company called Kintech Renewables, with no business operations, before being acquired by the APL Apollo group family and renamed, notes Nuvama Institutional Equities in a recent note. The brokerage has now initiated coverage on the stock with a 'Buy' rating and a target price of Rs 777, implying a 22% upside from July 16's closing price of Rs 636. The stock is currently trading around Rs 646 apiece.
According to Nuvama, SG Mart was originally positioned to become "India's largest trading company," focused on steel and zinc trading. That model changed after April 2025, when the collapse of import arbitrage led to a shift from pure trading toward processing, fabrication and distribution. This was driven by the implementation of a safeguard duty on steel imports.
Nuvama's report includes a section on frequent misses and adjustments on guidance. For the period before FY25 and FY26, it lists 'aggressive revenue/EBITDA ramp up' targets that saw a repeated miss, attributed to steel volatility, supply issues, execution in B2B trading.
For FY25, guidance of approximately Rs 6,500 crore in revenue came in lower than guided, with margins pressured due to steel price crashes and inventory losses, Nuvama noted. The report states that "management often reaffirms longer-term targets despite quarterly/short-term misses, citing ecosystem building and diversification."
Nuvama's risk matrix separately rates guidance credibility as a Medium probability, and a Medium impact risk, with the mitigation listed as "track record of misses; close monitoring needed."
Nuvama forecasts a 73% compound annual growth rate (CAGR) in earnings per share (EPS) between FY26 and FY29, with return on capital employed projected to improve from 10% in FY26 to 27% by FY29.
The brokerage has assigned SG Mart a valuation of 15 times its FY29 EV/EBITDA, citing the company's revenue and profit growth relative to global peers in metals processing and distribution.
Promoter holding in the company rose from 36.27% in March 2026 to 57.9% in June 2026. Nuvama's report attributes the stock's re-rating over the past three to four months to this increase in promoter stake.
ALSO READ: FTA Effect: India's UK Steel Exports Could Hit $1 Billion In FY27, Says Commerce Secy
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
