SG Mart (SGMART)

FairStock Score: 24/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low leverage with Debt/Equity at 0.17
• Sales growth of 23.21% shows revenue momentum
• ROCE of 11.33% is reasonable for a trading business
• Latest quarter sales of ₹1,644 Cr indicates meaningful scale

Concerns

• Profit growth down 61.70%, with latest quarter net margin only about 0.67%
• P/E of 56.63 and PEG of 2.44 are expensive for weak earnings quality
• P/B of 5.92 vs ROE of 6.58% implies paying far too much for mediocre returns
• Piotroski F-Score of 4/9 and FairStock Score of 21/100 signal financial risk

AI Analysis

At ₹544.70, SG Mart wears a mask of growth but fails Graham’s margin-of-safety test. A trading business in metals is inherently cyclical and low-margin. The latest quarter tells the tale: ₹1,644 Cr of sales produced just ₹11 Cr of profit — a net margin below 0.7%. Over the year, profit has fallen 61.70% even as sales grew 23.21%. So this is not durable compounding; it is a cyclical squeeze on a low-margin trader. I cannot ignore valuation. At P/E 56.63, the market is paying a rich price for depressed earnings. PEG is 2.44, hardly cheap. Book value is ₹91.94, but the stock trades at 5.92 times book while earning only 6.58% on equity. That is a combination Benjamin Graham would call speculative. ROCE of 11.33% is respectable, and Debt/Equity of 0.17 is conservative, but promoter holding of only 36.27% gives me less comfort that insiders are tightly aligned. The Piotroski F-Score of 4/9 reinforces weak fundamental quality, and zero dividend means the small shareholder must rely entirely on price appreciation. In a cyclical metals trade, that is a dangerous hope. FairStock Score of 21/100 labels it risky, and I agree. I would not put this in my circle. Without strong margins, consistent return on equity, or a meaningful margin of safety, the risk-reward is poor. The only way I reconsider is if margins stabilise, debt stays low, and the price falls to a level that compensates for the cyclicality. Until then, this is a business to watch, not to own.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer