Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
SG Mart Ltd (NSE: KRL) Q4 2026 Earnings Call dated May. 04, 2026
Corporate Participants:
Anubhav Gupta — Group Chief Strategy Officer
Analysts:
Kumar Saumya — Analyst
Unidentified Participant
Rahul Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to SGMart Limited Q4FY26 earnings conference call hosted by Amethyst Capital Pvt LTD. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Stardom zero on your touchstone. Please note that this conference is being recorded I now hand the conference over to Mr.
Kumar Soumya from Ambed Capital thank you and over to Mr. Soumya
Kumar Saumya — Analyst
Thank you Neer Good evening everyone. Welcome to the 4Q and FY26 post result conference call of SGFART. From the management we have with us Mr. Amit Thakur Director B2B Metal Trading Mr. Suraj Kumar Chief Financial Officer Mr. Naman Rastogi General Manager Strategy Mr. Archit Arora, Vice President Service center and Distribution Business Mrs. Anamika Gulati Senior General Manager Renewable Business and Mr. Anuar Gupta, Group Chief Strategy Officer I’ll now hand over the call to management for an opening remark post which we’ll open the floor for a Q and A Over to you sir.
Thank you.
Anubhav Gupta — Group Chief Strategy Officer
Thanks Kumar and thanks to MBIT for hosting SGMart for its Quarter 4 FY26 earnings call. Good evening everyone. I welcome all of you on our earnings call. Despite very challenging 9 months for Svmart we closed the financial year with very solid performance with with quarter four being the best quarter in terms of revenue upwards of 1800 crores and EBITDA of 56 crore rupees this performance comes in the backdrop of very challenging month of March because of the onset of Middle east crisis and despite that we could pull off these numbers so if you look at the full year performance with the ebitda growth of 35% to 137 crore for FY26 with 15% RoCE on reported numbers and if we analyze quarter four performance then RoC will be around 25% which is the true reflection of our business model.
We brought down the working capital days to 20 with inventory and debtor rationalization this resulted in operating cash flow generation of 300 crores for the full year which funded the large capex of upward of 250crores and there was small free cash flow generation as well on full year basis and we closed our balance sheet with net cash of 750crore rupees the reason for this performance was that Sgmart has now four running verticals which have completely streamlined and we are ramping up these verticals pretty well.
Obviously there will be short term challenges coming in because of Middle east crisis. But do you quarterly performance should be better than the previous quarters as new businesses, new verticals keep on ramping up. So vertical number one is B2B sales which saw like if you look at the quarter four results, the B2B volume is lower than quarter three because of shortage of steel supply which got triggered in month of January and then by the time war started it further aggregated and the situation remains slow in terms of B2B business.
But because it doesn’t contribute too much to our earnings, it’s not hurting overall performance too much. Service centers if you see our volume was 190,000 tonnes for the for the quarter 4 versus 163,000 tonnes. So this 10% increase, more than 10% increase is because of the addition of new service centers. And we continue to invest heavily in new service centers which will keep on pushing the volumes upward and higher. Our renewable structures saw slight dip in the volume. The reason being because we have to buy specialized coated steel which was in shortage due to gas issues from the steel mills.
So that’s why the volume was a bit lower. At the same time in the quarter four we started selling new profiles which we have talked about multiple products being used for construction, warehousing, multiple applications. So we started that business and did volume of around 7,000 tonnes with good margins as it is being sold in Apila Polo brand and in the group distribution network. So all put together these four verticals produced around 50 crore of business EBITDA and 6 crore was inventory gain for the quarter because there was there was steel price upward movement throughout the quarter.
So the total reported EBITDA was 56 crores out of which business EBITDA was 50 and 6 crore is the inventory gain. Now why this 50 crore business EBITDA is important because I mean throughout the FY26 financial year we were hoping that we will touch this 50 crore business EBITDA maybe in second third quarter. But obviously because of multiple reasons we couldn’t achieve that. So finally we did that in quarter four and whatever business ramp up is taking place, we are confident that 50 crore quarter for EBITDA, I mean it will keep on rising throughout FY27 despite the challenges which we are facing in our B2B business due to short supply of steel.
And obviously service centers in India are running pretty well except that in Dubai which contributes around 10% of the volume, that operations are a Bit disrupted. But whenever the war stops Dubai Service center will also start contributing significantly. I mean as of now it becomes very difficult to give any guidance on monthly or quarterly basis. But in our last earnings call we did guide for 300 to 350 crore of annualized EBITDA for FY27. We are confident that we should be, we should be near to that number unless there is like more loss of business due to war in our B2B business or in or in our Middle east operation.
But the India business, the renewable structures and the steel profile business, these three verticals are operationalized and throwing a good profitability, volume ramp up and good return profile as well. So with this I’ll be happy to take questions. Thanks so much.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on Datastone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press Star and one to ask the question. Ladies and gentlemen, you may press star N1 to ask the question.
The first question is from the line of Rahul Kumar from Wakariya. Please go ahead.
Kumar Saumya
Yeah, hi, just two line items. Can you explain your interest cost and other income both have a sort of decline in this quarter versus Q3. Can you explain that?
Anubhav Gupta
So see I mean the interest cost is declining because of, because of the working capital rationalization. We closed the year with 20 days of working essence cycle. So our overall capital employed in the business reduced significantly for the like towards the end of the year. And this resulted in. This resulted in like surplus cash being like which on the books and lower interest cost.
Kumar Saumya
How much of this trade payables is the acceptances?
Anubhav Gupta
Zero. They’re all, they’re all non acceptance payables.
Kumar Saumya
Okay, okay, okay. But in case we have generated more cash than price our you know other income has also declined
Anubhav Gupta
Because like the operating cash flow Generation was around 300 crores at the same time we did capex of 250 crore rupees.
Kumar Saumya
Okay.
Anubhav Gupta
So net cash generation was like very minimal.
Kumar Saumya
Okay. Because our cash balance has actually also increased I think versus quarter three it’s increased I think almost 100 crores. So I was just wondering I mean what led to then the decline in the income act
Anubhav Gupta
Cash was around 740 crores and quarter four is 750 crores. Only 10 crore increase.
Kumar Saumya
Okay. And this capex which you have done, which particular area which we have done the capex and for FY27, what is the capex plans and which area which we are, you know, planning to do the capex.
Anubhav Gupta
So if you look at like in FY26 full year we did, we did around 525 crore rupees of capex. Okay. This includes work capital work in progress and advances to suppliers and contractors. Right. In nine months the figure was 400 crore rupees. So in quarter four we did around 125 crore additional. Now capex multiple capex, I mean most of the capex went towards service centers, okay. And acquisition of new land parcels. Because now that this business has like, you know, is running very smooth. So we have become aggressive like we were before to acquire new land parcels and set up new service centers going forward.
I think we already have taken approval of around 600 crores of capex for two years. So this is what we will be including CAPEX over the next two years.
Kumar Saumya
So for FY27 and 28 you’re planning to do 600.
Anubhav Gupta
That’s a minimum. If we need to add more lines for renewable structures and, and profile structures, then it could increase.
Kumar Saumya
Okay. Okay. And this 600 is distributed in service center. And can you just
Anubhav Gupta
Break up?
Kumar Saumya
Yeah. So just can just break up. Yeah.
Anubhav Gupta
I mean we need, we, we must acquire at least four or five new land parcels. Okay. Incrementally we must do CAPEX to set up new service centers of three to four numbers. Okay. Then, then setting up profile machines. Right. So you can assume like one third will go for building of service centers. Half would be for acquisition of new land parcels and, and balance 15%, 20% would be for profile machines.
Kumar Saumya
Okay. Okay, this last question, this is on the ESOP plan which you know, you sort of announced. So what is the price at which the ESOP will be granted? I mean it’s not very clear from the, you know, the announcement which we have since they send the discount.
Anubhav Gupta
So this ESOP Type was locked 1 1/2 years ago. Okay. And that point of time, the current price which was around 367 rupees. This is what will be the exercise.
Kumar Saumya
This is for the ESOP approval which you are sort of planning to take from the in the egm. This was in future ESOP plans. Right.
Anubhav Gupta
So this approval is for the balance ESOPs, okay. Which were not utilized. And if we have to give and give those ESOPs to new employee, then we can use from the Previous pool it’s not to issue any new ESOPs.
Kumar Saumya
Okay. Okay. And on this also the, the strike price is. Exercise price is the 367 rupees.
Anubhav Gupta
Yeah. It will remain same. No, because, because the pool is like previous one only.
Kumar Saumya
Okay, okay. Because in the announcement it has been mentioned that it will be at a discount to market price but it is not clearly specified at what price. Action.
Anubhav Gupta
Yeah, so it is 367 which we had taken approval for the last ESOP.
Kumar Saumya
Okay. Okay, thank you.
Operator
Thank you. The next question is from the man of Vishal Mehta from Oakland Capital Management. Please go ahead.
Kumar Saumya
Hello.
Anubhav Gupta
Yeah, please go ahead. Hello
Operator
Vishal, go ahead. You’re audible.
Kumar Saumya
Yeah, I just wanted to check that in your opening remarks you mentioned that the 15 odd percent quarter on quarter volume growth in the service center business has come from increment in service centers. The presentation shows that we still have seven service centers. So is there something we’re missing?
Anubhav Gupta
Vishal? I meant that volume from new service centers came up.
Kumar Saumya
Got it, got it. And for 20. So basically what you’re saying is that the new service centers which we have opened, all of them have given better volumes.
Anubhav Gupta
That’s right.
Kumar Saumya
Okay. And also if you could just give some clarity on what is your expectation for the profile business and the renewable business for FY27 and 28. I mean in terms of volume, how do you see that panning out?
Anubhav Gupta
Sure. So Vishal, see I mean if you look at our quarter four we did around the 5,000 ton monthly average in renewable structures. Okay. Full year it gives around 60,000 tonnes. The run rate for like as of now there is a shortage of coated steel in the industry because of gas issues. Okay. Which we believe will improve in next one to two months. So we will come to 8,9000 ton of monthly volume. Okay. So from, so we may remain at 5,6000 ton for two months and then it will ramp up to 8,9000 say for 7,8 months.
So put together we should be around 130 to 150,000 tonnes for the full year. Okay. In terms of renewable structures as far as the other profile structures that business is ramping up pretty well. In Q4 the number looks very small which is like 7,000 tonnes. But April month has gone pretty good which is like 5,6000 ton hundred we have already achieved. And more and more products and machines are getting started in next 1 to 2 months. So this also with 5,6000 ton of monthly volume for next 2, 3 months this will ramp up to 8 to 10,000 ton for say 8 to 9 months for the full year.
So here also we can expect like 100,000 ton plus annual volume.
Kumar Saumya
Got it. And that 15 capex which you mentioned about profile that includes re business or it’s just for four files.
Anubhav Gupta
Yeah. Joint for re business. We have sufficient capacity as of now. Okay. We can do volume of 150,000 ton for the full year. Profile, additional profiles.
Kumar Saumya
Great sir, thank you so much. I’ll get back in the queue and all the rest of the future.
Anubhav Gupta
Thanks.
Operator
Thank you. Next question is from the line of Nikhil Purwal from Perpetual Capital. Please go ahead.
Kumar Saumya
Yeah. Good evening Anubhav. My first question is on. So the subsidiary revenue more or less sequentially it’s flat at around 230240 odd crores. But the profitability has taken a big hit despite prices moving up for steel. So any color on this
Anubhav Gupta
For big business
Kumar Saumya
For the Dubai operation?
Anubhav Gupta
Huh? Profitability
Kumar Saumya
Has. Yes, go ahead.
Anubhav Gupta
So. So see I mean Dubai the. I mean in month of March there was hardly any business. Okay. Because of like what happened there. So that fixed cost etc led to like you know profitability hit. But. But things are becoming better. Okay. Teams have started traveling there. Okay. So you will see this getting recovered in a month or so.
Kumar Saumya
I meant about the gross margin. If I just look at the consolidated minus standalone the gross margin has come down significantly. But I understand the volume drop because of the conflict in Middle East.
Anubhav Gupta
Okay, we’ll revert to this later. My team is working on it. Maybe in 10, 15 minutes we’ll answer this question.
Kumar Saumya
Okay. Okay. And next is on. Are you investing further for capacity as Dubai center as well? Because the net block again the difference between Tamsal and standalone has moved up.
Anubhav Gupta
No, there is no. I mean there would be some new machinery which would have come like cut to length machinery in Dubai service center. How much increase is there in net block from December to March in Dubai? I think it’s how much increase you are looking. 510 crore rupees. Right?
Kumar Saumya
No, it’s a bigger number. If I take a look at the year end standalone and console network the difference is 108 crores.
Anubhav Gupta
Oh no. I think there could be. We are checking on this. So I will revert during this follow.
Kumar Saumya
Okay. And so next is on the capacity for the current service centers or the seven that you have operational. The annualized utilization is already above 90%. So will you need more capacity at the existing centers going forward?
Anubhav Gupta
We are going to add three more during this year. Okay. I mean as in like the exit service center, number of service centers should be around 11 to 12 for FY27.
Kumar Saumya
Okay. And even within the existing seven centers, would there be further capacity addition?
Anubhav Gupta
We are going to add new products here. Okay. Right now we are selling HR related products. We will also start selling coated products through these service centers.
Kumar Saumya
Okay.
Anubhav Gupta
Which are more value added and carry better margin.
Kumar Saumya
Okay. So this would be in the profiling business?
Anubhav Gupta
No, in service center business.
Kumar Saumya
Okay. And is it possible to provide a split of volumes between India and Dubai?
Anubhav Gupta
Yeah. For quarter. For quarter. Four, right?
Kumar Saumya
Yes. Yes.
Anubhav Gupta
So, so in service center we did around 191,000 ton. Right. For the full quarter from. From service Center Dubai Wall. 37,000 tons.
Kumar Saumya
10,000. Okay. And one last question from me is so you are also setting up capacity for pup panels and in presentation you mentioned the market we had around 150,000 tons and you all are setting up capacity for 80,000 tons. So that’s literally almost more than half of the market. So what gives you the confidence for this?
Anubhav Gupta
For renewable? Right,
Kumar Saumya
For puff panels?
Anubhav Gupta
See, I mean it’s a highly fragmented industry as of now. And as more and more what we are seeing trend is that there is a very strong demand which is going to come up over the next five years. All the new factories, warehouses which are getting built up, they are all moving from standard sheets to puff panels because it provides better insulation application. So it is not very expensive compared to standard sheets. All the developers who are building factories or who are building warehouses, they do prefer panels now.
So size may look smaller today for the industry, but in next three, four years it can actually double, triple from here.
Kumar Saumya
So basically you’re expecting a shift in the market from steel roofing sheets to probably top panel.
Anubhav Gupta
Yeah.
Kumar Saumya
Okay. And the margins, would it be similar or would be slightly higher in
Anubhav Gupta
As of now we do expect like 5 to 8% margins.
Kumar Saumya
Okay. Okay. That’s it from me. Thank you.
Operator
Thank you participants. You may press star and one to ask a question. Next question is from the land of Vikas Mistili from Moonshot Ventures. Please go ahead.
Kumar Saumya
Hi Anubhav, a couple of questions here. So in solar structures we have roughly 50 to 60 gigawatt of installation of solar is happening. And from that perspective our market tank should be pretty high on our capacity is 150k. So are we ready for further expansion as this supply side scenarios normalize and how much we are targeting for next couple of years?
Anubhav Gupta
So definitely, because see, I mean this 150,000 ton capacity which we built, it took us like what? Six to eight months. Okay. To build this capacity and operationalize it. So once we hit like 10,000 ton per month for four, five months, then we will order, then we will order more capacity. And that since we already have space at our service center, so the only lead time is the plant and machinery, which is like three to four months procedure.
Kumar Saumya
But in service center business we see that land acquisition is delaying some of the service centers. So can’t we be preparing slightly ahead of the schedule for the lead time
Anubhav Gupta
Now? Now we are in terms of, in terms of renewable capacity.
Kumar Saumya
Yeah.
Anubhav Gupta
Like I said, we already have land. Right. Infrastructure is already there. So ordering machines and installing machine is only three to four months procedure.
Kumar Saumya
Okay, fine. Got it. So my last question is on tech side. So we have good relationship with B2B customers. But what is the progress on that where we can take a smaller MSMU and so that we can also take that part of the pie that other platforms are enjoying likely from our plate and of business
Anubhav Gupta
For which business? B2B.
Kumar Saumya
Yeah. So let me rephrase the question. So we have good market share at least on terms of B2B side because we are tackling large customers. But at least on smaller SME side where other platforms like jsw, NEO or business and infra market has slightly better market share. So what is our strategy in order to tackle that and what is the technological progress in terms of application building in terms of retention of new smaller SME?
Anubhav Gupta
So see right now, I mean B2B business is a bit soft because of shortage of steel. Okay. I mean once the steel supply streamlines, once the steel supply streamlines, then we will become more aggressive in terms of, in terms of reaching out to small MSME customers. Right now, whatever supply we get, it gets absorbed within our larger customers.
Kumar Saumya
Totally buying your point. But for that, whatever the tech intervention, we need to push in. So that has to be done today itself.
Anubhav Gupta
Yep. So we, we do have everything on our SAP systems. Right. We do have visibility of what our customers buy from us, what skus they buy. So we try to rationalize all the inventory back end. But honestly, I mean till the time we have confidence on the steel supply and availability, we don’t want to invest too much into tech stack because again that’s like three to four months process. Whenever we want to push for it, we can do it.
Kumar Saumya
Okay. Okay. So I was coming to the fact that we are building SAP. That is from the perspective of our side, are we solving smaller SME customers problem from their perspective, from their vantage point to Give them better services like other platforms are doing.
Anubhav Gupta
Currently, Currently like I said, because of shortage of steel. I mean you can’t. There is no material. How can you service like tech requires material to move from my go down to customers go down if I don’t have steel. Right. What will tech do?
Kumar Saumya
That’s totally understood. But I think building smaller clients take its own time. And if some X client is already doing business with another platform, why would they switch to you in a short span of two, three months? So that is, that is the point I’m trying to make
Anubhav Gupta
Also because now our focus is on more value added business verticals. Okay. Which are service centers and renewable structures and these new set of profiles what we have launched. Okay. So since B2B business is more of like higher revenue generation and low profit margin. So as a company the strategy is to focus more on value added products.
Kumar Saumya
Okay. Okay. That’s also my.
Operator
Thank you. Next question is from the line of Darshan Zaveri from Crown Capital. Please go ahead.
Kumar Saumya
Hello. Hello. Yeah, good evening. Thank you so much for taking my question. Firstly, congratulations on a great set of results. So I just wanted to harp a bit about margin. So it delivered quite good margins in Q4. But due to the board, do we see like a temporary dip in Q1? How do we see the margin profile right now? Because you know some of our segments will get impacted because of the war. So how do we see that? So,
Anubhav Gupta
So see margins, margins. If you look at the EBITDA pattern for all the verticals, it will will mirror what we did in quarter four. We don’t see any deterioration in EBITDA spread in quarter one.
Kumar Saumya
Okay. So we don’t see any kind of. And so just wanted to know like we have given like a clear in the PPD invention business growth visibility of like you know, 50 CAGR over the next three years. So that’s going to be mean, right? Like every year we can expect expect kind of level of growth or how do you see that stuff like will it be back ended or how would the growth be? Sir,
Anubhav Gupta
I think it wouldn’t be back ended. You will see performance getting better and better every quarter. Okay. From here on,
Kumar Saumya
Okay. So basically every quarter and quarter we’ll have some level of growth. Because why I was asking that in terms of revenue, FY26 has been kind of flattish to FY25, right. So just wanted to ask with regards to that, right? FY27 we can see a much higher level of growth.
Anubhav Gupta
So revenue was flat, right. But EBITDA grew by 30% plus. Okay. Because in FY25 more volume came from B2B business. In FY26, we scaled down B2B business and focus more on value added verticals. Again, I’m naming those three verticals Service centers, Renewable structures and Steel profile business. Okay, so even if there is no 50% growth in revenue, my EBITDA can still grow more than 50% because whatever new business vertical I’m adding, it is more profitable.
Kumar Saumya
So overall we should see 50 growth in terms more of like bottom line rather than top line. Because that would be the main focus.
Anubhav Gupta
I mean, yeah, three years of our existence that we need to focus heavily on bottom line. We just don’t want to do businesses for revenue generation.
Kumar Saumya
That’s it from my perspective. Thank you so much.
Operator
Thank you. Next question is from the line of Ajax Lakhani from Unifi amc. Please go ahead.
Unidentified Participant
Yeah, hi Abhiav. I wanted to understand that is there any, you know, inventory loss or gain in the EBITDA number that you’ve reported for the quarter?
Anubhav Gupta
I did mention that there was inventory gain of six crore rupees in quarter four. FY26.
Unidentified Participant
Understood. And for full year 26, the margins that we had, you know, because steel prices have gone through a challenging year, how much has been, you know the. In the total EBITDA that you’ve reported of about 137 crores. How much has been the variation due to inventory? Could you just give that number for 26?
Anubhav Gupta
In first half there was not much swings in steel prices. In quarter three there was inventory loss of around 15, 20 crores if I remember correctly. And in quarter four there is a gain of 6 crore rupees. So I guess the full year EBITDA could have been more than 150 crore if we adjust the steel price swings.
Unidentified Participant
Understood. And just so that I understand your business model, your in the upswings or downswings and steel prices that may happen could happen because of the lead and lag that is there, you know, as products come in and go out. And barring that, you are not intending to take any inventory risk on books. Is that broadly correct?
Anubhav Gupta
That is right. Just to add to it that as our EBITDA spreads will improve because of more value added products. So that impact will also keep on reducing ages. Okay. Now when I’m doing 60, 70, 80, 90 crore of quarterly EBITDA which is coming from more value added products. So then that hit will also. The impact will also keep on diminishing.
Unidentified Participant
Understood. And broadly, Abhinav you, I recall many calls back you had probably given a broad range of EBITDA margins across each of these. So just could you give a again broad understanding? So service centers earn between 3 to 5% EBITDA? I think the trading business was 1 to 2. Is that understanding correct? And can you call that out for renewable and profiling?
Anubhav Gupta
I mean let us decode them into EBITDA per ton basis rather than percentage margin basis. So B2B business is between 700 to 1000 rupees per ton depending on the steel environment, the steel price environment in the country at that point of time. E2B business is pretty stable from 1800 to 2100 rupees per ton. The renewable structure business is around 3 to 4,5000 rupees per ton and the so and the steel profile is 5 to 8000 rupees per ton.
Unidentified Participant
Understood. Okay. And is it fair to assume that the volume that you have done of broadly 400k tonnes in metal trading was also because you had the off take agreements with your suppliers and the entire intent even next year would be to again maybe keep this volume or probably reduce it? I don’t know how you determine that, but the entire thing is to build the profiling products business, renewable structures business more and more. Right. So effectively trading is just an, is it done with a very opportunistic sort of lens or is it just like because you need to pick up a certain, you know, you know, raw material that you have committed to your supplier.
That is how you construct the business. Heuristic
Anubhav Gupta
Trading for SGMart can be infinite. Okay, so as much steel we get, we can sell that much steel earning 700 to 1000 rupees per ton. We did get 410,000 ton of steel in FY26. If we get more steel in FY27, the trading, the B2B sales will be higher accordingly. But as of now it is difficult to say because the the month of April and the commitments for May so far are slow only. And it is also because even the steel mills, the volumes, the production levels are low because of overall crisis for energy, gas, etc.
Unidentified Participant
Understood. And finally, just my last question is Anubhav, even GSW for example is, you know, creating a platform. Of course the broad contours of where they may concentrate would be different to yours. So how would you comment about this? Because you know, you’re buying from GSW and then creating this entire value added piece. Now JSW themselves is doing something akin. So how would you comment on this
Anubhav Gupta
Now the products are very different ages, okay? What we are doing in SGMart and what other platforms are doing the businesses are very, very separate, different.
Unidentified Participant
Okay, fine. Thanks and all the best.
Operator
Thank you. Next question is from the line of Kit Co from Serene Alpha. Please go ahead.
Rahul Kumar
Hi Am audible
Operator
Please go ahead.
Rahul Kumar
Good evening sir. My question is on our bottom line since last many quarters we are speaking about EBITDA and tax will go hand in hand But I’m not seeing that in numbers, right? We did around 137cr ETA this year which is more than 30% growth. But if you look at the bottom line it is hardly 10%, 10 11% kind of growth we are delivering. So why this is not happening, sir?
Anubhav Gupta
So see, I mean if you look at, if you look at like the conversion of net profit from ebitda, there are two factors, okay which are impacting the PAC growth. One is the depreciation and second is the interest cost. So over the last one year what we have done is that we have started investing heavily into creation of network of new service centers. Plus we are also going heavily on building capacities for renewable structures and other steel profiles, right? So it does require investment into fixed block, fixed gross block.
That’s why the depreciation levels are high and all the cash flow what we are generating internally that is also being used for these capex commitments. So that’s why the EBITDA growth is not matching that growth. When we had mentioned this, that time the business was more asset light, okay? It was dependent more on trading, okay? But like I said trading business we realized that it is not showing too much value addition. The dependency on steel availability is pretty high. Okay? Then the steel price fluctuation also hurts the earnings.
So I mean over the last one year the whole business model has moved towards more value addition. And as we are investing into building that value added business there will be higher depreciation cost upfront and all the internal cash flow generation will be used to meet the capex commitments. But what can I also tell you is that the benefits from this, okay are going to be significant, right? You have already seen that how service centers are operating beautifully. The stability these service centers have brought for SGMart plus the renewable structure business, again the massive pie, right?
Not too much of competitive space and this unique vertical which we are building up other skills profiles, getting into highly fragmented market and leveraging on our brand and distribution network it’s going to give massive fruits to the company. So we are not too much worried about that. My bad growth is not matching My EBITDA growth, it will start happening in a year or so. They don’t bother to
Rahul Kumar
Means you are still like for next two years also we are doing the capex. So is it correct to understand that the EBITDA growth will still be higher than the PAD growth? Right. Because of the elevated depreciation will keep on coming in the. In the PL statement. Right?
Anubhav Gupta
Yeah. So I think the better way to look is the cash profit. Right. Because depreciation will remain high. So if you look at the cash profit growth and EBITDA growth that should not be too much difference.
Rahul Kumar
Okay. And this 50cr EA profit, this quarterly EBITA profit that we are comfortably like we’ll be doing it despite all these headwinds we are speaking about.
Kumar Saumya
That’s right.
Rahul Kumar
Correct. Thank you sir. And all the best for the.
Operator
Thank you. Next question is from the line of Amit, a retail investor. Please go ahead.
Kumar Saumya
My question is on which basically Ebitda Toyton for different businesses. So would you be able to share what was the solitary bit done that you made in solar business profile business and, and this service center business
Anubhav Gupta
We will give you the broad range, right? The B2B business is 700 to 1000 rupees per ton. The service center business is 1700 to 2000 rupees per ton. The solar business is 3000 to 5000 rupees per ton. And the profile business is 5000 to 8000 rupees per day.
Rahul Kumar
And is this expected to remain in this range in the current year which is FY20 Karna.
Anubhav Gupta
That is right.
Rahul Kumar
So this is it. Thanks. Thank you.
Operator
Thank you. Next question is from the line of Kunal Shah from INAM Asset Management. Please go ahead.
Kumar Saumya
Hello. Hi. My question was regarding the service center business. So you said we have already procured land for certain service centers. So can you elaborate on which? Apart from the seven which we have, where else have we procured land? Hello.
Anubhav Gupta
Yeah. So Ahmedabad, indoor Kolkata. These are the three cities where we have acquired the land.
Kumar Saumya
Okay. Okay. But so Amnon Indore will be just shifting the from the rental crematory new premises and in Kolkata is the one which will be adding the.
Anubhav Gupta
Yes. And then we are actively scouting in Hyderabad, Chennai in. In Punjab. So yes. Maybe in next two, three months you will see more land acquisition coming in our books.
Kumar Saumya
Okay. Okay. And regarding the profile business, so what’s the current capacity that we have? Because given the number combined right now with renewables individually could share the profile business capacity.
Anubhav Gupta
Around 120,000 ton per annum.
Kumar Saumya
Okay. 10,000 tons perfect. Okay. And in the service center volume for FY26 of 606 lakh ton. What’s the stock and sale volume? Approximately
Anubhav Gupta
It’s around 20%. 20, 25%, 75% is cut to length.
Kumar Saumya
Okay, got it. And in terms of, you know, this quoted steel availability for renewables, how do you see the situation evolving? When do you see things normalizing?
Anubhav Gupta
I think in month of May it should be better. Then June, it will further improve. So April was better than March. Okay. And we have entered in month of May, things look better compared to April.
Kumar Saumya
Okay. Okay. So this run rate of 5,000, 6,000 tons that can be maintained with whatever commitments you are getting. That is
Anubhav Gupta
Right.
Kumar Saumya
Okay. Perfect. Perfect. Great. Thank you. I’ll get back in the queue.
Operator
Thank you. Next question is from the line of Rahul Kumar from Wakariya Fund. Please go ahead.
Kumar Saumya
Yeah. In this strategic plan of, you know, 50% growth over next three years, can you help us understand the split of the businesses, you know of this among the various segments? Let’s say at the end of three years.
Anubhav Gupta
Can you please repeat?
Kumar Saumya
I was saying, we have given this target of 50% business growth over next three years. Right. So if we have to think of the various segments at the end of three years, can you help us understand the split between the various segments? But how much would be the service center? How much would be renewables?
Anubhav Gupta
Sure. So in three years, I mean we may have around 20 service centers. Okay. And each service center doing 8 to 10,000 ton monthly volume. So around 2 million turn off. 2 million turn off volume is coming from service centers. Okay. On analyzed basis, then. Then for. Then for solar business, renewable structure business, in three years we should be doing around 250,000 ton. Okay. 15, 20. So around the 300,000 ton of. 300,000 ton of annual volume from sustainable structures and similarly 300,000 ton of volume from the other steel profile structures.
B2B is difficult to predict. Okay. I mean it can be like a million tonnes, 2 million ton, 3 million tons. Tough to give guidance on B2B business.
Kumar Saumya
Okay. Okay. Because. Fair enough. And in terms of shortage of steel also I think you mentioned earlier. So what is the current status in terms of supply? Is it still constrained or what is the discussion happening with the suppliers now?
Anubhav Gupta
Yes. See, I mean there is overall shortage of steel as a commodity in the country. And things will improve as the gas supply to steel mills improves. I mean everyone says that in a month or so things will get better. We also hope that things will get better in a month. Or so see, I mean it’s so unfavorable. No, I mean, I mean, I mean war goes on for 30 days, 60 days, 90 days. I mean unless until the fuel supply becomes streamlined it will remain a challenge.
Kumar Saumya
Okay. And just to, just to you know clarify service center business which was I think 600 odd thousand tons, you’re saying that in next 3 years it will go 3x to 2000 or 2 million tons. Am I correct in assuming that?
Anubhav Gupta
What I’m saying is the exit run rate will be that after three years. Okay,
Kumar Saumya
Okay, okay. Okay, yeah. That’s all. Thank
Rahul Kumar
You.
Operator
Thank you. Next question is from the line of Kunal Shah from Nam Asset Management. Please go ahead.
Kumar Saumya
Hi, thanks for the opportunity again. So one broad level question on capital allocation. So we are doing around 200, 250 crore kind of cash operation and which seems to be sufficient enough to know the fund, the capex that we have planned around 300 crores for next two years. So we have around 1000 crores cash on books. So broadly what’s the plan with this cash that we have?
Anubhav Gupta
So Kunal, right. Cash on books is 750 crores, not thousand crores. That is point number one now, now like whatever cash flow generation will be there, okay. For next two, three years we’re going to deploy that, we’re going to deploy that in capacity building. Plus the existing cash on books might get utilized for incremental working capital requirement as well as the business scales up pretty quickly. So I guess maybe after two years when majority of the capex is completed, right. Then we have strong pileup of cash on the books.
Okay. And then we can think of dividend, etc. But for next two years we want to focus on growth and focus on capacity building.
Kumar Saumya
Got it, got it. And also one thought which I had was that in terms of inorganic are service centers are kind of the profiling renewable business available in an inorganic manner which could help us grow faster.
Anubhav Gupta
I mean we keep on evaluating the such assets. Okay. But then the quality of such assets also should match sgmart profile. So we haven’t come across any such asset where we can go and actually finish the transaction. We are evaluating the day in day out but nothing where we could have said okay yes I want to acquire this asset.
Kumar Saumya
So I mean by quality would mean the kind of equipment they deployed or kind of, or kind of business they’re doing. That’s it,
Anubhav Gupta
That’s right.
Kumar Saumya
Okay, great. Thank you so much.
Operator
Thank you ladies and gentlemen. That will be the last question I’ll now hand the conference over to the management for closing comments.
Anubhav Gupta
I guess I mean just to reply to that earlier question regarding Dubai operations from the gentleman. I think there is some calculation error what he’s doing. I mean as per our calculation there is no increase in net block at Dubai level and similarly there is no deterioration in the gross margin. But still if that gentleman has I mean further question he can reach out to our team. We have given contact details of our CFO and general manager strategy in the presentation. He can reach out to them.
Moderator any question we can take up. We have five minutes please. Any further questions
Operator
So let me check. No sir. So we can conclude.
Anubhav Gupta
Sure. Okay. Thanks so much everyone. I look forward to see you again in our quarter one FY27 earnings call. Thank you.
Operator
Thank you very much on behalf of Ambit Capital Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect. Thank you.