SG Mart Q2 FY27 Results (NSE: SGMART)
Signal: Margin expansion
The read
The key inflection is margin: operating margin reached 5.2% in Q2FY27 versus 1.6% in Q2FY26 and 3.1% in Q1FY27, lifting PAT to ₹54.42 Cr despite revenue falling 16.2% YoY to ₹1,308.57 Cr; however, sequential revenue fell 23.2% and H1 operating cash flow declined to ₹29.81 Cr from ₹44.55 Cr, so the durability of the margin recovery and cash conversion are the next thesis tests.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,308.57 Cr | -16.2% | -23.2% |
| EBIT | ₹66.54 Cr | +117.1% | |
| Net profit | ₹54.42 Cr | +108.7% | |
| EPS | ₹4.29 | +103.3% | |
| EBIT margin | 5.2% |
P&L walk
Revenue declined to ₹1,308.57 Cr, down 16.2% YoY and 23.2% QoQ, but the 5.2% operating margin expanded 360bps YoY and PAT rose 108.7% to ₹54.42 Cr; the recovery is strong against the Q2FY26 base but sequential revenue momentum softened.
Key positives
- Operating margin improved to 5.2% from 1.6% YoY and 3.1% QoQ, producing PAT growth of 108.7% to ₹54.42 Cr despite revenue declining 16.2% YoY.
- EPS increased to ₹4.29 from ₹2.11 YoY and ₹3.62 QoQ, broadly tracking PAT and showing no material dilution signal.
- Property, plant and equipment increased to ₹445.78 Cr from ₹319.91 Cr at March 31, 2026, while capital work-in-progress reduced to ₹16.51 Cr from ₹19.94 Cr, consistent with assets moving toward operations.
Key concerns
- Revenue declined 16.2% YoY to ₹1,308.57 Cr and 23.2% QoQ from ₹1,704.25 Cr, so the margin recovery has not yet been accompanied by sequential top-line momentum.
- H1 operating cash flow fell to ₹29.81 Cr from ₹44.55 Cr despite H1 PAT of ₹99.60 Cr, highlighting weaker cash conversion during expansion.
- Operating margin recovery is being measured against a low 1.6% Q2FY26 base; the filing does not disclose volumes, realisations or product-level profitability to establish whether the improvement is structural.
Research and educational content only. Not investment advice.