SBC Exports Bags ₹32 Cr Manpower Contract Extension from BHU Cancer Hospital

Synopsis: A six-month extension of an existing manpower services contract with a Banaras Hindu University cancer hospital, worth Rs. 32 crore, adds fresh visibility to a diversified small-cap’s institutional client base, even as its rapid stock rally sits alongside some cash flow and governance flags worth watching.

Shares of a diversified small-cap spanning garments, IT and manpower services, and travel operations came into focus after the company disclosed an extension of its existing contract with Mahamana Pandit Madan Mohan Malaviya Cancer Centre and Homi Bhabha Cancer Hospital, part of Banaras Hindu University in Varanasi, for technical and non-technical manpower services.

With a market capitalization of Rs. 2,004.28 crore, the shares of SBC Exports Limited were trading at Rs. 42.09 per share, up 0.21 percent from its previous closing price of Rs. 42 apiece. The stock is trading at a rich P/E of roughly 58.40 times trailing earnings.

The extension covers the period from July 1 to December 31, 2026, six months, valued at Rs. 32 crore, and continues on the existing rates and terms of the original two-year contract first disclosed in March 2024. The company’s own filing attributes the extension to satisfactory performance during the original contract term, and it is not a related-party transaction.

A renewal rather than a fresh win, this arrangement still matters commercially: Rs. 32 crore over six months works out to roughly Rs. 64 crore on an annualised basis, a meaningful sum against the company’s trailing twelve-month consolidated revenue of Rs. 358 crore. Continuity with a government-run cancer hospital under a premier university also signals institutional trust that can support future tender eligibility in the healthcare manpower segment, one of three distinct businesses SBC now runs alongside garments and travel services.

 investors should note that manpower supply contracts of this kind typically run on thin margins, and the extension being struck on unchanged rates rather than a renegotiated, higher-value structure means it adds revenue continuity rather than margin expansion. The company’s consolidated operating margin stood at roughly 9 percent over the trailing twelve months, in the same range as its historical margin profile for this line of business.

What the Numbers Also Show

SBC’s growth story looks strong on the surface: revenue has compounded at 31 percent over the trailing twelve months and profit at 70 percent, and the stock itself has roughly tripled over the past year. But several items in the underlying financials warrant a closer look before treating that growth as unambiguously clean. Screener flags that the company may be capitalising interest costs, a practice where interest expense is added to the value of assets on the balance sheet rather than charged against profit in the period it is incurred, which can flatter reported earnings relative to cash economics.

Operating cash flow was negative Rs. 69 crore in FY25, against a reported operating profit of Rs. 19 crore for the same year, a CFO-to-operating-profit ratio of roughly minus 344 percent. That gap reflects working capital swelling alongside revenue growth: the cash conversion cycle stretched to 152 days in FY25 from 87 days the year before, and borrowings jumped from Rs. 53 crore to Rs. 136 crore over the same period, continuing to Rs. 199 crore by September 2025.

None of this means the underlying business is troubled, fast-growing services companies commonly see working capital strain as they scale, and the BHU contract extension itself is a straightforward, low-risk renewal. But the combination of aggressive revenue growth, negative operating cash flow, rising leverage, and a valuation at roughly 70 times earnings against a textile and apparel peer average closer to 24 times, per available comparative data, means the market is pricing in continued flawless execution.

Promoter holding has also declined steadily, from 65.81 percent in mid-2023 to 50.35 percent as of March 2026, and 32.9 percent of what promoters still hold is pledged, a governance signal investors typically watch alongside growth numbers rather than in isolation. Pledged shares can force selling pressure if the stock falls sharply, since lenders may call for additional collateral or liquidate pledged holdings.

Business Overview

Incorporated in 2011 and headquartered in Mirzapur, Uttar Pradesh, SBC Exports operates across garments and carpets, IT and manpower supply services, and, through subsidiary Mauji Trip Limited, travel and tour operations. The company has built a client base spanning government e-governance projects, manpower supply to institutions such as BHU’s cancer centre, and export garment orders to markets including Dubai. For the trailing twelve months, consolidated revenue stood at Rs. 358 crore with net profit of Rs. 30 crore, against Rs. 299 crore and Rs. 13 crore respectively for the year ended March 2025.

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