Metrics raised 2
- EBITDA margin floor raised to 20% minimum (new base established)
- OceanFibre revenue target raised to ~GBP 10 million over next few years (from GBP 2–3 million)
Metrics cut 1
- FY27 Plasticated LRPC volume target cut to 3,500–4,000 tons (from prior 6,000–10,000 ton guidance); full capacity utilization deferred to next year
Usha Martin Limited - Q1 FY27 Earnings Call Summary
[Call date not specified in transcript - quarter ended June 30, 2026]
Event Participants
Executives
3
Abhijit Paul, Rajeev Jhawar, Shreya Jhawar
Analysts
6
Aman Kumar Sonthalia, Rajesh Majumdar, Shraddha Kapadia, Shiv Kumar Prajapati, Varun Jain, Vineet Thakur
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹1,033 crores | +16.4% YoY (from ₹884 crores); value grew faster than volume across businesses |
| Wire Rope Revenue | +18% YoY | Value-led growth; volumes marginally lower due to Middle East disruption |
| Wire & Strand Revenue | +31.7% YoY | Strong growth driven by domestic demand and export traction |
| LRPC Revenue | +3.9% YoY | Marginal growth; plasticated LRPC recorded highest quarterly volume/value |
| Operating EBITDA | ₹208 crores | +44% YoY (from ₹145 crores); driven by richer mix and cost recovery |
| EBITDA Margin | 20.1% | +380 bps YoY; expanded despite input cost inflation |
| EBITDA per Ton | ₹40,581 | Value-added rope component at 73% vs 70% in FY26 supported profitability |
| PAT | ₹142 crores | +41% YoY (from ₹101 crores) |
| Operating Cash Flow (pre-tax) | ₹242 crores | Cash conversion of ~116% of operating EBITDA |
| Free Cash Flow | ₹135 crores | After funding CapEx of ₹73 crores in Q1 |
| Net Cash Position | ~₹465 crores | Closed quarter with strong net cash balance |
| ROCE | 21.4% | Improved from 20.6% as on March 2026 |
| Credit Rating | IND AA- (upgraded from IND A+) | Upgraded by India Ratings with stable outlook; reflects strengthened financial profile |
| CapEx (Q1) | ₹73 crores | Focused on elevator rope capacity expansion and manufacturing efficiency |
Geographic & Segment Commentary
Wire Ropes: Value grew 18% YoY despite marginally lower volumes. Middle East volumes declined
28% (1,000 tons) due to geopolitical disruption, but realizations improved ~36% on better pricing and mix, holding revenues flat. India grew ~12% in volume and ~21% in value across crane, elevator, and fishing segments; US growth driven by elevator and mining; Europe strong in oil & offshore renewables and value-added services.Wires: Volumes up ~19% and revenue up ~32% YoY. Portfolio is largely domestic-driven; exports are a significant growth opportunity. Supplies to select European customers in automotive and rockfall protection (Galstar) applications underway, with headroom to scale as approvals deepen.
LRPC (Plasticated & Black): Plasticated LRPC gained traction with highest-ever quarterly volume and value, including first international order for stay cable application. Black LRPC is commoditized; plasticated offers genuine differentiation. FY27 target of 3,500–4,000 tons (vs ~2,500 tons in FY26) against 6,000-ton capacity.
OceanFibre (Synthetic Slings): Revenue on an upward trend for five consecutive quarters; transitioning from pilot project to consistent contributor. Estimated TAM of ₹1.5–2 billion growing at high double-digit rate; gross margins of 65–70%. Target to scale from GBP 2–3 million to ~GBP 10 million over next few years.
Middle East: Volumes down ~28% due to port, marine, offshore, and construction disruptions; Saudi projects delayed or stalled; distributors conservative on stocking. Management focused on inquiry conversion, value-add route, and mix optimization. Region represents ~9% of revenue.
Europe: Largest market after India at ~27% of Q1 revenue; growth from oil & offshore renewables and value-added services. Headroom identified in Germany, Italy, Denmark, and Norway (North Sea area).
Company-Specific & Strategic Commentary
Value-Added Product Shift: Value-added ropes reached 73% of component mix vs 70% in FY26. Sustained investments in manufacturing and R&D enable technically demanding applications with high barriers to entry (development testing, customer qualification, approvals).
Elevator Rope Capacity Expansion: ~6,000 MTPA additional capacity under commissioning in phases beginning October; project scheduled for completion by Q1 FY28. Domestic elevator market growing ~20% with Usha Martin at 60–65% market share; capacity currently a constraint.
Pricing Power & Cost Pass-Through: Wire rod prices +7% YoY, zinc +28% YoY, freight elevated. Management passed on 100% of absolute input cost increases in commodity products (wires, LRPC) and recovered steel/gas increases in wire ropes, enabling margin expansion to 20.1%.
Credit Rating Upgrade: India Ratings upgraded long-term rating to IND AA- from IND A+ with stable outlook, reflecting healthy cash generation and prudent capital allocation.
CBAM Preparedness: Wires (HS 7217) already under CBAM definitive period; wire rope (HS 7312) expected from FY28. Consultant appointed to assess per-ton cost impact; working with suppliers and customers on mitigation strategy.
One Usha Martin Initiative: Cross-geography collaboration across India, Dubai, UK, and Thailand plants to drive synergies and improve profitability.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Wire Rope Volume Growth | 10–12% for FY27 | Inclusive of current Middle East conditions; assumes situation doesn't worsen. Supported by strong inquiry pipeline, new capacities, India +12% momentum |
| Revenue Value Growth | ~15% for FY27 | Driven by product mix improvement and realization gains |
| EBITDA Margin | Minimum 20% base; gradual upward movement | New base established; sequential variation of 20–21% possible due to product/geographic mix |
| CapEx | ₹250–300 crores for FY27; similar run-rate annually | Elevator rope expansion, furnace modernization, maintenance CapEx to support 10–12% volume / ~15% value growth |
| Plasticated LRPC Volumes | 3,500–4,000 tons FY27; full capacity utilization next year | Approvals progressing; one major domestic global customer verbally confirmed with paperwork pending; international traction building |
| OceanFibre Revenue | Scale to ~GBP 10 million over next few years (from GBP 2–3 million) | High-margin business to add meaningfully to bottom line |
| Elevator Rope Capacity | Phased commissioning from October; complete by Q1 FY28 | 6,000 MTPA addition to address growing domestic elevator demand |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East Geopolitical Disruption | Volumes down |
| Input Cost Inflation | Wire rod +7% YoY, zinc +28% YoY, elevated freight. Management has passed on costs fully to date; sustainability depends on continued pricing power and customer transparency |
| CBAM Impact from FY28 | Wire rope (HS 7312) to enter CBAM definitive period in FY28; wires already covered. Per-ton cost impact under assessment; mitigation includes supplier engagement and customer communication |
| Volatile LRPC Realizations | Monsoon-related project slowdowns and steel price volatility creating near-term price depression in LRPC; management expects healthy realizations in wire/wire rope to offset |
| Asia Pacific Project Delays | Project-related delays in Q1 characterized as deferred, not lost demand; management building regular crane/elevator business to reduce project dependence |
| Commoditization of Black LRPC | Black LRPC increasingly commoditized; plasticated differentiation and export approvals are key to defending margins in this segment |
Q&A Highlights
Wire Rope Volume Performance & Middle East Impact
- Question: How did wire rope volumes perform YoY/QoQ, what's the volume outlook, and how much volume was lost to the Middle East crisis? (Aman Kumar Sonthalia)
- Answer: Volumes were marginally lower due to Middle East (~28% decline, ~1,000 tons) impacted by geopolitical conflict affecting port, marine, offshore, and construction; Saudi projects delayed/stalled and distributors conservative. Asia Pacific saw project-related delays (deferred, not lost). India (+12%), US, and Europe grew volumes. Management remains confident of 10–12% volume growth for FY27. (Shreya Jhawar)
Middle East Reconstruction Opportunity
- Question: If geopolitical conditions improve, how significant could the opportunity be and which products benefit? (Aman Kumar Sonthalia)
- Answer: Meaningful upside across portfolio: construction/infrastructure reconstruction would support crane ropes (piling applications) and elevator ropes; port/logistics investment would drive demand for port cranes, marine applications, GP ropes; oil & offshore recovery would support large-diameter and drill line ropes; bridge/infrastructure projects would create plasticated LRPC opportunities. Company's own factory and rigging shop in Saudi provides advantage. (Shreya Jhawar)
New Verticals: Plasticated LRPC, Galstar Wires, OceanFibre
- Question: How did the three newer businesses perform and what's the outlook? (Aman Kumar Sonthalia)
- Answer: Plasticated LRPC achieved highest quarterly volume and value; first export order for stay cable application secured; approvals opening domestic and export markets. Galstar (zinc-aluminum coated wires) seeing good domestic demand and European supply for rockfall protection; priority is broadening customer base and approvals. OceanFibre revenue up for five consecutive quarters; targeting GBP 10 million from GBP 2–3 million over next few years with 65–70% gross margins. (Shreya Jhawar)
Margin Sustainability & Steel Pass-Through Mechanism
- Question: Steel prices rose ~13% QoQ but EBITDA per ton only improved ~3%; what limited expansion? (Shraddha Kapadia)
- Answer: Management does not look at percentage pass-through; it's the absolute steel increase (~₹7,000/ton) that is recovered. A 13% steel price increase does not translate to 13% on finished products selling at ₹180,000–₹350,000/ton. Commodity products (wires, LRPC) have 100% cost pass-through; wire rope recovers steel and gas increases. EBITDA per ton of ₹40,581 reflects this mechanism plus mix improvement. (Rajeev Jhawar)
EBITDA Margin Guidance
- Question: What is sustainable EBITDA margin going forward given strong YoY expansion? (Vineet Thakur)
- Answer: Minimum base of 20% EBITDA margin is the new floor; sequential variation in the 20–21% range is possible due to product and geographic mix. Goal is to maintain upward trajectory through mix improvement, operating leverage, and cost discipline, with 10–12% volume and ~15% value growth. (Rajeev Jhawar)
CapEx Outlook
- Question: What is CapEx guidance for this year and beyond? (Rajesh Majumdar)
- Answer: FY27 CapEx of ₹250–300 crores, including elevator rope capacity expansion (~6,000 tons) and furnace modernization. Similar annual run-rate of ₹250–300 crores (including maintenance CapEx) is expected to sustain 10–12% volume and ~15% value growth in coming years. (Rajeev Jhawar)
Plasticated LRPC Approvals & Volume Guidance
- Question: Were the expected approvals received, and will FY27 volumes hit the 6,000–10,000 ton guidance or higher? (Varun Jain)
- Answer: One major global customer (high domestic share) has verbally confirmed approval; paperwork pending, and the party has already started quoting with the product. FY27 target is 3,500–4,000 tons (vs ~2,500 tons in FY26); full capacity utilization expected next year. Company is evaluating pre-emptive capacity expansion for 18–24 months out as international projects pick up. (Shreya Jhawar)
Market Share Strategy: US, Europe, India
- Question: Where do you see market share in US (sub-5%), Europe (10–12%), and India over 3–5 years? (Varun Jain)
- Answer: US is under-penetrated at ~9–10% of revenue; elevator, mining, and oil & gas are focus segments for expansion. Europe is ~27% of revenue with established UK/Netherlands operations; headroom in Germany, Italy, Denmark, Norway. India: 65–70% overall market share; elevator at 60–65% with capacity as constraint given 20% market growth; ports at >95% share with focus on retention as port expansion proceeds. (Shreya Jhawar)
UM Cables & Thailand Turnaround
- Question: UM Cables is not doing well and Thailand margins are negative; what's the turnaround strategy? (Shiv Kumar Prajapati)
- Answer: UM Cable is not core; evaluating strategic use of its West India facility for value-added wire/wire rope business. Long-term, not a business the company wants to remain in. Thailand has improved Q1 margins with better order book outlook; a strategic model is being developed over next six months to enhance product mix and realizations, including better integration with Indian plants (similar to Dubai/UK synergy model). (Rajeev Jhawar)
CBAM Impact Post-FY28
- Question: What headwinds from CBAM post-FY28 and what's the mitigation strategy? (Shiv Kumar Prajapati)
- Answer: Wires (HS 7217) already under CBAM definitive period; wire rope (HS 7312) expected from FY28. Consultant appointed to assess per-ton cost impact; emissions from own processes are negligible relative to input material. Working with suppliers on input options and with customers on joint strategy to minimize impact. (Shreya Jhawar)
Product Realizations by Segment
- Question: What are the quantum realization numbers by product? (Vineet Thakur)
- Answer: Wires ~₹85,000/ton; LRPC blended (black + plasticated) ~₹79,000/ton; domestic rope ~₹190,000/ton; international rope ~₹370,000–380,000/ton, one of the highest seen, driven by Europe/US growth and value-added services. (Shreya Jhawar)
Key Takeaway
Usha Martin delivered a strong Q1 FY27 with consolidated revenue of ₹1,033 crores (+16.4% YoY), EBITDA of ₹208 crores (+44% YoY) at a 20.1% margin (+380 bps), and PAT of ₹142 crores (+41% YoY), with cash conversion of 116% and net cash of ~₹465 crores. Growth was value-led across wire ropes (+18% value despite Middle East volume decline of ~28%), wires (+32% revenue), and plasticated LRPC (highest-ever quarterly volume). The company generated ₹135 crores of free cash flow after ₹73 crores CapEx, and received a credit rating upgrade to IND AA-. Strategy centers on specialized product mix (73% value-added ropes vs 70% in FY26), elevator rope capacity expansion of 6,000 MTPA (commissioning from October, complete Q1 FY28), scaling OceanFibre toward GBP 10 million, and deepening export approvals for Galstar wires and plasticated LRPC. Management guides to 10–12% volume growth, ~15% value growth, and a 20% minimum EBITDA margin for FY27, with CapEx of ₹250–300 crores. Key watch points remain Middle East geopolitical stability, input cost pass-through sustainability, and CBAM exposure from FY28, balanced against a strong balance sheet and differentiated product pipeline that underpins confidence in consistent profitable growth.