Usha Martin

Usha Martin reported consolidated revenues of INR 908 crore for Q2 FY26, marking a 1.9% year-on-year growth, primarily driven by a 14.2% YoY increase in the Wires segment. Operating EBITDA for the quarter stood at INR 173 crore, with margins improving to 19.1% from 18% in Q2 FY25. For the first half of FY26, revenues reached INR 1,795 crore, a 4.5% YoY increase, and PAT from continuing operations grew to INR 228 crore.

The company significantly strengthened its financial position, repaying INR 157 crore of debt in H1 FY26, fully funded by internal accruals. Operating cash flows before tax were INR 390 crore for H1 FY26, demonstrating a robust 123% conversion of operating EBITDA to cash flow. This led to a net cash position of INR 111 crore and a healthy ROCE of 20.3% by September 2025, with gross debt reducing from INR 338 crore in March '25 to INR 181 crore.

The 'One Usha Martin' transformation journey has begun to show early benefits in Q2 FY26, contributing to a reduction in fixed expenses by over 10% compared to FY25. Initiatives like establishing a shared back office, optimizing treasury operations, and centralizing negotiations have enhanced operational efficiency and financial discipline, aligning global teams under a unified vision.

Q2 volumes were softer than expected, particularly in the rope and LRPC segments. This was attributed to a strategic tilt towards higher-margin, value-added ropes, slight delays in commissioning new high-performance rope machines (now expected online in Q3), and subdued domestic demand due to delayed monsoon. Management anticipates higher throughput and growth in H2 FY26 as these factors normalize and post-monsoon activity resumes.

International business now accounts for 58% of the total topline, with growth primarily driven by Europe (28% of topline) and the Americas (9% of topline). The US market demonstrated improved topline and bottom-line performance, securing new customers and contracts despite tariffs. In Europe, the integration and model changes at Brunton Shaw, coupled with direct shipments from India, have enhanced competitiveness and reduced lead times.

Usha Martin continues its strategic focus on upgrading its product mix towards high-performance and value-added ropes and wires, which yield stronger realizations. The company aims to gradually increase its wire business volume to 100,000 tons over the next 2-3 years and expects GALSTAR line volumes to reach 5,000-6,000 tons annually from Q1 FY27. An annual capex of INR 300-350 crore is planned for organic growth over the next 2-3 years, funded by internal accruals.

The LRPC division experienced a 26% year-on-year decline in Q2, primarily due to the extended monsoon impacting infrastructure activity. However, the company is in the final stages of approval with a key customer for its value-added LRPC range. This milestone is expected to enable expansion in both India and export markets in the coming quarters^⏳, with significant volume growth anticipated from Q4 FY26 and Q1 FY27 as project deliveries pick up.

While working capital days appeared to increase due to calculation methodology (average over 12 months with a high base in Sep '24), net working capital reduced by over INR 108 crore from its peak in December '24. Management clarified that if calculated at the September '25 exit, working capital days would be down by 5-6 days, indicating improved efficiency and disciplined working capital management.