Detailed Narrative
Q3 FY26 Financial Performance Overview
Usha Martin reported a strong Q3 FY26, with consolidated revenues growing 6.6% year-on-year to INR917 crore, driven by an improved product mix and stable demand. Operating EBITDA increased by 23.3% year-on-year to INR176 crore, leading to a margin expansion to 19.2% from 16.6% in the previous year. Net profit for the quarter stood at INR107 crore, up from INR92 crore in Q3 FY25, despite a one-time📎 cost impact of INR13 crore due to Wage Code implementation.
Segmental Performance and Product Mix Strategy
The Wire segment demonstrated robust growth with a 20.2% year-on-year revenue increase, while the Wire Rope segment, contributing 73% of total revenues, grew by 6.6%. In contrast, the LRPC segment experienced a 13% decline year-on-year. Management highlighted a strategic focus on value-added products such as elevator ropes, crane ropes, and oil & offshore ropes. This strategic choice, while potentially leading to slower volume growth in lower-value general purpose segments, aims to optimize overall margins and plant productivity.
Cash Flow, Debt Reduction, and Capital Efficiency
The company generated strong operating cash flow before tax of INR561 crore in Q3 FY26, achieving a robust 114% conversion of operating EBITDA into cash. For the nine-month period, free cash flow generation was INR318 crore. Usha Martin significantly reduced its gross debt from INR338 crore in March 2025 to INR172 crore by December 2025, resulting in a net cash position of INR198 crore. This financial discipline has also led to a healthy Return on Capital Employed (ROCE) of 20%.
Strategic Growth Initiatives and Market Expansion
Usha Martin is actively pursuing growth by expanding its customer base, particularly in new markets like Saudi Arabia, where it has onboarded approximately 60 new customers for its Rigging business. The company is also focused on securing OEM approvals for its value-added segments and engaging directly with end-customers to gain better demand visibility. Investments in the Thailand plant for modernization and cost optimization are expected to enhance financial performance in the next 4-6 quarters, supporting growth in Southeast Asian and European markets.
Capex Plans and Future Growth Outlook
The company plans an annual capex of INR250-300 crore over the next 2-3 years, including INR50 crore for maintenance, primarily for brownfield projects and debottlenecking. This investment is aimed at supporting a targeted 10-15% volume growth, focusing on value-added products. Management projects an 'early double-digit growth' in revenue for the next financial year and expects the full-year FY26 EBITDA to be in the INR680-700 crore range, while maintaining EBITDA margins at 19-20%.
Working Capital Management and CBAM Preparedness
Net working capital saw a reduction of INR97 crore from its peak in December 2024, attributed to improved inventory and receivables management. The company aims to further reduce working capital days to at least 180. Regarding the Carbon Border Adjustment Mechanism (CBAM), Wire Ropes are not yet impacted, but a small volume of Wires exported to Europe is. Usha Martin is proactively assessing potential impacts and investing in green manufacturing initiatives, such as a 4-megawatt solar power plant in Ranchi, to mitigate future risks.