Usha Martin — Q4 FY26 earnings call

Call held 30 Apr 2026

Management summary

Usha Martin delivered a strong Q4 and full-year FY26 performance, marked by robust revenue growth, significant margin expansion, and a transition to a net cash positive balance sheet. The company's 'One Usha Martin' program and strategic shift towards higher-value products contributed to improved profitability and cash generation, despite challenges from geopolitical tensions in the Middle East and raw material price volatility. Management is confident in sustaining growth and margins by focusing on specialized products and capacity expansion.

Highlights

  • Consolidated revenue for FY26 grew to INR 3,691 crore, up 6.2% year-on-year, driven by core businesses and strong international traction.

  • Operating EBITDA for FY26 increased by 18% to INR 705 crore, with margins expanding to 19.1% from 17.2% in the previous year, reflecting improved product mix and efficiency.

  • Q4 FY26 saw robust performance with revenue of INR 979 crore (up 9.3% YoY) and operating EBITDA of INR 212 crore, achieving a strong 21.6% margin.

  • The company transitioned to a net cash position of INR 332 crore in FY26, from a net debt of INR 63 crore in the prior year, with standalone operations becoming entirely debt-free.

  • Operating cash flow conversion was healthy at 104% of operating EBITDA, generating INR 736 crore, enabling internal funding of capex and debt reduction.

Concerns

  • The ongoing conflict in the Middle East led to slower customer activity and project delays in Dubai and Saudi Arabian markets, impacting Q4 rope volumes by approximately 900 tons.

  • Broader geopolitical situations created tightness in raw material availability and put pressure on input costs, though managed effectively.

  • LRPC revenues were lower by 20.4% in Q4 FY26, indicating a decline in this segment.

Key financials

2 periods

Q4 FY26

  • Consolidated Revenue
    ₹979 Cr
    YoY +9.3%
  • Operating EBITDA
    ₹212 Cr
    YoY +52%
  • Operating EBITDA Margin
    21.6%
  • EBITDA per ton
    ₹39,500

FY26

  • Consolidated Revenue
    ₹3,691 Cr
    YoY +6.2%
  • Operating EBITDA
    ₹705 Cr
    YoY +18%
  • Operating EBITDA Margin
    19.1%
  • PAT from Continuing Operations
    ₹491 Cr
  • Net Cash Position
    ₹332 Cr
  • ROCE
    20.6%
  • Net Working Capital Days
    194 days

What they filed

Q1 FY27: revenue up 16.5%, net profit up 40.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue891 861 896 887 908 +2%917 +7%979 +9%1,033 +16%
EBITDA161 143 140 145 173 +7%176 +23%212 +51%208 +43%
Net profit109 92 101 101 110 +1%108 +17%148 +47%142 +41%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Rope Revenues (Q4 FY26)
    14.8% Growth
  • Wire Revenues (Q4 FY26)
    31.2% Growth
  • LRPC Revenues (Q4 FY26)
    -20.4% Growth
  • International Revenues (FY26)
    57% Share of Total Topline

Order book

medium confidence

Execution

visibility for the rope demand for the next 6 months at least

Management indicated a healthy order book for specialized projects and good visibility for higher value-added products for H1, with strong demand for rope for the next 6 months, but did not quantify the total order book value.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹300 Cr internal accruals
    • Increase manufacturing capacity for elevator ropes
    • Increase capacity for specialized wires
    • Increase capacity for plasticated LRPC
    • Inorganic growth for global presence (value-added and rigging)
    In next 2 years, we intend to spend close to INR 300 crore to increase our manufacturing capacity for elevator ropes and some more opportunities where we see for some specialized wires and also increasing our capacity of plasticated LRPC. So, in next 2 years, we see a capex of close to INR 300 crore. In addition to this, as we mentioned in our opening remarks that we would also look at opportunities of some inorganic growth in areas where we want to expand our presence globally, particularly in the value-added and rigging and helping us to get close to the customers.
  • Debt Net ₹332 Cr
    • Repayment Repaid debt amounting to INR 192 crore, leading to a reduction in finance costs by around INR 10 crore. ₹192 Cr
    As a result, we closed the year with a consolidated net cash position of INR 332 crore and with standalone operations now entirely debt free.
  • Liquidity Liquidity disclosed The company has strong operating cash flows and a positive net cash position, providing the bandwidth to invest from internal accruals.
    from a capital allocation standpoint, with strong operating cash flows and a positive net cash position, we have the bandwidth to invest from internal accruals.

Guidance & targets

Volume

  • Overall Volume Growth Volume · next 2-3 years · High confidence 10-12%
    We hope that both with a lower base and these product approvals and the markets which we have developed and the capability from the plant, we should be able to get to overall, of course, this includes Wire Rope as well as some specialized wires and plasticated LRPC in the entire basket, we hope to be able to get to that 10% to 12% volume growth for the next 2 to 3 years.

    — Rajeev Jhawar

Margin

  • Operating Margin Margin · going forward · High confidence 20%

    Previously 18-19% → 20%

    Yes, as you rightly said, as the product mix is also getting better, we should be able to sustain at the 20% margin level. And our goal would be to continue to drive better mix and improve the margins going forward.

    — Shreya Jhawar

Capex

  • Capex Spend Capex · next 2 years · High confidence INR 300 crore
    In next 2 years, we intend to spend close to INR 300 crore to increase our manufacturing capacity for elevator ropes and some more opportunities where we see for some specialized wires and also increasing our capacity of plasticated LRPC. So, in next 2 years, we see a capex of close to INR 300 crore.

    — Rajeev Jhawar

Capacity

  • Plasticated LRPC Capacity Capacity · soon, post approvals · Medium confidence 4,000-4,500 tons/year

    Previously 2,500 tons/year → 4,000-4,500 tons/year

    See, as far as plasticated LRPC, currently, we do around 2,500 tons a year. That will, based on the various approvals, we are hoping to get soon, enable us to double our quantity of plasticated LRPC from 2,500 to 4,000, 4,500 tons.

    — Rajeev Jhawar

Operations

  • Thailand Plant Operations Improvement Operations · over the next 18 months · Medium confidence significant improvement
    So, this process has started. I would say over the next 18 months, we will see a significant improvement in the operations of our Thailand plant.

    — Rajeev Jhawar

What to watch in Q1 FY27

Overall Volume Growth Rate

Next quarter (Q1 FY27) and subsequent quarters
Current ~5% in ropes for Q4 FY26 (impacted by Middle East), 6.2% consolidated revenue growth for FY26.
Target 10-12%

Why it matters

This is a key indicator of market penetration and capacity utilization, crucial for overall revenue growth and validating the strategic shift to value-added products.

But that being said, in FY '27, the priority is volume growth while at the same time, maintaining the quality of mix. And with the groundwork that we have done over the past few quarters and over the past year in terms of market development with the capacities being commissioned in Ranchi as well, we are confident of stronger volume growth in the upcoming year.

Risks & concerns

  • Middle East Geopolitical Conflict Impact

    medium

    Ongoing conflict led to slower customer activity, project delays, and supply chain disruptions in Dubai and Saudi Arabia, impacting Q4 rope volumes by approximately 900 tons.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    Broader geopolitical situation created tightness in raw material availability and put pressure on input costs, specifically LPG prices increasing significantly.

    Management acknowledged

  • Long Project Execution Cycles for Infrastructure Projects

    low

    Actual rope demand from large projects like Parvatmala will only materialize in 2-3 years due to their 6-7 year execution cycles, potentially delaying volume realization from these segments.

    Management acknowledged

Q&A highlights

7 direct
Volume Growth vs. Product Mix Strategy Direct
So, in terms of volume growth for this quarter, volume growth in ropes was at about 5%. Like we mentioned, the focus has increasingly for us moved towards specialized and high-performance rope applications. And in those categories, tonnage growth is not always linear, but we do have better quality of revenue with stronger realizations and healthier margins.

Clarifies management's strategic trade-off between pure volume growth and higher-margin, specialized products, and acknowledges external factors impacting Q4 volumes.

Asked by Aman Kr Sonthalia

Margin Sustainability Amidst Rising Costs Direct
Yes, you are right, steel prices, gas prices, they have been on an increasing trend since January. We are happy to say that so far, we have been able to pass on the increase for the wire segment, LRPC segment, and that would continue. Similarly, for Wire Ropes also, we, on one hand, have been able to pass on a large part of the increases combined with better product mix. So, as you said, we have been able to expand our margins even in this situation where prices have been increasing. Our endeavor would be to continue to do the same in the coming quarters.

Addresses investor concern about maintaining high margins in an inflationary environment, highlighting the company's ability to pass on costs and leverage product mix.

Asked by Aman Kr Sonthalia

Growth Prospects for New Segments (Plasticated LRPC & Synthetic Slings) Direct
On the plasticated LRPC, we have been working with a few customers for their approvals, and I am happy to say that we have progressed well on those... So, we are expecting a healthy growth in the plasticated LRPC once these approvals are in place in the next few weeks. Also, on the synthetic sling, in the very first year, we have been able to get some very good traction with approvals from customers and repeat orders. And we expect this also to significantly grow in this year and in the coming years.

Provides specific timelines and positive outlook for emerging, high-value product lines, indicating future growth drivers.

Asked by Aman Kr Sonthalia

International Market Share and Growth Strategy Direct
In terms of the growth, it went from 7% of our topline to 9% of our topline for this year. So even though on the ground, it has its share of challenges around tariffs, trade uncertainties, etc., we do see good opportunities. It is a high value market. So, you know elevator ropes, again, crane ropes, mining ropes, the work that we have done over the last few years did support us to navigate these challenging times. So going forward as well, still our market share in the U.S. is sub 5%. So, there is tremendous opportunity for growth.

Details the company's performance and strategic focus in key international markets, highlighting areas of opportunity despite challenges.

Asked by Aman Kr Sonthalia

Quantifiable Benefits of 'One Usha Martin' Initiative Direct
So, in terms of 'One Usha Martin', like we mentioned in the opening remarks that the benefits of that, we are already seeing on the cost side; - where fixed costs, fixed employee costs as well as the admin costs have come down substantially this year... So on the cost side, we have been able to get significant fixed costs about 3%, admin cost about 7%, so, all the cost savings we have taken at 'One Usha Martin', we have seen over the last 18 months, about INR 65 crore to INR 70 crore of cost savings that we have been able to make.

Provides concrete financial figures for the impact of the internal efficiency program, validating its success.

Asked by Shraddha Kapadia

LPG Cost Inflation and Mitigation Direct
Of course, the cost has gone up from the earlier level of INR 60,000 per ton to around INR 120,000 to INR 130,000 per ton... We have been able to pass on the cost, as a part of our product pricing to the customers. And we have taken advanced steps, as we mentioned in our opening remarks, that we created enough buffer in our system and the supply chain management to book at the right time, even at these costs to ensure that there is no disruption, and we do not expect any disruption on account of gas shortage.

Explains the impact of raw material price increases and the proactive measures taken to mitigate risks and maintain supply continuity.

Asked by Kartikeya Pandey

Capex Plans and Capacity Expansion Details Direct
So, we are planning to increase our rope capacity by close to 6,000 tons with this and almost 70% 75% of the capex would be going to expand this capacity. And the balance 30% would be used to augment the capacity of specialized wires, as well as further increasing the capacity by addition of few equipment and testing facilities for plasticated LRPC.

Provides a clear breakdown of the planned INR 300 crore capex, detailing its allocation across different product segments and expected capacity additions.

Asked by Pranav Iyer

Parvatmala Project Contribution to Volume Growth Partial
For the Parvatmala project, there are a lot of activities going on. But I think the actual, real rope demand from this will come in probably 2 to 3 years, as the projects move to the final stages of implementation. So when we talk about 10% to 12%, it encompasses and covers all the different segments of our products. And overall, we look at the volume growth.

Clarifies the long-term nature of large infrastructure projects like Parvatmala and their delayed impact on immediate volume growth, providing realistic expectations.

Asked by Kartikeya Pandey

3 min read 7 chapters

Detailed narrative

Strong Financial Performance and Margin Expansion

Usha Martin concluded FY26 with a consolidated revenue of INR 3,691 crore, marking a 6.2% year-on-year growth. Operating EBITDA surged by 18% to INR 705 crore, leading to a margin expansion to 19.1% from 17.2% in the prior year. The fourth quarter alone saw revenue of INR 979 crore (up 9.3% YoY) and an operating EBITDA of INR 212 crore, achieving a robust 21.6% margin, the highest since the steel business divestment.

Transition to Net Cash Positive and Debt-Free Status

The company significantly strengthened its balance sheet, moving from a net debt of INR 63 crore in the previous year to a consolidated net cash position of INR 332 crore in FY26. This was supported by strong operating cash flow of INR 736 crore, representing 104% conversion of operating EBITDA. Furthermore, standalone operations are now entirely debt-free, following the repayment of INR 192 crore debt during the year, which also reduced finance costs by approximately INR 10 crore.

Strategic Focus on High-Value Products and Operational Efficiency

Usha Martin's strategy to prioritize specialized and high-performance rope applications, such as those for cranes, elevators, and mining, has resulted in better realizations and healthier margins. The 'One Usha Martin' program has been instrumental in driving operational efficiencies, leading to INR 65-70 crore in cost savings over the last 18 months, including a 3% reduction in fixed employee costs and over 7% in administrative expenses, while enhancing overall cost discipline.

International Market Growth and Diversification

International revenues now constitute 57% of the total topline, an increase from 55% last year, indicating strong global traction. The European market, accounting for 26% of topline, performed well, while the U.S. market grew from 7% to 9% of topline. Management sees tremendous growth opportunities in the U.S. given its current sub-5% market share in high-value segments like elevator, crane, and mining ropes.

Targeted Capex for Capacity Expansion and New Products

The company plans a capital expenditure of approximately INR 300 crore over the next two years. This investment is primarily aimed at increasing rope manufacturing capacity by 6,000 tons (70-75% of capex), augmenting specialized wires, and enhancing plasticated LRPC capabilities. This capex is expected to be funded through internal accruals, supporting the strategic shift towards higher-value products and market expansion.

Navigating Geopolitical Headwinds and Raw Material Volatility

Despite challenges posed by the Middle East conflict, which led to slower customer activity and project delays in Q4, Usha Martin effectively managed its operations. The company proactively built raw material inventory and successfully passed on input cost increases in wire and LRPC segments. A favorable product mix in ropes also helped mitigate the impact of raw material price volatility, such as the significant increase in LPG costs from INR 60,000/ton to INR 120,000-130,000/ton.

Thailand Plant Modernization and Product Focus

Usha Martin is actively modernizing its fully integrated Thailand plant, similar to its Ranchi and Hoshiarpur facilities. This modernization aims to increase capacity for specialized cords, elevator ropes, and port crane ropes. Management anticipates significant improvements in the operations of the Thailand plant over the next 18 months, aligning with the company's focus on value-added products.

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