Usha Martin

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.

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.

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 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.

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.

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.

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.