Usha Martin Ltd (USHAMART) Q1 FY27 Earnings Call: Revenue Crosses Rs. 1,000 Cr, Guides 20%+ EBITDA Margin Floor

Usha Martin Ltd held its Q1 FY27 earnings call on July 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Financials — Revenue Crosses Rs.1,000 Cr

• Consolidated revenue of Rs.1,033 crore — grew 16.4% YoY, marking the first time quarterly turnover exceeded Rs.1,000 crore.
• Operating EBITDA of Rs.208 crore — up 44% YoY, with margin expanding 380 bps to 20.1% driven by value-led growth and product mix improvement.
• Profit after tax of Rs.142 crore — up 41% YoY, reflecting operating leverage and margin expansion.
• Operating cash flow of Rs.242 crore — 116% cash conversion of EBITDA; free cash flow after Rs.73 crore capex stood at Rs.135 crore.
• ROCE improved to 21.4% — from 20.6% as of March 2026 (FY 2025-2026), with net cash position at Rs.465 crore at quarter end.
• Credit rating upgraded to IND AA- — by India Ratings and Research from IND A+ with a stable outlook, reflecting improved financial profile.

Wire Ropes, Wires & Speciality Products — Value-Led Gains

• Wire ropes revenue grew 18% YoY — despite flattish volumes; domestic rope volumes up 12% and value up 21%; Middle East volumes down 28% but realizations up 36%.
• Wires business: 19% volume growth, 32% revenue growth — largely domestic; exports to European automotive and rockfall protection customers initiated during Q1 FY27.
• Value-added rope share reached 73% — of wire rope revenue in Q1 FY27, up from 70% in FY 2025-2026, supporting margin structure.
• Plastigated LRPC achieved record volume and value — first international order for stay cable applications secured in Q1 FY27; FY27 volume target of 3,500-4,000 tonnes vs 2,500 tonnes in FY 2025-2026.
• Ocean Fiber (synthetic slings) revenue trending upward — improved over five consecutive quarters (Q2 FY26 to Q1 FY27); management targeting growth from $2-3 million to ~$10 million (period unspecified).
• Galfan wire (Galstar) sees good domestic demand — supply to Europe initiated; priority is broadening customer base and securing more approvals.

Pricing Power & Pass-Through Mechanisms

• New baseline EBITDA margin of minimum 20% — management stated this as the sustainable floor for FY 2026-2027 and beyond, with aspirations to move upward subject to global conditions.
• Input cost headwinds persisted — wire rod up 7% YoY, zinc up 28% YoY, steel up ~13% QoQ; pricing actions and mix improvement absorbed the impact, with EBITDA per tonne at Rs.40,581 in Q1 FY27.
• 100% pass-through on commodity products — for wires and LRPC, raw material cost increases are fully passed through; steel cost increase of Rs.7,000/ton is recovered per-ton, not as a percentage of selling price.
• Fuel cost increases passed on transparently — management confirmed no material impact on operating profitability from energy costs going forward.
• MD remuneration anomaly explained — the reported 4x jump in Rajiv Jhawar's compensation occurred because he voluntarily forewent ~Rs.8 crore bonus in FY 2024-2025 due to austerity measures.

Share Dynamics — India Dominance, US/Europe Headroom

• India domestic market share of 65-70% — elevator segment share at 60-65% constrained by capacity (market growing ~20%); ports share exceeds 95%.
• US market share below 5% — Americas contributed 9-10% of Q1 FY27 revenue; underpenetrated in elevators, mining, and oil & gas segments.
• Europe market share of 10-12% — region contributed 27% of Q1 FY27 top line; headroom in Germany, Italy, Denmark, and Norway.
• Replacement market accounts for 85% of business — safety-mandated cycles: mining dump ropes 1-2 weeks, ports 6-12 months, elevator ropes 5-8 years, providing predictable volume visibility.
• Middle East volumes declined 28% — geopolitical conflict impacted port, marine, offshore, and construction segments; management focusing on inquiry conversion and product mix to mitigate.
• New customer additions of 10-12 per quarter — across elevator, oil & offshore, and grain wire segments, with approval timelines of up to 2-3 years.

Volume Guidance — 10-12% for FY27; Capacity Expansion Underway

• FY 2026-2027 volume growth guidance maintained at 10-12% — despite flattish Q1 volumes due to ~1,000 tonnes of Middle East disruption; value growth target of 15% for the full year.
• Elevator rope capacity expansion of 6,000 tonnes/year — phased commissioning starting October FY27, with full completion by Q1 FY28; total FY27 capex guided at Rs.250-Rs.300 crore (Rs.73 crore incurred in Q1).
• Plastigated LRPC: FY28 expected to fully utilise 6,000-tonne capacity — management is considering additional capacity expansion in 18-24 months; one major global customer approval verbally confirmed but paperwork pending.
• Ocean Fiber TAM estimated at $1.5-2 billion — with gross margins of 65-70% for specialised applications (fiscal year unspecified for TAM estimate); management targets growth to ~$10 million over the next few years (period unspecified).
• Thailand segment margins improved in Q1 FY27 — management expects a well-evolved profitability plan within the next 6 months (~Q3/Q4 FY27), including potential integration with India operations.
• UM Cable facility not core — management is evaluating using the facility for value-added wire or wire rope production.

Guidance, Risks & Strategic Priorities

• CBAM: wire ropes expected to be covered from FY 2027-2028 — management cited "wire ropes (HS 7312) are expected to be covered from FY 2027-2028"; wires (HS 7217) already in definitive period; consultant engaged for cost impact assessment.
• Middle East crisis resolution is a potential tailwind — management views reconstruction and improved oil & gas activity as an opportunity to recover the ~1,000 tonnes of lost quarterly volume.
• Sustainable EBITDA margin of at least 20% — management targets this floor for FY 2026-2027 and beyond, supported by cost pass-through and mix improvement; further upside possible if global conditions remain supportive.
• Plastigated LRPC expansion subject to pending approvals — one major global customer approval verbally confirmed but paperwork not yet finalised; additional capacity decision awaits.
• Asia Pacific project delays are temporary — management targets crane ropes and elevator ropes to build recurring volumes in the region.