Usha Martin Q1 FY27 Earnings Call — Analysis (NSE: USHAMART)
Usha Martin kicks off FY27 with revenue crossing ₹1,000 Cr for the first time; EBITDA surges 44% YoY to ₹208 Cr and margin expands 380 bps to 20.1%.
The take
Q1FY27 Consolidated Revenue ₹1,033 Cr ( +16.4% YoY ) . New guidance — FY27 wire rope volume growth fy27 10% to 12% . New story: Shift to specialized, high-value products .
Results
Q1 FY27 consolidated revenue ₹1,033 Cr (+16.4% YoY); operating EBITDA ₹208 Cr (+44% YoY); EBITDA margin 20.1% (+380 bps YoY); PAT ₹142 Cr (+41% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹1,033 Cr | +16.4% | yoy · Q1FY27 |
| Operating EBITDA | ₹208 Cr | +44% | yoy · Q1FY27 |
| EBITDA Margin | 20.1% | +380 bps | yoy · Q1FY27 |
| Profit After Tax | ₹142 Cr | +41% | yoy · Q1FY27 |
| Wire Rope Revenue Growth | 18% | yoy · Q1FY27 | |
| Wire & Strand Revenue Growth | 31.7% | yoy · Q1FY27 | |
| LRPC Revenue Growth | 3.9% | yoy · Q1FY27 | |
| Value-Added Rope Share | 73% | point_in_time · Q1FY27 · 70% in FY26 | |
| EBITDA per Ton (Blended) | ₹40,581 | point_in_time · Q1FY27 | |
| Operating Cash Flow before Tax | ₹242 Cr | point_in_time · Q1FY27 | |
| Free Cash Flow | ₹135 Cr | point_in_time · Q1FY27 | |
| Return on Capital Employed (ROCE) | 21.4% | +80 bps | point_in_time · Q1FY27 · vs 20.6% as of Mar-26 |
| Net Cash Position | ₹465 Cr | point_in_time · Q1FY27 · as of Jun-26 |
Guidance
FY27 wire rope volume growth maintained at 10-12%, value growth ~15%; EBITDA margin base minimum 20%; capex ₹250-300 Cr; elevator rope capacity of 6,000 MTPA by Q1 FY28.
What management committed to
- Usha Martin will achieve 10% to 12% year-on-year volume growth in [wire rope] for FY27. — 10% to 12%, FY27
- [Wire rope] value growth in FY27 will be around 15% year-on-year, supported by product mix. — around 15%, FY27
- Usha Martin will incur capital expenditure of approximately ₹250 crore to ₹300 crore in FY27, including routine maintenance capex. — ₹250 crore to ₹300 crore, FY27
- Elevator rope capacity will be expanded by approximately 6,000 metric tons per annum, with phased commissioning beginning October 2026 and full completion by Q1 FY28. — 6,000 metric tons per annum, Q1FY28
- Usha Martin will maintain a minimum EBITDA margin base of 20% going forward, with upward bias as product mix improves. — minimum 20%, going forward
- Plasticated LRPC volumes will reach 3,500 to 4,000 tons in FY27. — 3,500 to 4,000 tons, FY27
- [Plasticated LRPC] capacity of 6,000 tons will be fully utilized in FY28. — fully utilize the capacity (6,000 tons), FY28
- Oceanfibre (synthetic sling) revenue will scale from [current] £2-3 million to approximately £10 million over the next few years. — £10 million, over the next few years
Key themes
Value-led growth, margin expansion, capacity build
How the narrative shifted
- Shift to specialized, high-value products: Management positions the 73% value-added rope share, plasticated LRPC, GALSTAR wires and Oceanfibre as proof that value is growing faster than volume, with sustained investment in R&D and customer approvals creating barriers to entry.
- Margin resilience despite input cost inflation: Wire rod (+7% YoY), zinc (+28% YoY) and elevated freight costs were fully passed through; pricing actions, mix improvement and cost discipline expanded EBITDA margin to 20.1%, which management sees as the new base.
- Strong balance sheet enables growth investments: Net cash ₹465 Cr, 116% cash conversion, credit rating upgrade and ₹250-300 Cr annual capex (elevator rope, furnace modernisation) are presented as a virtuous flywheel: cash generation funds capacity-led profitable growth.
- Geographic diversification hedging geopolitical risk: Middle East volume fell 28% due to conflict, but domestic (+12%), US and European growth offset the hit; geographic and segment diversity protected overall revenue and margins.
- Replacement demand providing volume visibility: 85% of rope demand is replacement, with safety-mandated cycles ranging from weeks (mining dump ropes) to years (elevators), giving predictability to volume projections.
- Capacity expansion to capture elevator and LRPC opportunity: India elevator market growing ~20%, OEMs setting up locally; Usha Martin is adding 6,000 MTPA elevator rope capacity and pre-thinking further plasticated LRPC capacity to avoid a supply bottleneck.
- International customer approvals driving long-cycle growth: Europe wires exports, plasticated LRPC first international order, and a continuous pipeline of 10-12 new customer additions every few months across elevators, offshore, cranes and ropes signal multi-year qualification-driven market share gains.
Operational commentary
- Wire rope volumes: Middle East -28% YoY due to geopolitical conflict, offset by domestic +12%, US and Europe growth; ME realizations up ~36% YoY
- Wires segment: volumes +19% YoY, revenue +32% YoY; commenced exports to Europe for automotive and rockfall protection applications
- Plasticated LRPC: highest ever volume and value; first international order for stay cable application; target 3,500-4,000 tonnes in FY27
- Oceanfibre synthetic slings: consistent revenue growth, gross margins 65-70%, target scaling from £2-3 mn to £10 mn over next few years
- Elevator rope capacity expansion: 6,000 MTPA phased commissioning from Oct 2026, full completion by Q1 FY28
- Value-added rope mix increased to 73% (FY26: 70%), EBITDA per ton at ₹40,581
- Cash flow: operating cash flow ₹242 Cr (116% conversion), FCF ₹135 Cr; net cash ₹465 Cr
- Credit rating upgrade: India Ratings & Research upgraded to IND AA- from IND A+ with stable outlook
- Thailand operations: margin improved; strategic plan for synergy with India to be evolved in 6 months; U M Cables non-core facility may be repurposed for value-added wire/rope
Analyst Q&A
Q. What is the status of plasticated LRPC approvals that were expected within weeks?
One major approval from a global customer is verbally confirmed but some paperwork is still getting delayed; the party has already started quoting with our product in the market. We remain confident.
Q. How does the 10-12% volume growth guidance align with flattish Q1 volumes?
Middle East lost around 1,000 tonnes due to conflict, but domestic, US and Europe markets grew. With the current order pipeline and inquiries, we are reasonably confident of achieving 10-12% for the full year.
Q. What is the margin profile of Oceanfibre and why are margins so high?
Gross margins are 65-70%. It is a specialised heavy-lifting product used in oil, offshore and wind energy where steel wire ropes cannot be used, requiring critical approvals and track record.
Q. What is the strategic plan for the underperforming U M Cables and Thailand operations?
Cables is non-core; evaluating repurposing the facility for value-added wire and rope. Thailand plant margin improved; working on a plan over the next 6 months for better integration with India and profitability improvement.
Research and educational content only. Not investment advice.