💰 Financial Performance

Revenue Growth by Segment

The Wire segment achieved a robust 14.2% YoY growth in Q2 FY26, while the core Wire Rope segment, representing 74% of total revenue, saw a stable 2.6% YoY increase. Total consolidated revenue for Q2 FY26 reached INR 908 Cr, a 1.9% increase from INR 891 Cr in Q2 FY25.

Geographic Revenue Split

International operations contribute 58% of total revenue, with a strategic focus on Europe, Americas, and APAC. Domestic Indian operations benefit from infrastructure momentum in Tier-2 and Tier-3 cities.

Profitability Margins

Net Profit Margin for FY25 stood at 13.9%, down from 15.7% in FY24. However, Q2 FY26 PAT from continuing operations rose to INR 128 Cr from INR 109 Cr YoY (+17.4%), driven by a shift toward high-value specialty products and a 10% reduction in fixed costs.

EBITDA Margin

Operating EBITDA margin improved to 19.1% in Q2 FY26 from 18.0% in Q2 FY25. This 110 bps expansion is attributed to the 'One Usha Martin' cost-optimization initiative and a higher mix of high-margin specialty ropes versus lower-margin LRPC products.

Capital Expenditure

The company is funding growth through internal accruals, maintaining a net cash position of INR 111 Cr as of H1 FY26. Specific planned capex includes capacity expansion at the Ranchi facility and new machinery for high-performance ropes to optimize product mix.

Credit Rating & Borrowing

The company maintains a healthy interest coverage ratio of 36.6 in FY25 (though down from 63.1 in FY24 due to increased finance costs). It has transitioned to a net-debt-free status, repaying INR 157 Cr of debt in H1 FY26 using internal accruals.

⚙️ Operational Drivers

Raw Materials

Steel is the primary raw material, with average prices recorded at INR 52,316 per tonne in H1 FY26, down from INR 55,392 in FY24. Steel costs are a critical driver of the EBITDA/tonne, which stood at INR 31,656 in H1 FY26.

Import Sources

Not explicitly disclosed in available documents, though the company operates manufacturing facilities in India (Ranchi), the UK (Brunton Shaw), and the UAE to serve global markets.

Key Suppliers

Not disclosed in available documents; however, the company maintains a 'Supplier Code of Conduct' and 'Sustainable Procurement Policy' for its value chain partners.

Capacity Expansion

Current initiatives include increasing production capacity at the Ranchi facility and debottlenecking existing lines. New high-performance rope machines are expected to be operational in Q3 FY26 to support volume growth in Q4.

Raw Material Costs

Raw material costs are influenced by global steel price fluctuations. EBITDA per tonne increased to INR 34,915 in Q2 FY26 from INR 28,502 in Q1 FY26, reflecting better procurement and product mix despite volatile input prices.

Manufacturing Efficiency

Efficiency is being driven by shifting production of high-volume European exports directly to India while focusing UK facilities (Brunton Shaw) on high-value offshore clients and R&D.

Logistics & Distribution

Logistics savings are being achieved under the 'One Usha Martin' transformation by optimizing global supply routes and reducing the need for high inventory buffers in overseas warehouses.

📈 Strategic Growth

Expected Growth Rate

19-20%

Growth Strategy

Growth will be driven by a 'Value Migration' strategy, shifting from low-margin commercial LRPC to high-technical-requirement specialty ropes for mining, cranes, and elevators. Expansion in Saudi Arabia's oil and offshore segment and the launch of new products like 'Oceanfibre' (HMPE slings) are key pillars.

Products & Services

Specialty wire ropes, LRPC (Low Relaxation Pre-stressed Concrete) strands, Galstar ropes, Plasticated LRPC, and Oceanfibre high-performance HMPE slings for offshore lifting.

Brand Portfolio

Usha Martin, Brunton Shaw UK, Oceanfibre, Galstar.

New Products/Services

Launched 'Oceanfibre' HMPE slings for offshore lifting. New high-performance ropes for elevators and cranes are expected to contribute to higher realizations and volume growth from Q4 FY26 onwards.

Market Expansion

Targeting Saudi Arabia as a key volume driver for oil and offshore projects. Expanding domestic reach into Tier-2 and Tier-3 Indian cities to capture infrastructure growth.

Market Share & Ranking

Usha Martin is ranked among the world's top 5 specialty wire rope manufacturers, with a presence across 6 continents.

Strategic Alliances

The company maintains global operations through subsidiaries like Brunton Shaw UK and facilities in the UAE and Asia-Pacific to ensure proximity to international clients.

🌍 External Factors

Industry Trends

The industry is shifting toward specialty, high-performance ropes with longer life cycles. Usha Martin is positioning itself as a specialty solutions provider rather than a commodity manufacturer to capture this trend.

Competitive Landscape

Faces competition in the commodity LRPC segment from multiple players, leading to thin margins. In specialty ropes, competition is global but limited to a few high-end manufacturers.

Competitive Moat

Moat is built on technical expertise in specialty ropes, a global distribution footprint across 6 continents, and a low-cost manufacturing base in India. Sustainability is driven by high switching costs for technical applications like mining and elevators.

Macro Economic Sensitivity

Highly sensitive to global infrastructure spending, mining activity, and oil & gas exploration cycles. Domestic performance is linked to Indian government infrastructure momentum.

Consumer Behavior

Customers are increasingly demanding sustainable and high-performance products. Usha Martin is responding with energy-efficient manufacturing and specialized products like plasticated LRPC.

Geopolitical Risks

Trade barriers such as US tariffs pose a risk. The company maintains manufacturing flexibility across India, UK, and UAE to reroute production and mitigate geopolitical trade impacts.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental and regulatory standards across multiple jurisdictions (India, UK, UAE). Compliance with Human Rights and Anti-Corruption policies is mandated across 100% of operations.

Environmental Compliance

Targeting a 10% reduction in energy intensity and 50% reduction in water withdrawal by FY30. Non-compliance with air emission limits (PM, SOx, NOx) is identified as a material risk that could lead to penalties.

Taxation Policy Impact

The company reported a normalized tax rate for continuing operations; however, specific percentage changes in fiscal policy impacts were not detailed.

Legal Contingencies

Recognized an expense of INR 17.8 Cr in Q2 FY26 related to the transfer of land parcels to Tata Steel following the erstwhile sale of the Steel division. This is reported under discontinued operations and does not impact operating cash flow.

⚠️ Risk Analysis

Key Uncertainties

Delayed project activity in Saudi Arabia and potential global economic slowdowns could impact volume growth by an estimated 5-10% if recovery is stalled.

Geographic Concentration Risk

58% of revenue is international, providing geographic diversification but exposing the company to global trade volatility and regional regulatory shifts.

Third Party Dependencies

The company relies on 22 major dealers/distributors for 29.84% of its sales, with the top 10 accounting for 83% of that segment, representing a moderate distribution dependency.

Technology Obsolescence Risk

Risk of lagging global sustainability expectations. Mitigated by R&D in cleaner technologies and high-performance synthetic fibers like HMPE.

Credit & Counterparty Risk

Debtors turnover increased slightly to 46 days in FY25 from 44 days in FY24, indicating a need for continued vigilance in credit management despite overall healthy working capital.