Usha Martin Ltd (NSE: USHAMART) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Rajeev Jhamwar — Managing Director
Abhijit Paul — Chief Financial Officer
Shreya Jhawar — Strategy and Growth Team
Analysts:
Anoop Poojari — Analyst
Aman Kumar Sonthalia — Analyst
Jasdeep Walia — Analyst
Rupesh Tatiya — Analyst
Prolin Nandu — Analyst
Kartikeya Kumar Pandey — Analyst
Sucrit Patil — Analyst
Rajesh Agarwal — Analyst
Anil Yadav — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the earnings conference call of Oosha Martin Ltd. As a eminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Anup Pujari from CDL India for opening remarks. Thank you. And over to you Anup.
Anoop Poojari — Analyst
Thank you. Good morning everyone and thank you for joining us on Usha Martin’s Q3 FY26 earnings conference call. We have with us Mr. Rajiv Jawar, Managing Director of the company, Mr. Abhijit Paul, Chief Financial Officer and Ms. Shreya Jawar from the strategy and Growth team of the company. We’ll initiate the call with opening remarks from the management following which we’ll have the forum open for a question and answer session. Before we begin, I would like to point out that some statements made in today’s call may may be forward looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.
I would now like to invite Mr. Rajiv Jawar to make his opening remarks.
Rajeev Jhamwar — Managing Director
Good morning everyone and thank you for joining us today. On behalf of the management team of Usha Martin, I would like to welcome you to our earnings conference call for the third quarter of FY26. I will begin with a summary of the quarter and then share our perspective on the drivers behind the performance. Consolidated revenues for the quarter grew 6.6% year on year to rupees 917 crore, driven by a better product mix and steady demand trends across our key markets. The wire segment continued to demonstrate strong momentum delivering a 20.2% year on year increase in revenues.
The wire rope segment reported 6.6% year on year revenue growth while the LRPC segment recorded a 13% decline year on year. Operating EBITDA for the quarter stood at rupees 176 crore representing a strong 23.3 year on year increase. Operating cash flow before tax stood at 561 crore translating into a robust 114% conversion of operating EBITDA into cash. These results are a direct outcome of the strategic choices we have made. First, we continue to push value accretive products and applications across our portfolio during the quarter. This was driven by higher traction in elevator ropes, crane ropes and oil and offshore ropes where requirements are more engineering driven and less price led.
This approach also extends to Ocean Fiber, our synthetic sling solution which complements our steel rope portfolio in specialized oil, offshore and lifting applications. Over the past few quarters this vertical has performed well for us and we have executed several projects successfully. The Ocean Fiber brand is now established and will continue to scale this segment. Second, our focus continues to be on adding new customers across geographies because that is what ultimately drives sustainable volume growth. We have a dedicated focus on tracking how many new customers we are onboarding each month across markets. A good example of this is Saudi Arabia.
Since starting our rigging business there, we have added around 60 new customers. While these customers are currently small in terms of volumes, but as the trials are completed and share of wallet increases, we expect volumes from this base to scale up. Third, our focus on cost structure continues to translate into better operating leverage. Over the past year we have simplified our processes and policies, improved productivity and rationalize overheads under the 1 Usha Martin framework. This further allowed us to deliver healthy margins during the quarter and achieved an EBITDA per ton of rupees 33,350 per metric ton and margins of 19.2%.
4 We continue to focus on generating strong cash flows, improving working capital and being thoughtful about capital allocation. This has allowed us to strengthen the balance sheet while continuing to invest. We closed the quarter with a net cash position of rupees 198 crore and an RoC of 20%. Looking ahead, growth remains a key priority for us and volumes are an important part of that equation. We see volume growth coming from new focused areas where we have been building capability over the last few years. This includes the high quality wires such as galstar value added ropes across segments like elevators, crane mining and oil and offshore as well as specialized products like the plasticated lrpc.
These are categories where customer qualification cycles are longer, but once established they tend to be more stable and recurring. With capex at Ranchi plant facilities largely stabilizing ongoing approvals and a healthy order book, we are well positioned for a pickup in volumes in the coming quarters. Additionally, over the past few quarters we have significantly deepened our engagement with the end customers. Our R and D teams are working closely with these customers to develop customized solutions enabling us to participate in more specialized and higher value requirements. This closer integration with customers also provide us with reasonable visibility on demand pipeline reinforcing our confidence in scaling up volumes and value.
While the global operating environment continues to present uncertainties, the steps we have taken over the past few years give us the confidence in how the business is positioned both operationally and financially. This gives us a stable base to continue into our next phase of growth. With this, I would like to now invite our CFO, Mr. Abhijit Kaul to present the financial highlights for the quarter. Thank you.
Abhijit Paul — Chief Financial Officer
Thank you and a very good morning to everyone. I will now provide a brief overview of the company’s operating and financial performance for the quarter and nine months ended 31st December 2025. In Q3FY26, our consolidated net revenue from operations stood at Rupees 917 crores as compared to 861 crore in Q3 of FY25. This performance was driven by a healthy 20.2% year on year growth in wire segment while Wild Rough segment which accounted for around 73% of the total revenues registered a 6.6% year on year growth. The growth was supported by an improved product mix and a disciplined approach to the volumes across key markets.
Operating EBITDA for the quarter stood at rupees 176 crores as compared to rupees 143 crores in the same quarter last year with margins improving to 19.2% from 16.6%. Net profit for the quarter Q3FY26 increased to 107 crore from rupees 92 crores in Q3FY25 despite a one time cost impact of rupees 13 crores arising from the implementation of the wage code. The improvement in profitability was driven by favorable sales mix and operating leverage supported by sustained cost discipline. For the nine months period ended 31st December 25th. Consolidated net revenue from operations stood at 2,712 crores registering a 5.2% year on year increase over nine months of FY25.
During the period the WAD segment recorded a strong 21.8% year on year growth while the Wild Rope segment grew by 5.6%. Operating EBITDA for nine months FY26 stood at 494 crores as compared to rupees 458 crores in nine months of FY25. Profit after tax from continuing operations for the nine month period stood at rupees 336 crores up from rupees 305 crore in the corresponding period last year. On the balance sheet front, overall net working capital has reduced by rupees 97 crores from the peak of December 24 reflecting continued improvement in working capital management across the business.
This reduction was driven primarily by Lower inventory levels and continued discipline in receivables management while maintaining a stable current ratio. Net working capital days have remained broadly stable on a trailing basis even as absolute working capital levels have declined indicating improved execution discipline. Free cash flow Generation during the nine month FY26 remains strong at rupees 318 crore supporting meaningful deleveraging of balance sheet Gross Debt reduced from rupees 338 crores in March 25 to rupees 172 crores as of December 25 Driven by internal accruals. As a result, the company has moved into a net cash position which has also led to a notable reduction in the finance cost and further strengthened our financial flexibility.
To conclude, our performance in Q3 and first nine months of FY26 reflects the benefit of our disciplined operating and financial approach with improving margins, strong cash generation and a strengthened balance sheet. With a net cash position and stable demand across key markets, we believe the company is well positioned to support growth initiatives while maintaining financial discipline. This brings me to the end of my address. I will now request the operator to open the line for Q and A session. Thank you.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if you wish to ask a question please press Star and one. We take the first question from the line of Aman Kumar Sonathliya from AK Securities.
Please go ahead.
Aman Kumar Sonthalia
Good morning sir and congratulations to the team for delivering a strong set of results in challenging macro environment. The healthy cash flow generation is particularly encouraging. But sir, I have few questions regarding the results. Sir, when do we expect a clear and sustained recovery in volume growth and which business segment are likely to lead this recovery?
Shreya Jhawar
Thank you so much for that question. Of course volume growth is very important to us. If we look at the nine month period so far we have seen about a 5% increase in volume growth. On the wire side we we have been able to increase volumes more but on the rope side of course there’s definitely further scope to push up volumes which have only been marginally up I would say year on year when we can see this growth. So of course from a CAPEX point of view our capacities are ramped up on the roadside and we are ready to Push up production.
Now it’s just about getting the right mix for optimal utilization and also pushing further on the market side. As we mentioned in the opening remarks, there are a few things that we are doing on that front to push up volumes, be it one, actively developing and tracking new customers across all our regions. Second, we are also working on more OEM approvals in the value added segment which is our focus, for example in elevators, cranes, etc. And also we are pushing more volumes through value added services which they’re working more directly with the end customers, which is helping us get better visibility on demand and you know, so we can plan the right mix better.
So all of these should help us, you know, in the coming quarters to push up volumes in Q4 as well and then in the next financial year.
Aman Kumar Sonthalia
Madam, whether we are seeing a good order position compared to last year?
Rajeev Jhamwar
Yes, we see a much healthier order book both on the domestic and export fronts based on all the various initiatives the company had taken. And with this increased order book position, which is much better than what it was same time or in the previous quarters, we expect that to also help us ramp up volumes in the coming this quarter and the coming quarters.
Aman Kumar Sonthalia
Generally, I think the high value orders, the capacity utilization comes down. So do we have better high value orders or is the commodity part of the order?
Rajeev Jhamwar
We have the commodity part of the order generally is on a month, on month basis. What comes the high value products and project based orders which are generally booked in advance because they are specialized in nature, require special raw material and extra manufacturing processing time for those. And we see a very good order book on those at the moment as well as good pipeline of inquiries. Hopefully that should help us in translating into more value added products in the future. The other part, what you said, of course, the value added production, the processing time is higher than the standard and general purpose ropes and we see generally a 30% lower output, 30 to 35% lower output if it’s a specialized product requiring higher compaction and higher tensiles of.
Aman Kumar Sonthalia
And sir, since Europe is our very important market, so how will free trade agreement translate into tangible benefit of RUSA Martin in term of export volumes, margins and overall competitiveness over the next 12 to 24 months?
Rajeev Jhamwar
The European market, the free trade agreement in any case for our product was nil beauty. So we don’t see any major issue, any major improvement. So it was already on a zero duty. So it, it is, it is business as usual for us. Our products did not attract any duty even earlier. So it’s it’s business as usual for us.
Aman Kumar Sonthalia
Okay sir. And so what is the current status of the Saudi Arabian business and how the Thailand operations are ramping up?
Rajeev Jhamwar
The Saudi Arabian business is slowly ramping up. We have seen quarter by quarter the business ramping up. As I mentioned earlier that we have developed 60 odd new customers and more and more are getting added and supplies have already started. So we expect from quarter four onwards improvement in the volumes and it should be a gradual ramp up in the next financial year and we should be able to see better numbers in the coming quarters.
Aman Kumar Sonthalia
And sir, about Thailand operation.
Rajeev Jhamwar
Thailand operation is the Thailand plant. We have made some capital expenditure and started some modernization of our plants and we see a good traction of orders coming in from southeast Southeast Asian markets and also with some European customers based on the new CapEx which we have initiated. However, we are in the process of also working on a cost optimization plan which would take another, I would say four to six quarters to be able to fully implement. And once these two initiatives are implemented, we hope that Thailand in the next four to six quarters should also start yielding better financial numbers.
Aman Kumar Sonthalia
And sir, one more question. How is the synthetic sling business scaling up and can it become a meaningful contribution to revenues and margin in the next financial year?
Shreya Jhawar
Yes. So the synthetics business is doing well. As we had mentioned, the Ocean Fiber which is our brand for the synthetic link solution that is now well established. We are consistently getting orders on a month, on month basis and we do hope to continue to grow this vertical in the next financial year. We’ve developed eight to 10 new customers and we’re also getting repeat orders from my existing customers. So you know, definitely over the next year and then over the next two to three years this should become an even more meaningful vertical for us.
Rajeev Jhamwar
And I’m happy to say that you know when we had initiated this project that it would take couple of years to break even. But I’m happy to say that in the very first year we would be cash positive in this business and the inquiry base is strong and we hope that these can help, as Shreya mentioned, to ramp up in the coming couple of years.
Aman Kumar Sonthalia
That’s great sir. When do we expect a significant volume in plasticated LRPC and how important can the product be in the company’s future growth?
Rajeev Jhamwar
Sir, plasticated LRPC is a very important part, particularly in the, you know, for the, for the infrastructure business. The approval process does take time. We have approvals from two or three of the big players and we are in the process of getting Approvals for a couple of more which we hope should happen in the next two to three months. Once these approvals are in place, we should not only be able to supply two products to them within India, but also an opportunity to export this. I would say give us another two quarters, say quarter one and quarter two.
Then we see a good ramp up of plastic material. RPC Also.
Aman Kumar Sonthalia
Closing question is which business segment and geographics will drive the next phase of growth for USA Martin and what strategy initiatives will help the company achieve the next level of growth?
Rajeev Jhamwar
Sir, you see the good part for. Usha Martin is that we have a fairly diversified geography and that is also helps us particularly in this geopolitical crisis as well as certain segments keep improving or keep coming down. So our focus would continue to be servicing all these geographies and trying to increase our volume wherever possible. Of course, Saudi is something we started new. We are going to ramp up. Europe continues to be an important. For. Our future growth as most of the big producers or are the and the big contractors are based out of Europe. Their rope demand may be in different parts of the world but generally the orders generate from Europe. So European customers, the OEMs would continue to be our prime area of growth within the rope segment. But at the cost of repetition we would continue to focus in every part because we have the capacity now. We want to ramp up our volumes and we don’t want to ignore any segment or any geography. So I think things should get better.
You will see the volume as well as the top line should start growing value wise in the coming quarters based on all these initiatives.
Aman Kumar Sonthalia
Thank you for your time and for the detailed responses. Sir. Thank you.
operator
Thank you. We take the next question from the line of Jasdeep Balia from Clockwind Capital Advisors. Please go ahead.
Jasdeep Walia
Hi sir, thanks for taking my question. Sir, could you tell us about trends and volumes in India, US and Europe in the third quarter which has just gone by, This is only about wire ropes.
Abhijit Paul
So going with the volumes you wanted, you want to know quarter, nine months figure, right?
Jasdeep Walia
No, in the quarter, third quarter how was the volume growth in India, US and Europe and wire ropes business?
Abhijit Paul
So year on year growth. So year on year this quarter we did around 13,000 tons in India, right? This is again. Against around 12,000 tonnes in the Q3 of FY25. So roughly I will say 10%, around 5 to 10, 5% growth over last year. Q3 on the European side it is more or less flat. It has similar levels a bit on the lower side. And U.S. growth of 5 to 8%.
Jasdeep Walia
Got it. So what is the reason that growth in India has been less than expectations in the last quarter? I think management had said that last quarter was subdued because of monsoons and hence the volume growth will come back in third quarter. But this quarter also we see mid single digit kind of growth in India and Europe is flat. So what are the reasons driving this subdued growth in volumes?
Shreya Jhawar
So overall in the domestic market we are seeing growth in the categories that the value added categories like for example elevator rope where we in the domestic market with the tier 2, tier 3 cities coming up, we are seeing growth in that segment. Even in the port segment we have reasonable market share. But we are seeing growth there where the growth has been slightly slower is on the GP rope segment and more of the low value wire rope segment. Where you know, as we mentioned before when we focus more on the value added side the overall productivity of the plant decreases.
So we have to make a choice as to, you know, where we want to focus our energy. So there are certain low value general purpose wire ropes where you know, realizations aren’t as attractive. And because our focus is on the value added side, that is some area that we have seen volume stay stable or decrease in.
Jasdeep Walia
Got it. And. Is high competition in low value GP ropes also the reason why maybe margins have gone down and hence you’re not interested in that, in growing that business.
Rajeev Jhamwar
No, it is not entirely true. Because the domestic market we are not other than very few selected area. It’s not because of competition, because of a strategic choice we have made that whether I produce those products on those machines or if I have the opportunity to produce value added products we produce which will give us a higher contribution on a particular line of product. And that choice we have made. So it’s not that we are losing price to competition. It’s a deliberate policy that if I have orders of the higher value added products we focus on servicing those customers.
But even the domestic market has been subdued. It has not been so aggressive on the GP rope market. And we will see that in quarter four onwards we are seeing a pickup of demand and we should be able to get better volumes in the coming quarters.
Jasdeep Walia
Got it sir. Thank you. That’s all.
operator
Thank you. We take the next question from the line of Rupesh Tatya from Long Equity Partners. Please go ahead.
Rupesh Tatiya
Yeah, thank you. Thank you for the opportunity and congratulations for very good set of numbers. My question is on this CBAM issue carbon border adjustment mechanism that Europe has come up with, I think it became applicable from January 26th. And I think in the FTA also, this was, I think there was no sort of relief on this front. And I think steel is one of the major industries. They are basically the target industry of this. So is there any impact of this on us? Do we need to change some source of steel, how we procure steel? Can you give some color around that?
Shreya Jhawar
Yes. So on the CBAM issue, if we look at our product line, it’s wire ropes and wires, right? So wire ropes comes under section 7312, which is currently as part of the definitive period in January 2026. It’s not included yet because it’s a more downstream complex steel product which will likely get included in the 2028 cycle. So from a wire rope standpoint, we are not impacted yet. On the wire standpoint, which comes under port 7217, that is something that is included. Most of the wires that we supply is, you know, largely in the domestic market in the United Kingdom, which is not included.
And some small volumes, maybe around 100 to 200 tonnes annually in the European market. So for that small volume, it comes into effect from this year. What we are doing is we are doing all of the calculations which need to be submitted on an annual basis, so in FY February, FY 2027, and we are doing all the necessary calculations, working with our customers to understand what the impact would be and taking necessary actions. As of now, it’s a very small volume for us, so not a meaningful impact. But we are making all the preparations required for when larger part of our products get included and for wire rope, which also will, you know, probably get included in the coming two years.
Rupesh Tatiya
So what sort of changes do we have to do from 2028 and does it sort of reduce our competitive advantage in the sense that India has one of the lower steel prices? Does it give some advantage to European manufacturers? I mean, any, any color you can give around that. What, what, what exactly do we have to do to, to, you know, not, not how to give any levy for the cba.
Shreya Jhawar
Cba, yeah. So, so what we’re doing now is, you know, even though this is two years ahead, we’re starting to do the calculations, both direct and indirect emissions for the product to understand what actually could be the potential financial impact. Right. So even though we’re statutory, not required to do the submissions, we are still doing the calculation, so we get an estimate of what that impact would look like. Now what we have to do is look at, okay, how do we minimize this impact going forward? Right. So that might mean that, you know, we look at dedicated lines within the plant which are more already green manufacturing that can help us reduce this emission.
We’ve already taken up a project to set up a 4 megawatt solar power plant in the Ranchi plant so that can be more dedicated to these lines for which we supply to the European market. So these are some of the initiatives. Once we have a decent understanding of the impact, we will use these initiatives to see how we can overall minimize it so that the overall financial impact and burden on us is reduced to the maximum extent possible.
Rupesh Tatiya
So it is a solvable problem. Is that the right takeaway from this?
Shreya Jhawar
Yes, definitely. And ultimately CBAM is not just applicable to us. It will be applicable to everyone else as well. Right. So you know, to that extent, you know, it is not a significant competitive disadvantage to us. But we still want to take all the necessary actions in place to make sure we are prepared. And this is a journey we started a few years ago already with trying to see what all we can do in the plant to minimize our emissions. So that is a journey that will continue. And now we’ve put the accelerator on it as well.
Rupesh Tatiya
The second question, sir, is Ranchi Capex. I mean where are we on the ramp up? I don’t remember now how much capacity was there? What is the capacity utilization? How will you see FY27 playing out? How will the value mix move some color around Ranchi Capex ramp up?
Abhijit Paul
So we took a capacity addition of 40,000 tons in ropes at our Ranchi facility. So that includes 20,000. Sorry, 20,000. 19,000 tons of rope and 21,000 tons of wire. So our rope capacity at Ranchi has and rushia was around 72,000 tons before this additions. And with this 19,000 tons addition it will be around 91,000 tons. And our capacity utilization in Ranchi facility is around 75% at the moment after this addition. So that is related to the rope capacity on the wire front in Ranchi. Our capacity after this addition of 20,000 will be roughly 75,000 tons where we’ll be having around 78 capacity utilization.
Rupesh Tatiya
So this 75% capacity is the consolidated capacity utilization.
Rajeev Jhamwar
This is for. This is for Rachi. You asked for the Ranchi plant. So what about the Ranchi plant?
Rupesh Tatiya
Okay. Okay. And final question, Rajiv ji, is. I mean we are now net cash positive. What an amazing journey. I think most of the issues are sorted. So are there any, you know, large virgin markets or large virgin product categories that we are working on? And you Know, that can take us from I don’t know, 2500 crore revenue in wire homes to let’s say 4000 crore revenue in two, three years. Any, any. What is the strategic roadmap looking like? How are we seeding the new segments? Any color around that would be very helpful.
Shreya Jhawar
Yeah, definitely. I mean now that we as you mentioned have a net cash position of about 200 crores and that is continuously growing. So we’re constantly thinking about how, you know, we will continue to invest and the priority would be to continue to reinvest in the business, you know. And as we mentioned, we want to do all of the capex from our internal accruals as well. In terms of demand, we do see demand across some product categories where capacity is still a constraint today. So we are continuing to deploy targeted capex in those areas primarily around, you know, brownfield projects or debauch bottlenecking projects where we feel that returns will be attractive.
And the capex of this would be say around 250 to 300 crores. Around that level. At the same time we’re also looking at, you know, inorganic opportunities that will help us build markets through for the capacities that we have created. Though we are present virtually across all markets. But in certain areas, for example in Europe, our presence is primarily in certain regions, whether it be Netherlands in the England, Scotland area as well as in the Spain area. But there are so many other markets in Europe, be it Germany where we are seeing some growth and other markets in Europe as well where there is still an opportunity for growth.
So we will look at both inorganic and organic opportunities that will help us build those markets. And of course, you know, as part of our overall capital allocation plan as well, you know, we might also look at greenfield opportunities if that makes sense.
Rupesh Tatiya
And final. Just quick question. Parot Mala project. I think I saw Adani got a contract maybe, I don’t know, six months ago, three, four, six months ago. So when can we realistically expect first commercial order for the Paratmala project? And it will be what kind of range? It will be the size of the order.
Rajeev Jhamwar
Parvat Mala projects, you know, the rope. There are few contracts which have been issued. We expect these projects to wire. Rope procurement is at the last stage of the project. We are in touch with all the supply, all the people who have won the projects, be it in Prayagraj, be it the Adani and various and they are also in touch with us. But I think it will be not before next two to three years. We see the first kind of supplies happening to these projects because you know, these projects take minimum three to five years for them to come to to a level where they start buying the wire ropes.
So we are in the initial stages but I’m happy to say that few of them are in constant dialogue with us and we are working to supply all the details to them, work with them and hopefully let’s see if we can get few orders in the next couple of years.
Rupesh Tatiya
Thank you. Thank you for asking all my questions all the way.
operator
Thank you. We take the next question from the line of Prolin Nandu from Edelweiss Public Alternatives. Please go ahead.
Prolin Nandu
Yeah, hi, thank you so much for taking my question. I just wanted to understand some of the color that you have already mentioned on the volume growth and the kind of initiatives that we are taking. Are these initiatives something that will show. Result as early as Q4 or do you think this will take a slightly longer time? And the broader question that I’m looking for is that if I look at, you know, your previous, you know, outlook. Our company should have a steady grow. In terms of growth of top line at least in, you know, 12 to 15% is what you had, you know, alluded to. Right. So should we return back to that run rate at least in FY27 onwards. Or do you think that that is. Going to be a challenging thing for us?
Shreya Jhawar
So, you know, on the volume side, you know, we should see a gradual ramp up from Q4 and then in the next financial year it should definitely be better based on, you know, some of the inquiries as well as order pipeline that we were mentioning. If you look at the past three year CAGR of the wire and rope business on a volume standpoint, we will see that it has been around the 11 to 12% range. Where the degrowth has happened is on the LRPC side which kind of mutes the overall volume even on a nine month basis.
If we look overall volume growth was 5% but wire and both combined is at 8% level. That being said, we know that there is still improvement. Capacity globally is at about 145,000 tonnes now and we’re at say 74, 75% utilization overall. So there is still a lot of room for growth. We have the capacities and with all of the initiatives we should see by Q4, slow pick up. And then overall for the pickup in FY27 as well on the revenue standpoint as well on the wire and rope side, based on, you know, the forecast for this year, if you look at the 3 year CAGR from FY24 to 26 on the wire and rope side given it’s about 10 to 11% roughly around what we had guided again on the LRPC side where you know the market has, you know it’s become a more commodity market.
So that is something where we see the growth which is again brings down the overall number going forward. Again on a revenue standpoint in the next year we do expect double digit early double digit growth for sure.
Prolin Nandu
Okay, that’s very helpful. Shi. Where I was coming from is that if I look at your operating EBITDA number right we are at that 600 crores run rate. We were at 600 crores in FY20. In FY25 also we were at 600 crores. Maybe this year also best we will do is end up at that number. Right. So three years of flattish ebitda. My question is that is there any. Risk that you see to percentage EBITDA margin per ton EBITDA margin next year that could still keep the EBITDA growth lower than the top line volume growth that you just alluded to?
Shreya Jhawar
Yeah, I mean no, on an overall EBITDA level if you see last year we were operating ebitda of about 597. This year in the nine months itself we are at 494. So definitely by and last two quarters we’ve had about you know, 175, 176 crores overall. So you know, at minimum we should, you know see not a 600 crore level for sure. Definitely more in the 680, 700 crore range is what we see for the year. So from a 600 crore base of the last few years to 680700 crores is definitely a growth on an EBITDA standpoint.
But yeah, on the revenue standpoint we definitely have more work to do. Agreement on that and with all of the initiatives that we mentioned we should see that coming as well while maintaining our margins at the 19 to 20% level.
Prolin Nandu
That’s great Shreya ji. Thanks a lot and all the very best.
operator
Thank you. We take the next question from the line of Kartikya Kumar Pandey from 361 Capital. Please go ahead.
Kartikeya Kumar Pandey
Yeah. Hi. Am I audible?
Rajeev Jhamwar
Yes, yes you are. Thank you.
Kartikeya Kumar Pandey
Yeah, yeah, thank you for the opportunity. So I just wanted to understand few things with most of the capex over like what is your vision for the next two to three years? If I just, you know, you can give me some light on that like how much capex are you Going to do sub numbers.
Rajeev Jhamwar
On the capex. You see we are as mentioned earlier that we have a few areas where we see growth and demand coming up both in the domestic and export market particularly on the value added products like elevator like crane ropes, port cranes and some for the oil offshore and even on the ocean fiber business. So. All we should be able to, I think the capex should be between 250 to 300 crores a year if we have to maintain 10 to 12 to 15% volume growth. So you know to have these capex in the next two to three years we expect between 250 to 300 crores including maintenance capex every year.
Kartikeya Kumar Pandey
So what will be your maintenance capex number? If you could just give it the.
Rajeev Jhamwar
Maintenance capex number would be around 50 crores a year.
Kartikeya Kumar Pandey
Okay. And sir, if I just want to understand what is the kind of mix between the three segments like your, you know, when you think of your business like two to three years down the line. So what, what is the segment, the ratio that you think like should be the optimal for your business?
Shreya Jhawar
Yeah, on you know definitely going forward like we mentioned LRPC because it’s become a commodity market that will become a low, much lower percentage in terms of you know, volume and the growth is going to come from wire ropes and wires. If we see ropes right now is around 73% of our top line that would be keep growing in the next three years, around 75, 76% at the least. And buyers would also keep growing as we’re going into more high value buyers as well as you know, overall increasing our buyer volumes by you know, more export volume as well other than the domestic which we’ve been doing on the LRPC side, you know, while we will not see that volume growth because of the black LRPC which is a commodity market on the plasticated LRPC side as we mentioned as the approvals come in and our volumes start to go up as the projects get executed.
I think that is an area of focus. Right now we have a capacity of about 6,000 tonnes per annum and we will look to further expand that as well as the approvals for our various customers come in.
Kartikeya Kumar Pandey
So basically wire and wire rope segment is expected to grow at around 10 to 11% is what you’re saying, right?
Rajeev Jhamwar
The wire segment, the rope segment should grow with all the capex in place and the various initiatives which we have taken to develop newer geographies and newer products should grow by about 10 to 12% and the wire segment as we have seen growing by about 20% this year. This momentum should continue with more and more of the value added wire products which we are trying to develop both for the domestic and export market. So these will be the key drivers and together an average would be close to around 12 to 15% of volume growth in the wire and rope segment combined.
Kartikeya Kumar Pandey
Okay, understood sir. And sir, since like in this quarter we are seeing some, you know, good amount of price hikes in steel and as well as a price increase in zinc as in commodity. So like what could be any impact in the coming quarter that you can highlight on, you know, margins?
Rajeev Jhamwar
I think the wire and the LRPC is generally pass through in nature. So any steel price increase or decrease is always passed on to the customers or you know, so we don’t see any. And we have already started seeing the price increase as the steel price on these products. On the wire rope front, I think we as always seen in the previous last few years also that because of our overall mix and price management we are able to ensure our protection of margins. So even if the steel price increase we are hopeful of remaining between the 19, 20% margins what we have indicated earlier.
Kartikeya Kumar Pandey
Right sir. And it won’t have that much effect on volume if I, if I get a sense on.
Rajeev Jhamwar
No, it doesn’t impact the volumes.
Kartikeya Kumar Pandey
Okay. Okay, thank you.
operator
Thank you. We take the next question from the line of secret deep ATIL from Eyesight Fin Trade Private Limited. Please go ahead.
Sucrit Patil
Good morning to the team. I have two questions. My first question is as you have outlined your roadmap in the commentary so far this want to understand the key trade offs management is currently navigating across Usha Martin’s core wire, rope and cable programs. For example, between capacity allocation, delivery type timelines and margin optimization. What internal thresholds or early demand signals would prompt you to recalibrate your current plan of action if the conditions shift?
Shreya Jhawar
Of course, you know, it’s a constant balance between value added segment and also, you know, volume growth. Right. So that is a constant balance that we have to strike. And as we mentioned for the value added groups we have a more advanced, advanced order book because the delivery timelines, et cetera for those are a little bit longer and the requirements also more customized. But in, you know, in situations where we, in months where we don’t see for example a lot of traction on the value added segment, we would recalibrate our approach, focus more on the GP rope side because ultimately we have to get, we want to get to the overall volume level and ensure Efficient utilization of all of our assets.
Right. So we are constantly balancing between, between the two and on a month, on one month basically basis, depending on the demand pipeline. We, we take that, we take that call.
Sucrit Patil
Thank you. My second question is to Mr. Paul. You know, again, the forward looking one. From a monitoring stand, standpoint, how are the early operational or financial indicators you track internally that would signal either upside down or some pressure on the margin in the cash, in the cash cash flow before they show up on the reported numbers? Just want to understand your view on This, on, on the tracking part of the thing. .
Abhijit Paul
So overall we track the net working capital numbers. That is one key numbers for us that we track on a monthly basis. Basically inventory management and receivables management. These are the two areas where we are continuously focusing on and that is, that is yielding our good improvement in the cash flows. So on the cash flow side, these are the two areas we constantly monitor to ensure that cash conversion is positive.
Sucrit Patil
Thank you. Ambassador. Yeah, please, please, sorry, sorry, go ahead.
Shreya Jhawar
Just to add to that, you know, few KPIs that overall we track, you know, as a, as a group is of course around our volume growth, around our top line growth. Third is around our conversion of EBITDA to operating cash flow. We want to maintain that between above 95% at all times. And right now we’re at 114% for the nine months. And the fourth KPI that we have as an organization is our ROCE, which is right now 20%. And our long term goal for that is 25%.
Sucrit Patil
Thank you and best of luck for the next quarter.
Shreya Jhawar
Thank you.
operator
Thank you. We take the next question from the line of Anil Yadav from Axe Capital. Please go ahead.
Anil Yadav
Am I audible?
Shreya Jhawar
Yes.
Anil Yadav
Okay. So good morning and congratulations. The set of numbers. So my first question is, if we look at our overall virus sales volume in tonnage terms, could you please help us understand what proportion is currently coming from value added or specialty wire ropes? Additionally, how does the segment compare in realization versus standard wire rope products?
Abhijit Paul
So for the within wire rope segment, so wire rope is 73% of a total turnover. And within wire rope, 70% is well value added. And if you see the difference in margin, it is around 1 lakh. Is that is the difference in margin between a general group and studied rope on an average.
Anil Yadav
Okay. Within the total virule production mix, could you share the approximate tonnage attributable specifically to elevator ropes? And if possible, what would be the average relation per ton for this category compared to the realization.
Rajeev Jhamwar
We generally don’t go the sector wise volume we what we really share is the between the GP rope and the value added as one as two separate segments within that we don’t individually discuss.
Shreya Jhawar
On the volume side on the top line side elevators about 10, 9 to 10% of the overall top line. You know on the volume side that we don’t split it up by end segment we don’t share.
Anil Yadav
Okay, okay, understood. And my last question is out of total wire ropes volume how much tonnage would be logged cold wire ropes that is ncwr. Further, could you provide some perspective on how much of that LCW volume is currently tied to infrastructure programs such as Parvatmal or similar opioid projects?
Rajeev Jhamwar
As mentioned to you for the previous question, don’t get into individual segment wise reporting for individual sectors like this and we always look into between the specialized and non specialized and that is how we our reporting is done and that is how we would continue to individual sector wise. We do not have those numbers disclosed.
Anil Yadav
Okay, thank you so much. Thank you for taking my question and time.
Shreya Jhawar
Thank you.
operator
Ladies and gentlemen, we take the last question from the line of Rajesh Agarwal from Manior. Please go ahead.
Rajesh Agarwal
My question on any further scope of working capital improvement.
Rajeev Jhamwar
Of course working capital is like our CFO mentioned in last one year we have reduced by almost 97 crores by tightening common with every. All our business entities as a part of one Usha Martin are on a common digital platform and that is helping us to track our receivables very and the inventory and the quality of inventory. So this is an ongoing, ongoing exercise and that is we hope that this should continue to get better in the. In the coming quarters.
Rajesh Agarwal
Also can you quantify a number of days now in this presentation it was 199 days. So can it come down to 175, 180 days.
Abhijit Paul
So we are always trying to do that. So okay, reduce so now it is one and our target is to reduce it to at least 180 days.
Rajesh Agarwal
And and so second question the validation will improve going further. So is there a scope of margin improvement also.
Rajeev Jhamwar
As we mentioned earlier also that our margin which was which had come down to about 16 17% or 16, 16.5% we would be in last two quarters we are at about 19 around 19%. So on the product mix improvement we would be between 19 to. That is our target and beyond that I feel that if you try to keep on increasing that you start losing your volumes and market share. So we would like to keep for two and try to maintain increased volume with the EBITDA between 19 to 20%.
Rajesh Agarwal
This is the last question on the labor code. One time provision has been done. So every quarter the employee cost will increase from here or it will remain the same.
Abhijit Paul
No, no, that will. So one time cost is. Has effect of the retrospective effect. So it is much higher. So there will be some increase in. The gratuity expenditures going forward. But that. That will be less than a crore in a year.
Rajesh Agarwal
Okay. On a year it won’t be much?
Abhijit Paul
It won’t be much.
Rajesh Agarwal
Okay. Thank you sir. I’m through.
operator
Thank you. Thank you ladies and gentlemen. With that we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Rajeev Jhamwar
I would like to thank everyone for attending this call and showing interest in Usha Martin Ltd. I hope we have been able to answer all your questions. The company is dedicated to creating value for its stakeholders in a sustainable manner. Should you need any further clarification or would you like to know more about the company? Please feel free to reach out to us or to CDR India. Thank you once again for taking the time to join us on this call and see you in the next quarter. Thank you.
operator
Thank you on behalf of Usha Martin limited. That concludes this conference call. Thank you for joining us and you may now disconnect your lines.