Usha Martin Ltd (NSE: USHAMART) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Rajeev Jhawar — Managing Director
Abhijit Paul — Chief Financial Officer
Analysts:
Unidentified Participant
Devarshi Singh — Analyst
Aman Kumar Sonthalia — Analyst
Presentation:
operator
Sa it Sam It It Sa Sam. Ladies and gentlemen, good day and welcome to earnings conference call of Oosha Martin limited. As a reminder, all participant lines will be 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 this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devarishi Singh from CDR India. Thank you. And over to you sir.
Devarshi Singh — Analyst
Thank you. Good morning everyone and thank you for joining us on Usha Martin’s Q1 FY26 earnings conference call. We have with us Mr. Rajiv Jhawar, 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 hope all of you have had the opportunity to refer to the earnings documents that we shared with you earlier. We will initiate the call with opening remarks from the management following which we will have the forum open for a Q and A session. Before we begin, I would like to point out that some statements made in today’s call may be forward looking in nature and a disclaimer to this effect has been included in the earnings presentation.
I would now like to invite Mr. Rajiv Jhawar to make his opening remarks. Thank you. And over to you sir.
Rajeev Jhawar — Managing Director
Thank you. Good morning everyone. On behalf of the management team of Usha Martin, I would like to welcome you all to our earnings conference call. I will begin by sharing some updates on the operations and strategy following which our CFO Mr. Abhijit Paul will run you through the key financial highlights. We are pleased to report a stable start to FY26 with the consolidated revenues of rupees 887 crore driven by a year on year growth volume growth of 10.4% across our key segments. The wire segment registered a strong 32.3 year on year revenue growth while the wire rope division continued to perform steadily with a 7.9% increase in revenues supported by encouraging contributions from the crane and elevator rope segments.
The LRPC segment continues to face certain headwinds and recorded a 3.4% year on year decline through the. Though strategic initiatives are underway to address these challenges. Operating EBITDA for the quarter stood at rupees 145 crore with a margin of 16.3% and an EBITDA per ton of 28,502 rupees per ton. Early grains from the one Usha Martin transformation supported profitability amid market specific and global uncertainties While the foundational phase of our initiative is largely complete, we expect more tangible benefits to emerge in H2FY26. As mentioned on our previous phone call, a key measure of success will be our ability to scale while keeping costs in check, thereby driving better operating leverage going forward.
Some of the key growth drivers for the business which will enable us to scale are one. The new CapEx at our Ranchi plant is now operating at a much more stable level with 70% commissioning complete and stabilized as of Q1. We are meticulously planning both factory and on ground sales efforts to strengthen our product mix for this capacity. Progress is being closely monitored on a daily basis to ensure we capture high value opportunities which will drive EBITDA margin improvement. 2. With the CapEx on stream, we have also successfully increased direct shipments of high value segments from India to the Europe customers which demonstrates acceptance of our products in these quality conscious markets. It’s encouraging to see that we have already started to get repeat orders reinforcing our confidence in this model as a sustainable growth driver. 3. Even with some uncertainty in the US market due to tariffs, we are confident of our position in the US market. Our focus has been on retaining and even growing our market share. We have secured a sizable tender that provides strong order visibility for the rest of the year alongside our regular business in the US. 4. Our synthetic sling solution Ocean Fiber has gained faster than expected traction with strong brand acceptance in a short period of time. The inquiry pipeline is robust across offshore, subsea and heavy lifting applications and our sales teams are actively working with potential customers to move these inquiries towards orders. Early trials and feedback have been extended positive and we are already seeing promising signs that Ocean Fiber will become a meaningful contributor to our high value product portfolio in the due course. While these growth drivers strengthen our top line, we are equally focused on disciplined cost management to enhance margins.
As a group, we are examining every cost line with the aim of improving efficiency and profitability. Some initiatives are already delivering results while others will yield benefits in the coming quarters. For example, employee costs have reduced from an average of 118.6 crore per quarter in FY25 to 113.2 crore in quarter 1 FY26 with further savings expected as we expand our shared services back office in India. Another example is on our finance cost. We have repaid the entire US$3.4 million loan in Singapore and plan to fully repay 2 million euro loan in Netherlands with the impact of these transactions.
With these actions expected to reflect from quarter two onwards. All of these initiatives have led to strengthened balance sheet. Inventory levels have come down meaningfully from FY25 peak driving strong cash conversion. Operating cash flow stood at 95% of operating EBITDA in Q1 FY26. Our balance sheet has also strengthened with the net debt free position at both standalone and consolidated levels giving us greater flexibility to fund future growth without leverage constraints. Looking ahead while Q1 FY26 reflects a steady operational performance, a stronger growth trajectory is expected in the second half as the benefits of transformation initiatives and capacity expansion gather pace.
Better demand visibility supported by improved competitiveness across global markets positions the company to pursue market share gains even amid prevailing macro geopolitical uncertainties. This approach is expected to strengthen leadership in core segments and deliver sustainable value for all our stakeholders. With this, I would like to now invite our CFO Mr. Abhijit Paul to present the financial highlights for the quarter. Thank you and over to you Abhijit.
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 ended 30 June 25. In Q1 of FY26, our consolidated net revenue from operations stood at Rupees 887 crore reflecting a year on year growth of 7.4% over Rupees 826 crore in Q1 of FY25. This revenue growth was led by strong performance of our segment which grew by 32.3% year on year. The core warehouse segment which continued to be the largest contributor with 72% share of the total revenue, registered stable performance with 7.9% growth on a year on year basis and is expected to gain momentum from H2 of FY26 supported by recovery in demand and the ongoing One Usha Martin initiatives.
Operating EBITDA for the quarter stood at Rs 145 crore as against rupees 154 crore in the same period last year. While margins were impacted by market led pressures, our continued focus on operational efficiencies is expected to aid recovery in the coming quarters. Net profit for Q1FY26 stood at Rupees 101 crore compared to Rs. 104 crores in Q1 of FY25. On the balance sheet front, I am pleased to report a significant strengthening in our financial position as of 30th June 2025. We have achieved a consolidated net cash position of Rupees 14 crore compared to a net debt of Rupees 63 crore on March 25th.
Our disciplined capital allocation approach ensures that both ongoing and planned growth initiatives remain well funded. From a cash flow standpoint, we recorded a healthy improvement. Operating cash flow before tax for Q1. FY26 stood at rupees 137 crore translating to approximately 95% of operating EBITDA compared to 102 crore or 66% of EBITDA in Q1 of FY25. This improvement reflects our tighter operational controls and sharper working capital management. These strong cash flows supported by adequate working capital headroom provide a strong foundation for future investments and disciplined capital deployment. To conclude, we remain confident that strategic groundwork laid under one Shamartin initiative combined with disciplined financial approach positions the company well for the next phase of growth.
Steady traction across markets, a sharper focus on operational agility and a continued strength in the balance sheet cash flows.
operator
Can you hear us? Ladies and gentlemen, please stay connected while the region and the management. Back to the call. Participants, please stay connected while we rejoin the management. Back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected, sir. Go ahead.
Devarshi Singh — Analyst
Yes, please. So can we start with the question answer?
Questions and Answers:
operator
Sure. Thank you very much. Ladies and gentlemen, we now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press Star and one to ask the question. The first question is from line of Aman Kumar Sontalia from AK Securities. Please go ahead.
Aman Kumar Sonthalia
Yeah, Good morning sir. So my question is related to US market. Significant hike in the duty in the US market so how we will grow there and how we will maintain our business.
Rajeev Jhawar
Thank you for the question. So with regard to the US market for steel wire rope which fall under the section 232, the tariffs are 50% across the board. So the reciprocal tariff is separate and this 50% tariff for our particular product category is different and applies to all countries except UK which is at 25% for us. So far in terms of the impact of these tariffs we have not seen a major issue because for most of our high value products like elevator ropes, mining ropes which we sell in the US in most cases we have been able to pass on a large part of the tariff, the increase to our distributor for to our end customers.
And in some cases where we can’t do that, we have to take a judgment call of how to proceed. But our major focus has been that we don’t want to give up our market share in the US because we want to ensure that we don’t lose our customers in the US in the long term. And in fact with our inventory on the ground, because we have a warehouse in Houston with our inventory on the ground for our, we have been able to actually get a better realization for our products and actually gain share in some cases.
And one of the other positive developments has been that we recently won a tender in the US which is a sizable tender which gives us a good order visibility and a consistent order book for FY26. So all in all, while the environment still remains uncertain, we don’t know how things will evolve overall in terms of the tariff environment. Things change every day. But as of now we are feeling cautiously optimistic.
Aman Kumar Sonthalia
Next question related to European market. So I think there’s a huge geopolitical tensions going on. So how do we see our European business going forward?
Abhijit Paul
Our European business is. We are very positive on our European business. With our integration with India and our Dsuk facility, we have been able to now start getting better supply direct supplies from our Indian plant on the Dsuk brand to the European market. And the supplies are going well. Also getting repeat order. This is helping us to even be more competitive in that market. We are able to make faster delivery to our customers. And both on the wind energy, renewable energy as well as on the oil offshore and the train and elevator market, the demand is fairly strong and we expect to have a defense growth in the financial year in Europe.
Aman Kumar Sonthalia
Okay sir, I’ve seen a decrease in the manpower cost. But at the same time I’ve seen that there is an increase in the other expenses. So whether we can expect further come down in power cost and what is the reason for sudden spike in other expenses?
Rajeev Jhawar
That’s a good question. So if we look at our other expenses for this quarter, it was about 166 crores for the quarter. And if we compare.