Usha Martin's Q2 FY26: Strong Margins and Strategic Momentum

Usha Martin Limited, a leading global and India's top specialty steel wire rope solutions provider, has reported a robust financial performance for the second quarter and first half of fiscal year 2026. Despite a challenging global environment, the company demonstrated strong operational execution and strategic clarity. For Q2 FY26, consolidated revenues stood at INR 908 crore, marking a healthy increase from the previous year. The company achieved its highest operating EBITDA since the sale of its steel business, reaching INR 173 crore, with impressive EBITDA margins of 19.1%. This performance underscores Usha Martin's resilience and effective management strategies.

The Wire Rope business, which remains the largest revenue contributor, delivered a stable 2.6% year-on-year growth. The Wires segment was a standout performer, registering a significant 14.2% year-on-year revenue increase, driven by sustained demand. Conversely, the LRPC division experienced a 26% year-on-year decline, primarily due to the extended monsoon season impacting infrastructure activity. For the first half of FY26, consolidated revenue from operations reached INR 1,795 crore, a 4.5% year-on-year growth. Operating EBITDA for H1 FY26 rose to INR 318 crore, and Profit After Tax (PAT) from continuing operations improved to INR 228 crore.

Strategic Initiatives and Operational Excellence

Usha Martin's strong performance is largely attributed to its 'One Usha Martin' transformation journey, an initiative that has fostered a unified vision across global teams and driven sharper execution and financial discipline. This program has already yielded tangible benefits, including a significant reduction in fixed costs by approximately 10% over the previous year, contributing to improved profitability. The company's focus on a favorable product mix, tilting towards high-performance and value-added ropes, also supported margin expansion in Q2 FY26.

Despite some short-term operational challenges, such as slight delays in commissioning new high-performance rope machines and softer domestic demand due to the monsoon, management remains confident in its strategic direction. The company is actively expanding its rope-making capacity, particularly in high-growth segments like elevator and crane ropes. Furthermore, Usha Martin plans to increase its capital expenditure to boost wire production, targeting 100,000 tons over the next 2-3 years. The successful approval and ramp-up of the Galfan/GALSTAR product line, expected to reach 5,000-6,000 tons annually from Q1 FY27, highlight the company's commitment to product innovation.

Robust Balance Sheet and Future Outlook

Usha Martin has significantly strengthened its financial position, demonstrating disciplined capital allocation. During the quarter, the company repaid INR 157 crore of debt entirely through internal accruals. This strategic move resulted in a net cash position of INR 111 crore by the end of Q2 FY26 and a healthy Return on Capital Employed (ROCE) of 20.3% from continuing operations. Operating cash flows before tax stood at INR 390 crore for H1 FY26, representing a robust 123% conversion of operating EBITDA to cash flow. The gross debt decreased from INR 338 crore in March '25 to INR 181 crore by September '25, leading to a meaningful reduction in finance costs.

Looking ahead, Usha Martin's management anticipates a stronger second half of FY26 as the impact of ongoing initiatives becomes more visible. The company aims to maintain an 18% margin in FY26 and targets 19-20% in FY27. Annual capex, including maintenance, is projected to be INR 300-350 crore, primarily for organic growth. The company is also focused on expanding its international market reach and distribution network, particularly in Europe and the Americas, where it has seen topline and bottom-line growth. With a strong balance sheet, diversified revenue streams, and a clear strategic roadmap, Usha Martin is well-positioned to deliver sustainable and profitable growth in the coming years.