Usha Martin Q1 FY27: Profit-led growth, stronger cash flows, and a push into specialised ropes

Usha Martin started FY27 with a sharp step-up in profitability and cash generation. Consolidated revenue from operations rose 16.4% year-on-year to INR 1,033 crore in Q1 FY27, crossing the INR 1,000 crore quarterly milestone. Operating EBITDA increased 43.8% to INR 208 crore, and margins expanded to 20.1% from 16.3% a year ago. PAT rose 40.9% to INR 142 crore.

The quarter stood out because value growth outpaced volume growth. Management attributed this to a richer product and geographic mix, disciplined cost management, and pricing actions that helped pass through higher input and freight costs.

Segment mix stayed rope-heavy, but growth was broad-based

Wire rope remained the core business. In Q1 FY27, wire rope revenue was INR 757 crore, up 18.0% year-on-year. The wire segment rose 31.7% year-on-year to INR 124 crore, while LRPC increased 3.9% to INR 89 crore.

Volume trends were more muted. Consolidated sales volumes were reported at 51 thousand tonnes, largely flat year-on-year. Within that, wire rope volumes were about 26 thousand tonnes and were marginally lower, while the company cited strong domestic and western market momentum offset by weakness in the Middle East.

Management said Middle East rope volumes declined around 28% due to ongoing geopolitical conflict and related market disruption. They also cited Asia Pacific project-related delays as another factor. However, the company highlighted growth in India, the US and Europe, particularly in higher-value applications.

Financial snapshot (Consolidated)

Cost volatility was real, but the company protected margins

The presentation highlighted a rise in steel prices to INR 57,217 per tonne in Q1 FY27 (from INR 50,376 per tonne in Q4 FY26). Despite this, EBITDA per tonne improved to INR 40,581 in Q1 FY27, supported by mix and pricing.

In the concall, management clarified that the pass-through mechanism is based on absolute increases in steel and other input costs rather than percentage-based adjustments on finished product prices. For commodity products such as wires and LRPC, management stated the steel component is passed through fully.

Management also reiterated that quarterly margins can fluctuate with geographic and product mix, but the stated objective is to maintain EBITDA margins above 20%, with a typical range of 20% to 21%.

Cash flows, balance sheet, and capex priorities

Usha Martin’s cash conversion was a key highlight. Operating cash flow before tax stood at INR 242 crore in Q1 FY27, which management described as 116% of operating EBITDA. After capex of INR 73 crore, free cash flow was INR 135 crore.

The balance sheet continued to strengthen, with net cash reported at INR 465 crore as of 30 June 2026, up from INR 332 crore as of March 2026.

Management guided for FY27 capex of about INR 250 crore to INR 300 crore. A key project underway is an elevator rope capacity expansion of about 6,000 metric tons per annum, expected to be commissioned in phases beginning October 2026, and scheduled for completion by Q1 FY28. Management noted that elevator demand in India is growing around 20% and that capacity has been a constraint.

Separately, India Ratings upgraded the company’s long-term issuer rating to IND AA- with a stable outlook and reaffirmed IND A1+ for short-term credit facilities.

Newer verticals: plasticated LRPC, GALSTAR, and Oceanfibre

Management positioned plasticated LRPC as a differentiated offering versus commoditised black LRPC. The company cited its first international order for plasticated LRPC strand for a stay cable application and indicated that further approvals remain in progress. On volumes, management stated plasticated LRPC production was about 2,500 tons last year, with a FY27 target of 3,500 to 4,000 tons, and full utilisation of 6,000 ton capacity expected next year.

On aluminium-zinc coated wires under the GALSTAR brand, management said the business is progressing with domestic demand and European supplies, including applications such as rockfall protection that are driven by performance-based approvals.

Oceanfibre, the synthetic sling business housed within the company’s UK operations, was described as a specialised product line in oil and offshore and wind-energy heavy lifting applications. Management estimated a total addressable market of about 1.5 billion to 2 billion and stated gross margins of 65% to 70%. It also shared an ambition to scale revenues from roughly GBP 2 million to GBP 3 million currently to about GBP 10 million over the next few years.

Key investor takeaways

Q1 FY27 reinforced Usha Martin’s transition toward profit-led growth. Revenue crossed INR 1,000 crore for the first time in a quarter, while margins improved meaningfully despite higher steel, zinc and freight costs.

The more important signal was cash. With operating cash flow conversion above operating EBITDA and a net cash balance of INR 465 crore, the company enters its capex cycle from a position of financial strength.

Risks remain, especially from geopolitical disruption in the Middle East and evolving regulatory costs such as CBAM for Europe-linked exports. But management’s focus is clear: value-led volume growth in wire ropes, scaling differentiated verticals like plasticated LRPC and Oceanfibre, and deeper integration under the One Usha Martin initiative.