Usha Martin Ltd

- Usha Martin Limited has completed a major Phase-1 capex program funded entirely through internal accruals. - Phase-2 capex, involving an investment of INR 167 crore at the Ranchi facility, is underway and is expected to be completed within the next 18-24 months. - Phase-2 will also be funded using internal accruals and healthy cash flows from operations. - The company currently has no plans to raise any debt or equity for funding these expansions. - Management emphasized maintaining a strong financial discipline with no intention of taking on new debt or raising funds externally. - If any acquisition opportunity arises, the company would consider all funding options depending on cash flow availability, but currently, there is nothing on the table.

- Phase-I capex at Ranchi facility focused on increasing capacities of high-value-added products completed; commercial operations began Q1 FY25. - Gradual ramp-up of production expected over next 9-12 months to enhance performance. - Phase-II capex planned at Ranchi facility with an investment of INR 167 crore, expected to complete within 18-24 months from FY24, funded by internal accruals. - Thailand plant expansion and UK subsidiary’s synthetic line expansion are underway, with Phase-II capex potentially exceeding INR 100-150 crore depending on opportunities. - No current acquisitions, but the company is open to exploring acquisition opportunities for capital deployment. - Expansion planned to enable 12%-15% volume growth year-on-year with gradual ramp-up over quarters. - Synthetic slings manufacturing plant setup in UK (BSUK facility) expected operational by Q2 FY25, targeting European and later American markets. - All capex and expansion funded through internal accruals; no plans to raise debt or equity.

- The company expects a 12%-15% volume growth annually over the next 2-3 years supported by recently completed and ongoing capex initiatives. - Phase-1 capex expansion adds approximately 40,000 tons capacity from Q1 FY25, with gradual ramp-up during the year. - Phase-2 capex, involving INR 167 crore investment over 18-24 months, will add an additional 10,000 tons capacity aimed at mining ropes primarily. - Sales growth will come from a combination of wire ropes, wires, LRPC, plasticated LRPC, with a focus on maximizing rope volumes. - Value-driven volume expansion strategy emphasizes higher-value-added products and export markets, with international sales expected to grow 10%-15% per annum. - US market sales currently around 7,000-8,000 tons, targeting 10%-15% growth; mining segment expected to grow from 2,500 tons to 4,000-5,000 tons in 2-3 years. - Order books, especially for European projects, provide visibility of 6-8 months, supporting volume increases and revenue stability.

- The company targets a 12%-15% volume growth in the next 2-3 years, driven by capacity expansions and new markets. - EBITDA margins are expected to be maintained around current levels of ~19.5%-20%, with gradual improvement as the product mix enriches towards higher value-added products. - Operating EBITDA grew 16.6% year-on-year in FY24, with a 290 basis point margin improvement; the company aims to sustain or improve this performance. - Profit after tax for FY24 rose 21% year-on-year to INR 424.1 crore. - Incremental revenue growth expected from ramping up the Phase-I capex (40,000 tons capacity) starting Q1 FY25, with Phase-II capex adding further capacity in next 18-24 months. - Gradual ramp-up in volumes and value-led volume growth expected from Q1 FY25 and onwards. - Expects to benefit from international market expansion, higher realizations in export markets, and improved cost efficiencies. - Strong cash flows and low debt position will support sustainable growth without requiring additional debt.

- Usha Martin generally maintains an order book of 1 to 2 months due to 85% of business being replacement market via distribution and dealers. - For large projects, especially in Europe (e.g., Brunton Shaw business), order books extend between 6 to 8 months. - The company reports a healthy order book supporting increased volumes expected for the current year. - Recent large contracts won by Brunton Shaw give order visibility for 7 to 8 months ahead, aiding advanced planning and wire supplies from India and Thailand. - Despite some logistical delays (e.g., Red Sea crisis), the outlook remains stable with good customer response and steady demand.