Usha Martin Gdr 144A

Ladies and gentlemen, good day and welcome to earnest conference call of OSHA Martin Limited. As a reminder, all participant lines will be in the listen-only mode and there will be no optionality for you to ask questions after the presentation concludes.

Should you need assistance during this conference call, please signal in your finger by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. And now at the conference, Otam Sadegh Rishi Singh from TDR India Thank you and over to you, sir.

Thank you. Good morning, everyone. And thank you for joining us on Usha Martin Q1 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 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&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 Jhabar to make his opening remarks.

Thank you and over to you, sir.

Thank you. Good morning, everyone. On behalf of the management team of Dusha 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 Rs. 887 crore driven by the year-on-year volume growth of 10.4% across our key segments. The wire segment registers a strong 32.3 year-on-year revenue growth while the wire rope division continues 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. Though strategic initiatives are underway to address these challenges, Operating EBITDA for the quarter stood at Rs. 145 crore with a margin of 16.3% and an EBITDA per tonne of Rs. 28,502 per tonne. Early claims from the one pusha margin transformation supported profitability amid market statistics and global uncertainties. While the foundational phase of our initiative is largely complete, We expect more tangible benefits to emerge in H2FI26 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 1. 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 then 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 European 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. 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 extremely 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 cross-line with the aim of improving efficiency and profitability. Some initiatives are already delivering results, while others we see benefits in the coming quarters. For example, employee cost has reduced from an average of Rs. 118.6 crore per quarter in FY25 to Rs. 113.2 crore in Q1 FY26. With further savings expected as we expand our shared services back office in India. Another example is on our finance costs. We have repaid the entire US dollar 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 2 onwards. All of these initiatives have led to strengthened balance sheet, inventory levels have come down unequally 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 both 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. 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 30th June 25. In Q1 of FY26, our consolidated net revenue from operations stood at Rs. 887 crore, reflecting a year-on-year growth of 7.4% over Rs. 826 crore in Q1 of FY25. This revenue growth was led by strong performance of our wire segment, which grew by 32.3% year-on-year. The core wire group segment, which continues 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 H2O526, supported by recovery in demand and the ongoing One Usamati initiative. Operating EBITDA for the quarter stood at Rs. 145 crore as against Rs. 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 quarter. Net profit for Q1 FY26 stood at Rs. 101 crore compared to Rs. 104 crore 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 Rs. 14 crores compared to a net date of Rs. 63 crores on March 25. 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 A5-26 2.137 crores translating to approximately 95% of operating EBITDA compared to 102 crores or 66% of EBITDA in Q1 of 2025. 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 investment and disciplined capital deployment. To conclude, we remain confident that strategic groundwork laid under one Usama Team initiative combined with disciplined financial approach positions the company well for the next phase of growth. Steady taxation across markets, a sharper focus on operational agility and a continued strength in the balance sheet cash flows. Yes, please. So, can we start with the question answer?

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 1 on their touchtone 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 questions are assembled.

Participants, you may press star and 1 to ask a question. The first question is from line of Aman Kumar Sontagia from AK Securities. Please go ahead. Yeah, good morning sir.

Sir, my question is related to US market. There is a significant hike in the duty in the US market. So, how we will grow there and how we will maintain our different sales?

Thank you for the question. So, with regard to this US market for steam wire rope, which fall under the section 232, the tariffs are 60% 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 tariffs, the increase to our distributors, 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 GP rope, we have been able to actually get a better realization for our product 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 Paris environment, things change every day. But as of now, we are feeling cautiously optimistic.

Okay, next question related to European market. So, I think there is a huge geopolitical tension going on.

So, how do we see our European business going forward?

Our European business is we are very positive on our European business with our integration with India and our BS UK facility we have been able to now start the getting better supply, direct supplies from our Indian plant on the GSUK 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 crane and elevator market, the the demand is fairly strong and we expect to have a decent growth in this financial year in Europe.

Sir, I have seen a decrease in the manpower cost but at the same time I have seen that there is a increase in the other expenses. So, better we can expect further come down in manpower cost and what is the reason for sudden spike in other expenses?

That's a good question. So, if you look at our other expenses, for this quarter, it was about 166 crores for the quarter. And if we compare it to the quarterly average for FY25, it was about 163 crores. So, that is, as we said, there is a slight increase, there is a 3 crore increase. But if you look at, break that down further, the other expenses can be seen as the fixed as well as the variable expenses. So, the fixed expenses have actually decreased from the 37 crore level to about 34 crores to all of the initiatives that we have been talking about under 1 Isha market. What has increased is the variable expenses which has increased from about 126 crores to 132 crores. The last part of that increase is the freight component of 6 crores largely for Europe orders which is actually recovered from end customers. So, and the second part you mentioned, which was the employee expenses. The employee expenses have decreased actually from 125 crores in Q1, but that was slightly higher level on average is CC of FY25, which was 118 crores per quarter, which has decreased to 113 crores this quarter, which is on an annualized basis of 20 crores per quarter. decrease, which we do expect will further reduce with all of the initiatives and the back office that we are setting up in India. So, as more of these Manushya Martin initiatives materialize, we will see expenses across the board come down, but the most important part is we have to do that without compromising on our growth, which we are confident of, and that is what will give us better operating benefits.

Madam, as you have said in the main remark that we are seeing a very good traction in the synthetic film business. So, can you throw some light on that?

Yeah, so as we mentioned in the opening remarks, the Ocean Cyber brand, which is a synthetic film brand, that has picked up really well. We are getting repeat orders from our customers for that product in Latin America. even in Europe. And we thought that it would take a while to build track record and go into this heavy lift synthetic slings market. But it's been great to see that we have already got success there and we'll be supplying heavy lift slings for the critical offshore wind market, which is a high value, high margin product. And we've already secured the order and we will be supplying it in the upcoming quarters. While it's still early days and we don't want to put a number to it, we definitely think that in 18 to 24 months, it will become a meaningful, sizable, independent vertical for our next level of growth that we are starting.

Okay. Thanks. Yeah, yeah. That's all from my side. Thank you, sir. Next question is from Manav Preetam Roy from BNK Securities. Please go ahead.

Hi sir, thanks for the opportunity and congratulations on your second number. I have just two questions. First of all is that last quarter there is a one-off. So, is there any one-off is there in this quarter as well?

That is your question.

Yeah, no, like this quarter we don't have any, normally... Hello. Hello. No, there are no major expenses, one-off expenses in this quarter. Okay, sir.

And where is the expense of the H2 100 billion cost optimization strategy that we have?

It should reflect from quarter 3 onwards, quarter 2, but we should be able to advance from quarter 3 onwards.

Okay, so thank you and one last question if I may ask.

Yes sir. Like you said that the UX studies will in fact is not that much as we can really pass to the studies to the end customer. But in some cases that you have mentioned that we can't really have to take some other steps.

So, is it really if you can quantify any number that that much heat you can expect from that UX studies 3 and all? I think we are pretty optimistic and we should be able to not only retain our market share and ensure our margin protection and also we should be able to in some cases increase our market share but with the way it is that the tariffs keeps on changing fairly frequently we are a bit cautiously optimistic and we hope that it is, based on what is being maintained, is maintained going forward, we should be able to, we should be able to maintain our margins and volumes in the U.S.

market. Okay, so thank you. Thank you for your answer, sir.

Thank you. Thank you very much. Next question is from Lance Roland Nandu from Edelweiss. Please go ahead.

uh yeah hi team thank you for giving me the opportunity uh i'll continue with the last participant's question uh on tariff right uh now uh see 50 is a very large number and despite that you are confident of you maintaining the market share as well as the margin can you help us understand how will you be able to do this uh i understand that see domestic producers do not have the capacity enough to supply in the market But with 50% differential, maybe they can also put up the capacity. And the larger question is that, you know, let's say, for example, you've been aware about this Paris thing before you thought about this restructuring right from UK to India. Would your decision change and can you still, you know, can you keep some capacity operational at the UK plant so that between India and UK, right, you can take advantage of some of the tariff differential, right, when it comes to some markets like US. So, this is the, this is the first question that I have.

Yeah. So, you know, it is the same for others as well. You know, we compete with The Koreans, we can speak with other people in the India market. For everyone, it is 50% as opposed to the local tariffs where it's different tariffs for different countries. So, in that way, it's a level playing field. Secondly, when it comes to the U.S. market, the domestic market versus the export market, That is looked at very differently because the domestic prices, even with the 50% tariff and a lot of the major categories will still be at higher levels. They do command a premium. So, in that way, we are still overall competitive. Thirdly, in your point around will the domestic producers set up any capacity, with the environment being so dynamic right now and you know uncertainty for them as well in the market as you know there are things happening on a daily basis. Based on our initial analysis they are also not feeling like it makes sense to put in more capacity because if things change in a couple of years then they would be stuck with that additional capacity and there might be an oversupply at that point. So, while they don't have production capacity right now to meet the demand and port will always be a factor, we don't see any major capex plans for the major producers over there. And then to the last point, For the BSUK part, we still have our machines in BSUK. We reduced our manpower and we reduced our production over there. But we do have the flexibility where if we feel that this environment continues or changes, and in some cases, the unit economics makes sense for us to produce in BSUK for the US market, we have the flexibility to do that.

That's very encouraging to hear. Thank you, Shri Adi. My second question would be on the domestic market, right? Can you just help us understand what is the competitive environment here? Because there are some other players who also have probably, you know, got approvals in some of the mining tenders, so on and so forth, right? And some of the domestic players are also putting up capacity for high value add wires. So, versus let's say a few years back, has there was competitive position in the domestic market taken a hit or how should one think about competition in the domestic market?

Good question. Domestic market in the wire rope segment, Usha Martin has between 65 to 70% of the market share and we have a very strong data network, a very strong technical team which supports the services to our customers and along with our dealer network and we have been able to continuously maintain and in some cases are focusing to even increase our market share. The prices in the domestic market have also improved slightly more on account of the improved product mix and we are expecting to continue to maintain our market share and we still enjoy a very strong market support from our dealers and our customers. The competition in all the various segments will always be there. We have to see that how we continuously improve and enhance our product, improve with our global design center and our R&D center in India to work closely with our customers to continuously upgrade the product to be able to improve the technical performance and the performance of our groups. And that is really helping us to ensure that we keep our market share. On the wire side of the business, we have seen a 32% growth year on year on the wire side. And we are more focused to increase the production of the high value added wire, which is going to be helping us to improve the overall sales of our wires, but more focused on the value added products. And we are not getting into the commercial wires which have a large volume but low margins. So that is the kind of product which we are not into.

So it's a niche market which we are focusing and we expect to continuously grow that market.

Thank you, Rajivji. I'll join back in the queue for more questions.

Thank you. Next question is from Manoj S. Deepwalia. Hello, can you hear me?

Yes. Sir, thanks for taking my question. So, with respect to products that you supply to U.S., are these being supplied by your India facility or the U.K. facility? And let's say if the tariffs were to remain at current levels, would it be possible for you to shift the entire production for your U.S. market to U.K. plants?

Most of the supplies are taking place from India and our island plant. And we will continue to do so. As Shreya mentioned earlier, that if there is an opportunity for us to be able to supply from UK, definitely 10-15% of this quantity can be even supplied through our UK plant. But we don't see that situation happening in the near future. Going forward, we have that flexibility and we have kept the flexibility in the government power and we should be in a position to do that should the situation arise.

Got it, sir. And with respect to the flexibility that you mentioned, is it that the UK plant will require some manufacturing investments or modifications to be able to create the US volumes or the plant is ready and whenever you feel the time is right, the production could be comfortably moved to UK plant?

No, we don't need any more fixed asset investment there. Our plant and machinery is in good shape. And we have retained all the equipment in the UK, not moved anything out of the plant. And if the need be, we can quickly start production from that point of view.

Sir, I am just curious, given the fact that there is a large duty differential between UK and other manufacturing locations to the extent of almost 25%, why aren't you already shifting the US volumes to UK plants? Because it will add a significant amount of margin to your US sales risk.

Anything which goes from the UK plant, the wires and strands have to go first from India or Thailand to the UK plant. The UK cost of manufacturing is also not skipped with the cost of labor. So, and then the logistics also, first going to UK, then getting it converted, and then going back from there to the US with the second leg of logistics, it's when you look at everything, it's still more competitive to supply from India and the Thailand plant.

And in many cases, in most cases, the distributors and customers are taking on a large part of the pregnancy. So, that is something that is also helping us, you know, rethink our care.

Thank you. That's all from us.

Thank you. Next question is from line of Rajesh Agarwal from Money or Capital. Please go ahead.

We have an attraction in which elevator or local domestic investment segment are we seeing attraction because I read an article if the elevator segment is going by double digit. This is my first question.

The elevator is definitely going fairly fast in the domestic market. And with the construction in the tier 2, tier 3 cities also of multi-storied buildings, we see that a lot of demand is coming up. Elevator is one segment which is at the strong growth. In addition to the crane market, which is again related to construction, piling, mobile crane, even port. So, these are the two segments which are growing fairly strongly in India. Okay.

And the second question, is there a possibility of working capital reducing further and what do we do to increase the margin which we have added to 18% and how the margins will come and how the working capital will improve?

Yeah. So, definitely the working capital will reduce going forward. In September last year, it was at 209 days at its peak and now it's come down to 196 days as of this last quarter. We are confident that this positive trajectory will continue. The second part is the EBITDA margin growth. Yeah, we definitely expected to grow from the current 18.3% to 18% for the full year. and we are quite confident of that both in the domestic and international market. Of course, in terms of the domestic market, we do expect better product mix and realizations going forward And we have seen already early signs of that from our order pipeline with our dealer network. So overall from Q2, there we expect the margins to go up. And then when it comes to the international business, one of the reasons the margin was also subdued was because in the Middle East, in the past quarter, we did see certain pricing pressures with GDP rope. But even there, our focus is more on the high-value products now in elevator styling, like we were talking about, even in the Middle East markets. So, with that, it might take a little bit more time, but in H2, we do expect the recovery to come. And then, of course, with the European business initiative, which we already talked about, that would also lead to further EBITDA market improvement. So, all of this gives us the confidence that H2 should be at much better level.

This includes any mitigation in sale price also?

Can you come again, please? Is this mitigates any increase in steel prices also? No, the steel prices have been fairly stable. Okay. In fact, we saw last two months slight reduction in prices. And with the feedback what we had, we don't see a major increase coming up on steel. So, it's more or less stable, I would say. Okay.

And the final question, what will be the maintenance capex and capex this year? Maintenance capex would be close to 25 to 30 crores. Okay. And fresh capex?

Fresh capex for the year of 150 crores. Sir, this interview is sounding a little distant. The total assets expected to be maintenance cap is 25 to 30 crores and the total cap to be around 150 crores.

150 crores. Okay, sir. Thank you, sir. I am through. Thank you. Participants, you may start and want to ask a question.

Next question is from Lionel Fiancha from Ford Capital. Please go ahead. Hello, am I audible?

Yes.

Yeah, Gondwani sir, congratulations on the recent set of numbers. So, basically, I have two questions. One is, in the wire segment, you reported a 32% year-on-year growth. So, just wanted to understand that is it driven by a subsidiary demand or a short-term model you see for this quarter? And the second question is that in LRPC segment, volume is 12. This is due to temporary project teammates, price competition or a structural shutdown in the segment? On the first question, the wire business, as we mentioned in our previous talk also, that we have started focusing to increase our wire space.

the market is also better as well as the industry has set our on some of the niche products related to like those things etc.

So this market we have conceptually started focusing to improve our business and we expect this trend to continue even going forward. Coming to the LRPC market Yes, the monsoon period as well as the price and demand and price pressures are significant and as we mentioned in our opening remarks, the volume as well as the margins are under pressure. Our focus would be to keep on increasing our focus on the plasticated LRTC business which would help us to get a better margin for our product. So, this trend of pressure on the general LRPC is expected to continue more so on the margin front. Volumes may get better once the monsoon is over and the project starts, activity starts. Just a follow-up question on the LRPC, sir, what you mentioned. So, going forward, do you think that any contribution of the LRPC segment would be declining from here on? Yes, we don't expect it. It could be at similar levels or would be declining. And the plasticated LRPC, which is the value added, should gradually be going up. So that's what we expect. We don't see this as a very business which can add significantly to our growth going forward. The general LRPC. Just one last question that post your RACI expansion what incremental capacity next time will you add and how quickly can it be rent up for some sudden orders which we can expect? So, for RACI capacity as we mentioned last call call. So, we have overall capacity increases around 40,000 of which row fees will be around 20,000. So, till date we have already installed capacity. and remaining 30 percent installation will be complete by end of Q2 around October. So, which is in this capacity, if in this capacity we are planning to develop new trucks, subjected groups having these additional capacities. So, this will give us good voice going forward.

Okay sir, thank you, thank you. Thank you. Next question is from Sharda Kapadia from SMSS Cabaret. Please go ahead.

Sharda, may I request you to unmute your line and proceed with your question, please?

Hello. Can I order, please?

Yes. So, thank you so much for the opportunity. So, just anyway, with the question of the I am sorry to interrupt you, but your audio is breaking.

Yeah, if you could give the new capex plans beyond Archie. Hello, capex plans for future.

Yeah, for future, we are currently, we have a 60 crore investment plan in Thailand, which is under implementation. And in our Rashi plant, once this phase is getting completed, as our CFO mentioned by quarter two, we will definitely look at opportunities to grow, particularly in our elevators, rope and train rope segment because that is an area we are seeing a lot of traction coming both from the domestic and international markets. So, as and when the demand situation we see that it is growing, we would take advanced steps to increase our capacity. And that could be in the Rachi plant as well as we could add some new capacity in our Hurshiyapur plant to be able to cater to some of these demands.

Sure, thank you sir. So, just one more question from my end. So, we have seen a good growth in the wire strength segment. So, how much sustainable is this growth and is it coming from new customer acquisitions or any industry demand if you could help us understand that?

It is a good question. It is getting new customers as well as increasing the volume with our existing customers. Having decided that this could be an important vertical for us, we have been working on this for last few quarters and we have been able to successfully develop this business. This is not a one-off growth. We will see this growth on a steady basis. Quarter by quarter, you will see volume growing exponentially. this segment. The areas where we are particularly working is one is the auto sector which is fairly strong. We are also working on the door springs as one example as well as on zinc aluminium wire which is going for rockfall barriers as well as some critical string applications. So these are various areas we are focusing in. Now this is going to be an important vertical going forward.

Sure, sir. Thank you so much for your detailed answer. That's it from me.

Thank you very much. Thank you. Next question is from Sanjay from iPod PMS. Please go ahead.

Hi, sir. I have a question on margins and EBITDA pattern. We reported 28,500 of these as EBITDA pattern in June 1st. Is it possible to break this up into say wire rope domestic and wire rope exports? We do not specifically mention about the EBITDA per ton and so if we do a last calculations over the for the wire rope it will be in the range of 55 to 60,000 EBITDA per ton because we allocate most of the fixed cost to the wire rope. On the wire and the electricity segment, on the wire segment, the vector per ton will be between 3,000 to 15,000 and the electricity will be on the lower side or 3,000 to 4,000, 2,000 to 3,000 margin is there in the wire and electricity. Right. Now, the reason I was asking is I was looking at the wire rope realizations in the US and they are as high as say $8,000, $8,500 per tonne. And Wireco does 12% EBITDA margin. So, it looks like they are doing $900 or $1000 EBITDA per ton. That's translating to Rs. 83,000 per ton. So, are we also in a similar barge path in our U.S. exports? And does it mean that actually when our U.S. share of U.S. goes above, the margins can even increase going forward?

Yeah. So, if like a business on average 55 to 60,000 rupees per ton but export is an international market definitely you get a better EBITDA margin compared to domestic. We don't separate it out and those numbers but it would definitely be on higher levels. And if these are shared in our international markets, whether it's US or direct export Europe from India, it would definitely improve the EBITDA for time going forward. So, you will see that.

Okay, okay, okay. So, what's all the past initiatives, Vamisha Martin's initiatives, what kind of EBITDA margin target do we have, let's say, for every channel? FYI, as Shreya mentioned earlier, this year we should be able to achieve 18% on an annualized basis for this financial year based on all the various initiatives of the cost initiatives which we have taken which is under implementation and mostly gets implemented by Q2 of this financial year. The benefits of that we start getting. Secondly, the new CAPEX which has been implemented as we improve the volumes coming from those, as well as some of the marketing initiatives which we have been able to for the new increase capacity, we expect the margins to, if we are expecting 18% for the full year, we definitely expect it to be going 18% upwards in the next year. 19% to 20% is something which we feel that that is something which we should be able to achieve going forward. If I can ask one more, sorry to keep going back to that Paris thing, but say Brayden McCart is based out of UK, so they might have that advantage over us and even Viacom which is based out of USA, can we compete with them despite making in India or Thailand and is there any weakness that you see in Vyco because some administrative resources saying that they are struggling post in the last 2-3 years yeah Vyco we also hear that they are struggling but I am not having much details on that but I can only tell you that you know, our team is fairly confident and we are also very confident that we should be able to maintain and grow our market in that region with our local presence, with our own distribution, our own warehouse and our flow working with the customers and also being able to win a large contract. We expect to... do well in that market. And we, I think, with all other international players who are having a major market share, the Koreans, ourselves, the Turkish, all of us are on a similar tariff level. Chinese are slightly higher tariff. So we are cautiously optimistic about our position in the US market as we speak today.

Thank you and all the best. Thank you. Next question is from Manojeshvi Bajaj from 3Meter Asset Managers.

Please go ahead. Thank you for the opportunity. As you mentioned in Q1 that it is nearing completion of the foundational phase of the transformation. So can you please provide some measurable, specific measurable operation KPIs which we expect to improve by the end of the second quarter and how much percentage of force cutting is done or additional gain has been resulted for now so far.

Yeah, so in terms of the measurable KPIs of course you know we talked about in terms of cost reduction, the employee cost as well as other expenses and we expect decrease in that which will help us get at the 18%. The other is the working capital reduction which came down to 16 days this quarter. Even the inventory came down to 175 days this quarter. We're tracking both of these and we hope to reduce this further by at least 10 days over the next quarter. That is another case where we're targeting. Third is looking at our cash conversion. So we converted about 95% of the operating EBITDA to cash. And by the end of the year, we are targeting to take this even more than 100% levels which we're confident of achieving through overall better financial discipline and working capital management. These are some of the KPIs that we are targeting. In terms of how far we are with this, We started this in around September, October of last year. And from Q3, we expect to see the full test.

Okay. So, like, right now, there is no numbers you can give for, like, how it has been posted.

Okay. You will see from the coming quarters that the full benefits of what she has articulated will start reflecting in our numbers. A few of the numbers she has already given, the rest I think it is work in progress and you will see it coming in the quarter 2 onwards.

Thank you. Thank you very much. That will be the last question for today. I will now hand the conference over to the management for closing comments.

I would like to thank everyone for attending this call and showing interest to Vishwa Martin Limited. I hope we have been able to answer all your questions. The company is dedicated to creating value for all 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 CBR India. Thank you once again for taking the time to join us on this call and see you all in the next quarter. Thank you.

Thank you very much. On behalf of Usha Martin Limited that concludes this conference, thank you for joining us and you may now disconnect your lines. Thank you.