Usha Martin Gdr 144A

Ladies and gentlemen, good morning and welcome to the earnings conference call of Usha Martin Limited. As a reminder, all personal lines will remain 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 the conference call, please signal the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Anup Pujari from TDR India for opening remarks. Thank you and over to you, Anup.

Thank you. Good morning, everyone, and thank you for joining us on Usha Martin's Q3 FY26 earnings conference call. We have with us Mr. Rajiv Jawa, Managing Director of the company, Mr. Abhijit Paul, Chief Financial Officer, and Ms. Shreya Jawa from the strategy and growth team of the company. We'll initiate the call with opening remarks from the management, following which we'll have the forum open for a question and answer session. Before we begin, I would like to point out that some statements made in today's call may be far-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.

I would now like to invite Mr. Rajiv Jawa to make his opening remarks. Good morning, everyone.

and thank you for joining us today. On behalf of the management team of Usha Martin, I would like to welcome you to our earnings conference call for the third quarter of FY26. I will begin with a summary of the quarter and then share our perspective on the drivers behind the performance. Consolidated revenue for the quarter grew 6.6% year-on-year to Rs. 917 crore driven by a better product mix and steady demand trends across our key markets. The wire segment continued to demonstrate strong momentum, delivering a 20.2% year-on-year increase in revenue. The wire rope segment reported 6.6% year-on-year revenue growth, while the LRPC segment recorded a 30% decline year-on-year. Operating EBITDA for the quarter stood at Rs. 176 crore representing a strong 23.3 year-on-year increase. Operating cash flow before tax stood at Rs. 561 crore translating into a robust 114% conversion of operating EBITDA into cash. These results are a direct outcome of the strategic choices we have made. First, we continue to push value-accretive products and applications across our portfolio. During the quarter, this was driven by higher traction in elevator ropes, train ropes and oil and offshore ropes, where requirements are more engineering-driven and less priceless. This approach also extends to ocean fiber, our synthetic steam solution, which complements our steel rope portfolio in specialized oils offshore, and lifting applications. Over the past few quarters, this vertical has performed well for us and we have executed several projects successfully. The Ocean Fiber brand is now established and will continue to scale this segment. Second, our focus continues to be on adding new customers across geographies. because that is what ultimately drives sustainable volume growth. We have a dedicated focus on tracking how many new customers we are onboarding each month across markets. A good example of this is Saudi Arabia. Since starting our rigging business there, we have added around 60 new customers. While these customers are currently small in terms of volumes, but as the trials are completed, and share of wallets increases, we expect volumes from this base to scale up. Third, our focus on cost structures continues to translate into better operating leverage. Over the past year, we have simplified our processes and policies, improved productivity, and rationalized overheads under the once-diffamating framework. This further allowed us to deliver healthy margins during the quarter, and achieved an EBITDA per ton of Rs. 33,350 per metric ton and margins of 19.2%. Fourth, we continue to focus on generating strong cash flows, improving working capital and being thoughtful about capital allocation. This has allowed us to standard the balance sheet while continuing to invest. We close the quarter with a net cash position of Rs. 198 crore and an ROC of 20%. Looking ahead, growth remains the key priority for us and volumes are an important part of that equation. We see volume growth coming from new focused areas where we have been building capability over the last few years. This includes the high quality wires such as Galstar, value-added ropes across segments like elevators, cranes mining, and oil in offshore, as well as specialized products like the plasticated LRPC. These are categories where customer qualification cycles are longer, but once established, they tend to be more stable and recurring. With capex at Ranchi Plant facilities largely stabilizing, ongoing approvals, and a healthy order book, we are well positioned for a pickup in volumes in the coming quarters. Additionally, Over the past few quarters, we have significantly deepened our engagement with the end customers. Our R&D teams are working closely with these customers to develop customized solutions, enabling us to participate in more specialized and higher value requirements. This closer integration with customers also provides us with reasonable visibility on demand pipeline, reinforcing our confidence in scaling up volumes and value. While the global operating environment continues to present uncertainty, the steps we have taken over the past years give us the confidence in how the business is positioned, both operationally and financially. This gives us a stable base to continue into our next phase of growth. With this, I would like to now invite our CFO, Mr. Abhijit Kaul, to present the financial highlights for the quarter. Thank you. 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 and nine months in date 31st December 2025. In Q3 FY26, our consolidated net revenue from operations stood at Rs. 917 crore as compared to 861 crore in Q3 of 2025. This performance was driven by a healthy 20.2% year-on-year growth in VAR segment, while VAR segment, which accounted for around 73% of the total revenues, registered a 6.6% year-on-year growth. The growth was supported by an improved product mix and a disciplined approach to the volume across key markets. Operating ability for the quarter stood at Rs. 176 crores as compared to Rs. 143 crores in the same quarter last year with margins improving to 19.2% from 16.6%. Net profit for the quarter Q3 FY26 increased to Rs. 107 crores from Rs. 92 crores in Q3 FY25 despite a one-time cost impact of Rs. 13 crores arising from the implementation of the wage score. The improvement in profitability was driven by favourable sales mix and operating leverage, supported by sustained cost discipline. For the 9-month period ended 31st December 2025, consolidated net revenue from operations stood at Rs.2712 crore, registering a 5.2% year-on-year increase over 9 months of FY25, During the period, the wire segment recorded a strong 21.8% year-on-year growth, while the wire root segment grew by 5.6%. Operating EBITDA for 9 months FY26 screwed at Rs. 494 crores as compared to Rs. 458 crores in 9 months of FY25. Profit after tax from continuing operation for the 9-month period screwed at Rs. 336 crores up from Rs. 305 crore in the corresponding period last year. On the balance sheet front, overall net working capital has reduced by Rs. 97 crore from the peak of December 24, reflecting continued improvement in working capital management across the business. This reduction was driven primarily by lower inventory levels and continued discipline in receivables management while maintaining a stable current ratio. Net working capital days have remained broadly stable on a training basis, even as absolute working capital levels have declined, indicating improved execution discipline. Free cash flow generation during the 9-month FY26 remained strong at Rs. 318 crores, supporting meaningful deleveraging of balance sheets. Gross debt reduced from Rs. 338 crores in March 2025 to Rs. 172 crores as of December 2025. driven by internal accruals. As a result, the company has moved into a net cash position, which has also led to a notable reduction in the finance cost and further changed our financial flexibility. To conclude, our performance in Q3 and past 9 months of FY26 reflects the benefit of our disciplined operating and financial approach, with improving margins, strong cash generation and a strengthened balance sheet. With a net cash position and stable demand across key markets, we believe the company is well positioned to support growth initiatives while maintaining financial discipline. This brings me to the end of my address. I would now request the operator to open the line for Q&A session. Thank you.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 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 their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if you wish to ask a question, please press star and 1. We take the first question from the line of Aman Kumar Sarathia from ADK Securities. Please go ahead.

Good morning sir and congratulations to the team for delivering a strong set of results in challenging macro environment. The healthy care for generation is particularly encouraging but sir I have few questions regarding the results. Sir, when do we expect a clear and sustained recovery in volume growth? And which business segments are likely to lead this takeaway?

Thank you so much for that question. Of course, volume growth is very important to us. If we look at the nine months period so far, we have seen about a 5% increase in volume growth. On the wire side, we have been able to increase volumes more. But on the rope side, of course, there is definitely further scope to push up which have only been marginally up, I would say, year on year. Then you can see this growth. So, of course, from a CapEx point of view, our capacities are ramped up on the rope side and we are ready to push up production. Now it's just about getting the right mix for optimal utilization and also pushing further on the market side. As we mentioned in the opening remarks, there are a few things that we are doing on that front to push up volumes, pay it, you know, one actively developing and tracking new customers across all our regions. Second, we're also working on more OEM approvals in the value-added segment, which is our focus, for example, in elevators, screens, et cetera. And also, we're pushing more volumes through value-added services, which, you know, we're working more directly with the end customers, which is helping us get better visibility on demand and, you know, so we can plan the right mix better. So all of these should help us, you know, in the coming quarters to push up volumes into 4 as well and then in the next financial year.

Madam, whether we are seeing a good order position compared to last year?

Yes, we see a much healthier order both on the domestic and export fronts based on all the various initiatives the company has taken. and with this increased order book position which is much better than what it was same time or in the previous quarters we expect that to also help us ramp up volumes in the coming in this quarter and the coming quarters and sir generally I think the high value orders the capacity utilization comes down so do we have better high value orders or

Is the commodity part of the order really helpful?

The commodity part of the order generally is on a month-on-month basis what comes. The high-value products and project-based orders which are generally booked in advance because they are specialized in nature, require special raw material and extra manufacturing processing time for those. And we see a very good order book on those at the moment as well as good pipeline of inquiries. Hopefully, that should help us in translating into more value-added products in the future. The other part, what you said, of course, the value-added production, the processing time is higher than the standard in general purpose work and we see generally a 30% increase Lower output, 30 to 35% lower output if it is a specialized product requiring higher compaction and higher densities of ropes.

And sir, since Europe is our very important market, so how will free trade agreement translate into tangible benefits of Ulsa Martin in terms of export, volumes, margins and overall competitiveness over the next 12 to 24 months?

I think European market, the free trade agreement in any case for our product was nil beauty. So, we don't see any major issue, any major improvements. It was already on a zero duty. So, it is business as usual for us. Our product did not attract any beauty even at all. So, it's business as usual for us.

And sir, what is the current status of the Saudi Arabian business and how the talent operations are ramping up?

The Saudi Arabian business is slowly ramping up. We have seen quarter by quarter the business ramping up. As I mentioned earlier that we have developed 60 or new customers and more and more are getting added and supplies have already started So we expect from quarter 4 onwards improvement in the volumes and it should be a gradual ramp up in the next financial year and we should be able to see better numbers in the coming quarters.

And sir about Thailand operation?

Thailand operation is the Thailand plant we have made some capital expenditure and started some modernization of our plants. and we see a good traction of orders coming in from Southeast Asian markets and also with some European customers based on the new capex that we have initiated. However, we are in the process of also working on a cost optimization plan which would take another I would say four to six quarters to be able to fully implement and once these two initiatives implemented. We hope that Thailand in the next four to six quarters should also start gaining better financial numbers.

I have one more question. How is the synthetic sling business scaling up and can it become a meaningful contribution to revenues and margin in the next financial year?

Yes, so the synthetic business is doing well. As we mentioned the Ocean Fiber which is our brand for the synthetic sling solution that is now well established we are consistently getting orders on a month-on-month basis. And we do hope to continue to grow this vertical in the next financial year. We developed 8 to 10 new customers and we're also getting repeat orders from our existing customers. So, you know, definitely over the next year and then over the next 2 to 3 years, this has become an even more meaningful vertical for us.

And when do you expect this? And I'm happy to say that, you know, when we had initiated this project, that it would take a couple of years to break even. But I'm happy to say that in the very first year, we would be cash positive in this business. And the inquiry base is strong. And we hope that this can help, as Shreya mentioned, to ramp up in the coming couple of years.

That's great, sir. When do we expect a significant volume in Plasticated LRPC and how important can the product be in the company's future growth?

Plasticated LRPC is a very important part particularly for the infrastructure business. The approval process does take time. We have approvals from two or three of the big players. And we are in the process of getting approvals for a couple of more, which we hope should happen in the next two to three months. Once these approvals are in place, we should not only be able to supply to products to them within India, but also an opportunity to export this. I would say give us another two quarters, say quarter one and quarter two, then we see a good ramp up of plasticated NRDC also. The good part for Usha Martin is that we have a fairly diversified geography and that is also helps us particularly in this geopolitical crisis as well as certain segments keep improving or keep coming down. So, our focus would continue to be servicing all these geographies and trying to increase our volume wherever possible. Of course, Saudi is something we started new. We are going to ramp up. Europe continues to be an important for our future growth as most of the big producers and the big contractors are based out of Europe. Their growth demand may be different parts of the world but generally the orders generate from from Europe. So, European customers, the OEMs would continue to be our primary area of growth within the rope segment. But, because of repetition, we would continue to focus in every part because we have the capacity now, we want to ramp up our volumes and we don't want to ignore any segment or any geography. So, I think the Things should get better. You will see the volume as well as the top line should start growing value-wise in the coming quarters based on all these initiatives.

Thank you for your time and what a detailed response, sir. Thank you.

Thank you. We take the next question from the line of Justik Varya from Clockwise Capital Advisors. Please go ahead.

Hi, sir. Thanks for taking my question. Sir, could you tell us about trends and volumes in India, US and Europe in the third quarter?

It has just gone by. Sir, this is only about virus.

So, going by the volumes, you want to know quarter 9 month figure, right?

No, in the quarter, third quarter, how was the volume growth in India, US and Europe and why rose business?

So, year on year growth, so year on year this quarter we did around 13,000 tons in India, right.

This is again of the quantity. Again, around 12,000 tons in the Q3 of 2025.

So roughly, I will say 10%, around 5% growth over last year 50. On the European side, it is more or less flat. It is a similar level, a bit on the lower side. And US, growth of 5-8%. Got it.

So what is the reason that growth in India has been, you know, less than expectations in the last quarter? I think management has said that you know last quarter was subdued because of monsoons and hence the volume growth will come back in third quarter. So but this quarter also we see single mid single digit kind of growth in India and Europe is flat. So what are the reasons driving this subdued growth in volume?

So overall in the domestic market we are seeing growth you know in the categories that the you know, the value-added categories like, for example, elevator rope where, you know, we, in the domestic market with the tier 2, tier 3 cities coming up, we are seeing growth in that segment. Even in the port segment, we have reasonable market share, but we are seeing growth there where the growth has been slightly slower from the DP rope segment and more of the low-value wire rope segment where, you you know, as we mentioned before, when we focus more on the value added side, the overall productivity of the plant decreases. So, we have to make a choice as to, you know, where we want to focus our energy. So, there are certain low value general purpose biotopes where, you know, realizations aren't as attractive and because our focus is on the value added side, that is some area that we have seen volume stay stable or decreases.

Got it. And is high competition in low value GP ropes also the reason why maybe margins have gone down and hence you are not interested in that in growing that business?

No, it is not entirely true because the domestic market we are not other than very few selected areas not because of competition because of a strategic choice we are made as whether I produce those products on those values or if I have the opportunity to produce value-added products, we produce which will give us a higher contribution on a particular type of product. And that choice we have made. So, it's not that we are losing our price to competition. It's a deliberate policy that if I have orders of the highest value-added products, we focus on servicing those customers. But even the domestic market has been subdued. It has not been so aggressive on the easy rope market and we will see that in quarter 4 onwards we are seeing a pickup of demand and we should be able to get better volumes in the coming quarter.

Got it sir. Thank you. That solves the market. Thank you. We take the next question from the line of Rupesh Tatya. from Long Ikpiti Parthas. Please go ahead.

Yeah, thank you for the opportunity and congratulations, Rajivji, for very good set of numbers.

My question is, sir, on this CBAM issue, Carbon Border Adjustment Mechanism that Europe has come up with, I think it became applicable from January 26th. And I think in the FTA also, this was, I think there was no sort of relief on this front. And I think steel is one of the major industries. They are basically the target industry of this.

So, is there any impact of this on us? Do we need to change some source of steel? How will it affect your steel? Can you give some color around that?

Yes, so on the C-band issue, if you look at our product names, it's wire ropes and wire upside. So, wire ropes comes under section 7312, which is currently as part of the definitive period in January 2026. It's not included yet because it's a more downstream complex C product, which will likely get included in the 2028 cycle. So, from a wire rope standpoint, we are not impacted yet. On the wire standpoint, which comes under code 7217, that is something that is included. Most of the wires that we supply is, you know, largely in the domestic market in the United Kingdom, which is not included. And some small volumes, maybe around 100 to 200 tons annually in the European market. So, for that small volume, it comes into effect from this year. What we are doing is we are doing all of the calculations which need to be submitted on an annual basis to an FY, February FY2027. And we are doing all the necessary calculations, working with our customers to understand what the impact would be and taking necessary actions. As of now, it's a very small volume for us, so not a meaningful impact. But we are making all the preparations required for when large amount of our products get included and for wire rope which also will probably get included in the coming two years.

So what sort of changes do you have to do from 2028 and budget sort of reduce our cognitive advantage in the sense that India has one of the lower steel prices, doesn't give some advantage to European manufacturers. Any colour you can give around that? What exactly do we have to do to not have to give any levy for the CDAN?

So, what we are doing now is, you know, even though this is years ahead, we are starting to do the calculations both of direct and indirect emittance for the product to understand what actually could be the potential financial impact. So, even though it's actually not required to do the submission, we are still doing the calculations. So, we get an estimate of what that impact would look like. Now, what we have to do is look at, okay, how do we minimize this impact going forward, right? So, that might mean that, you know, we look at dedicated lines within the plant which are more already green manufacturing that can help us reduce this emission. We've already taken up a project to set up a four megawatt solar power plant in the Ramsey plant. So, that can be more dedicated to these lines for which we supply to, you know, the European markets. So, these are some of the initiatives. Once we have a decent understanding of the impact, we will use these initiatives to see how we can overall minimize it so that the overall financial impact and burden on us is reduced to the maximum extent possible.

So, it is a callback of problem. Is that the right takeaway from this?

Yes, definitely. And ultimately, CBAN is not just applicable to us, it will be applicable to everyone else as well, right? So, you know, to that extent, you know, it is not a significant competitive disadvantage to us, but we still want to take all the necessary actions in place to make sure we are prepared. And this is a journey we started successfully. you know, a few years ago already with the, you know, trying to see what all we can do in the plant to minimize our emissions. So, that is a journey that will continue and now we put the accelerator on it as well.

The second question is, where are we on the ramp up?

I don't remember now how much capacity was there. What is the capacity utilization?

How will you see FY27 playing out? How will the value mix make some color around Ranchi KSX Tampa? So, we took a capacity addition of 40,000 tons in ropes at our Ranchi facility. So, that includes 20,000, sorry, 20,000, 19,000 tons of rope and 21,000 tons of wire. So, our rope capacity at Ranchi and Hurshia, Ranchi was around 72,000 tons before this addition and with this 19,000 tons addition, it will be around 91,000 tons. And our capacity utilization in Rashi facility is around 75% at the moment after this addition. So, that is related to the rope capacity. On the wire front, in Rashi our capacity after this addition of 20,000 will be roughly 75,000 tons. where we have been around 78% capacity utilization.

So, this 75% capacity utilization is the unquantitated capacity utilization?

For Rajshree plant. This is for Rajshree. You asked for the Rajshree plant. So, what about the Rajshree plant? Okay. Okay. And final question Rajshree is I mean we are now net cash positive what an amazing journey I think most of the issues are caught in. So, are there any, you know, large margin markets or large margin product categories that we are working on and, you know, that can take us from, I don't know, 10,000 crores revenue in viral to, let's say, 4,000 crores revenue in 2-3 years. What is the strategic roadmap looking like? How are we feeding the new segments?

Any color around that would be very helpful.

Yeah, definitely. I mean, now that we have a net cash position of about 200 crores and that is continuously growing. So we're constantly thinking about how we will continue to invest and the priority would be to continue to reinvest in the business. And as we mentioned, we want to do all of the capex from our internal accruals as well. In terms of demand, we do see demand across some product categories where capacity is still a constraint today. So, we are continuing to deploy targeted capex in those areas, primarily around, you know, brownfield projects or de-bottlenecking projects where we feel that returns will be attractive and the capex of this would be around 250 to 300 crores around that level. At the same time, we are also looking at, you know, inorganic opportunities that will help us build markets for the capacities that we have created. So we are present virtually across all markets, but in certain areas, for example, in Europe, our presence is primarily in certain regions, whether it be Netherlands, in the England, Scotland area, as well as in the Spain area. But there are so many other markets in Europe, be it Germany, where we are seeing some growth, and other markets in Europe as well, where there is still an opportunity for growth. So, we will look at both inorganic and organic opportunities that will help us build those markets. And, of course, you know, as part of our overall capital allocation plan, as well, you know, we might also look at greenfield opportunities if that makes sense.

Good, good. And, Harit, just a quick question. The Parvath Mala project, I think, I saw Danny got a contract maybe, I don't know, six months ago, three, four, six months ago. When can we realistically expect first commercial order for the Parvat Mala project and it will be what kind of range it will be, the size of the order? The Parvat Mala projects, you know, the rope, there are few contracts which have been issued. We expect the projects to use the wire rope procurement at the last stage of the project. We are in touch with all the supply, all the people who have won the projects, be it in Prayagraj, Bees, the Adani and they are also in touch with us. But I think it will be not before next two to three years we see the first kind of supplies happening to these projects because these projects take minimum three to five years for them to come to a level where they start tying the wire ropes. So we are in the initial stages but I am happy to say that few of them are in constant dialogue with us and we are working to supply all the details to them, work with them and hopefully let's see if we can get few orders in the next couple of years.

Thank you. Thank you for answering all my questions for them.

All the best. Thank you. We take the next question from the line of Roland Nandu from Edelweiss Public Alternative. Please go ahead.

Yeah, hi. Thank you so much for taking my question. I just wanted to understand some of the colors that you have already mentioned on the volume growth and the kind of initiatives that we are taking. Are these initiatives something that will show results as early as Q4 or do you think this will take a slightly longer time? And the broader question that I am looking for is that if I look at your previous outlook, our company should have a steady growth in terms of growth of top line, at least in, you know, 12 to 15% is what you had, you know, alluded to, right? So, should we return back to that run rate at least in FY27 onwards or do you think that that is going to be a challenging thing for us?

So, you know, on the volume side, you know, we should see a gradual ramp up from Q4 and then in the next financial year, it should definitely be better based on, you know, some of the inquiries as well as the order pipeline that we were mentioning. If you look at the past three years, you know, CAGR of the buyer and group business, on a volume standpoint, we will see that it has been around the 11% to 12% range. Where the degrowth has happened is on the LRTC side which kind of mutes the overall volume. Even on a 9-month basis, if we look, volume growth was 5% but wire and rope combined is at 8% left. That being said, we know that there is still hope for improvement in capacity globally at about 145,000 tons now and we are at 74-75% utilization overall. So, there is still a lot of room for growth. We have the capacities and with all of the initiatives, we should see, you know, by Q4, slow pickup and then, you know, overall, you know, further pickup in FY27 as well. On the revenue standpoint as well, on the wire and rope side, based on, you know, the forecast for this year, if you look at the three-year CAGR from FY24 to 26, on the wire and rope side, Given it's about 10% to 11%, roughly around what we had guided. Again, on the LRCC side where, you know, the market has, you know, it's become a more commodity market. So, that is something where we see peak growth which, again, brings up the overall numbers. Going forward, again, on a revenue standpoint, in the next year, we do expect early double-digit growth for sure.

Okay. That's very helpful, Shreya ji. Where I was coming from is that if I looked at your operating EBITDA number, right, we are at that 600 crores run rate. We were at 600 crores in FY24. In FY25, also we were at 600 crores. Maybe this year also, best we will do is, you know, end up at that number. Right. So, three years of, you know, flat-ish EBITDA. My question is that is there any risk that you see to percentage EBITDA margin, proton EBITDA margin next year? that could still keep the EBITDA growth lower than the top-line volume growth that you said, you know, Hollywood is too?

Yeah. I mean, you know, on an overall EBITDA level, if you see, last year we were operating EBITDA of about... 597 this year in the 9 months itself we are at 494 so definitely by and last 2 quarters we had about you know 175 176 crores overall So, you know, at minimum, we should, you know, see not a 600 crore level for sure. Definitely, you know, more in the 680-700 crore range is what we see for the year. So, from a 600 crore base of the last few years to 680-700 crores is definitely a growth on an EBITDA standpoint. But yeah, on the revenue standpoint, we definitely have more work to do. 100% agreement on that and with all of the initiatives that we mentioned, we should see that coming as well while maintaining our margins at the 19 to 20% level.

That's great, Sayagi. Thanks a lot and all the very best.

Thank you. Thank you. We take the next question from the line of Kartik Kriya, Kumar Pate of 360 One Capital. Please go ahead.

Yeah, hi. Am I audible?

Yes. Yes, you are. Thank you.

Yeah, yeah. Thank you for the opportunity. I just wanted to understand two things. With most of the KPEX over, like, what is your vision for the next two to three years if I, you know, you can give me some advice on that, like, How much capex are you going to do, sub-templars?

On the capex, you see, we are, as mentioned earlier, that we have a few areas where we see growth and demand coming up, both in the domestic and export market, particularly on the value-added products like elevator, night train ropes, port cranes, and some for the oil offshore, and even on the ocean fiber. So, all we should be able to do, I think the capex should be between 250 to 300 crores a year. If we have to maintain 10 to 20 to 15 percent volume growth, so, you know, to have these capex in the next two to three years, we expect between 250 to 300 crores, including maintenance capex at least.

Sir, what will be your maintenance capex number if you put this capex number?

The maintenance capex number would be around 50 crore.

Okay. And, sir, if I just want to understand what is the kind of mix between the three segments like you are, you know, when you think of your business like two to three years down the line, what is the segment, the ratio that you think like should be the optimal for your business? Yeah.

You know, definitely going forward, like you mentioned, LRCC, because it's become a commodity market, that will become a much lower percentage in terms of, you know, volume. And the growth is going to come from wire ropes and wires. If we see ropes right now, it's around 73% of our top lines. And that will keep growing in the next three years around 75-76% at the least. And wires will also keep growing as we're going into more high-value wires as well as overall increasing our wire volumes by more export volume as well other than the domestic which we've been doing. On the LRTC side, you know, while we will not see that volume growth because of the black LRTC, which is a commodity market on the plasticated LRTC side, as we mentioned, as the approvals come in and our volumes, you know, start to go up as the projects get executed, I think that is an area of concern. focus. Right now we have a capacity of about 6,000 tons per annum and we will look to further expand that as well as the approvals for our various customers.

So basically wire and wire root segment is expected to grow at around 10-11% is what you are saying, right?

The wire segment of the The rope segment should grow with all the capex in place and the various initiatives which we have taken to develop newer geographies and newer products should grow by about 10-12% and the wire segment as we have seen growing by about 20% this year. This momentum should continue with more and more of the value added wire products which we are trying to develop both for the domestic and export market. So these will be the key drivers and together an average would be close to around 12 to 15% of volume growth in the wire and rope segments combined.

Okay. Understood, sir. And sir, since like in this quarter, you are seeing some, you know, good amount of price hikes in steel and as well as some price increase in zinc as in commodities. So, like, what could be any impact in the coming quarter that you could like highlight on, you know, margins?

I think the wire and the LRPC is generally part of the maker. So, any speed price increase or decrease is always passed on to the customers or, you know, so we don't see any, and we have already started seeing the growth increase as the speed price on these products. On the wire rope front, I think we have always seen in the last few years also that because of our overall mix and price management, we are able to ensure our protection of margins. So, even if the speed price increases, we are hopeful of remaining between the 19-20% margins what we have indicated earlier.

Right, sir. And it won't have that specific sound volume if I get the stents on.

No.

But it doesn't impact the volume.

Okay. Okay. Thank you. Thank you.

We take the next question from the line of Sukrit D. Patil from iSets and Trade Private Limited. Please go ahead.

Good morning to the team. I have two questions. My first question is, as you have outlined your roadmap in the commentary so far, just want to understand the key trade-off the management is currently navigating across Isha Martin's core wire rope and cable program. For example, between capacity allocation, delivery timelines and margin optimization, What internal thresholds or early demand signals would prompt you to recalibrate your current plan of action if the conditions shift?

Yeah, of course, you know, it's a constant balance between value-value segment and also, you know, volume growth, right? So, that is a constant balance. And as we mentioned, for the value-added groups, we have a more advanced order book because the delivery timelines, etc., for those are a little bit longer and the requirements are also more customized. But in situations where we in months where we don't see for example a lot of traction on the value aspect we would recalibrate our approach focus more on the GP rope type because ultimately we have to get we want to get to the overall volume level and ensure efficient utilization of all of our assets right so we are constantly balancing between the two and on a month-on-month basis, depending on the demand pipeline, we take that call. Thank you.

My second question is to Mr. Paul. Again, it's a forward-looking one. From a monitoring standpoint, how are the early operational or financial indicators you track internally that could signal either upside or some pressure on the margins in the cash flow before they show up on the reported numbers? Just want to understand your view on this, on the tracking part of the thing.

So, overall, we track the net working capital numbers. That is one key number for us. that we track on a monthly basis. Basically, inventory management and receivables management. These are the two areas where we are continuously focusing. And that is ending for good improvement in the cash flows. From the cash flow side, these are the two areas we constantly monitor to ensure that cash conversion is positive. Thank you, M. Das.

Yeah, please go ahead.

Just to add to that QKTI sector, Overall, we've had, you know, as a group is, of course, around our volume growth, around our copline growth. Third is around our conversion of, you know, EBITDA to operating cash flow. We want to maintain that between, you know, above 95% at all times. And right now, we're at 114% for the nine months. And the fourth KPI that we have as an organization is our ROCE, which is right now 20%. And our long-term goal for that is 25%.

Thank you and best of luck for the next quarter.

Thank you.

Thank you. We take the next question from the line of Anil Yadav from ACT Capital. Please go ahead.

Hello, am I audible? Yes. Okay. So, good morning and congratulations on the set of numbers. So, my first question is, if we look at our overall wire of huge volume in telecoms, Could you please help us understand what proportion is currently coming from value added for specialty wire rope? Additionally, how does this admin compare in realization versus standard wire rope product?

So, for the within wire rope segment, so wire rope is 70% of a total turnover is backup and within wire rope 70% is value added. And if you see the difference in margin, It is around 1 lakh is the difference in margin between a general hook and a dead loop on an average.

Okay. Within the total wire of torsion mix, could you share the approximate tonnage of the aggregator loop specifically to animator loops? And if possible, what would be the average relation point for this category compared to the blended wire of torsionalization?

So, please.

Yes. We generally don't put the sector-wise volume. What we really share is between the GP row and the value added as two separate segments. Within that we don't individually

discussed on the volume side. On the top line side, the rate is about 10, 9 to 10 percent of the overall top line. You know, on the volume side, that's, we don't split it up by any segment. We don't try.

Okay. Okay, understood. And my last question is, out of total wire of volume, how much tonnage would be logged code, logged code wire of 33 MCWR? Further, could you provide some perspective on how much of the LCWR volume is currently right to infrastructure programs such as Parvath Mala or similar?

As mentioned to you for the previous question, we don't get into individual segment wise reporting for individual sectors like this and we always look into between the specialized and non-specialized and that is how our reporting is done and that is how we will continue to individual sector wise we do not have those numbers imposed.

Okay. Thank you so much. Thank you for taking my question and time.

Thank you.

Ladies and gentlemen, we take the last question from the line of Rajesh Agarwal from Mani Or. Please go ahead.

Sir, my question on any further scope of working capital improvement

Of course, working capital is like our CFO mentioned. In last one year, we have reduced by almost 97 crores by writing with a common, with every, all our business entities as a part of Manusha market are on a common digital platform and that is helping us to track our individual very healthy inventory and the quality of inventory. So this is an ongoing ongoing exercise and that is we hope that this should continue to get better in the coming quarters also.

Can you quantify the number of days? Now in this presentation it was 199 days. So can it come down to 175-180 days?

So we are always trying to do that. So now it is our target is to reduce to at least 180 days.

And

And, sir, second question, the valuation will improve going further, so is there a scope of margin improvement also?

As we mentioned earlier also, that our margin, which was, which had come down to about 16, 17 percent, 16 last, we would be, and last two quarters, we are at about 19, around 19 percent. So, from the product mix improvement, we would be between 19 to 20 percent. That is our target And beyond that, I feel that if you try to keep on increasing that, you start losing your volumes and market share. So, we would like to keep that pursuit and try to maintain increased volume that we have become in 19 to 20 percent.

So, the last question on the labor code, one-time provision has been done. So, every quarter, the employee cost will exist from here or it will remain the same?

No, no, that is, so one time cost has effect of the retrospective effort. So, it is much higher. Okay. So, there will be some increase in the gratuity, the expenditures going forward, but that will be less than accrued in a year.

Okay, on a year. It won't be much.

No, no, it won't be much.

Okay. Thank you, Pradhan. Thank you.

Thank you. Ladies and gentlemen, with that we conclude the question and answer session. I now hand the conference over to the management for their closing comments.

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

Thank you. On behalf of Usha Martin Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your line.