Usha Martin Gdr 144A

Ladies and gentlemen, good day and welcome to only conference call of Usha Martin Limited. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch tone phone. Please note that this conference is being recorded. I now have a conference of Mr. Devrishi Singh from CDN India. Thank you. I know what to use, sir.

Good morning everyone and thank you for joining us on Usha Martin Q1 FY27 earnings conference call. We have with us Mr. Rajiv Jhawar, Managing Director of the company, Mr. Abhijit Paul, Chief Financial Officer and Ms. Shreya Jhawar, Director 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 open the forum for 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 Ms. Farah Jawa to make an opening remarks. Thank you and over to you.

Thank you everyone and thank you for joining us for Mr. Martin's online conference call for the first quarter of FY27. I will begin with a brief overview of our performance and the key business developments during the quarter following which our CFO Mr. Abhijit Paul will take you through the finances in greater detail. We have made a strong start to FY27 Consolidated revenue increased by 16% year-on-year to Rs. 1033 crores Operating EBITDA stood at Rs. 208 crores a 44% increase year-on-year with an EBITDA margin of 20.1% What is particularly encouraging is the quality of this growth Across our businesses, value grew faster than volume, reflecting improved realizations and our continued shift towards specialized products. You will see this trend through each of the verticals I now take you through. Starting with wire ropes, value growth was strong at 18% year on year, even as overall volumes were marginally lower. I want to highlight that the volume decline was largely due to the middle east operation. Across our other key markets, India, the US and Europe, we saw healthy volume growth and our geographic diversification helped the overall growth business remain robust. In the domestic market, growth volumes grew approximately 12% year-on-year, while value grew around 21%, supported by healthy demand across train, elevator and fishing segments. The US and Europe both had strong quarters, In the US, growth came mainly from elevator and mining segments, while in Europe we saw good traction across oil and offshore renewables and value-added services. Now coming to the Middle East operations, volumes were down approximately 28% due to continued geopolitical and market destruction. However, realizations improved by approximately 36% on the back of better pricing and a more favourable mix. This allowed us to hold revenues broadly at last year's levels. Even in a challenging market, the strength of our portfolio protected our business. Now turning to Wired, the business delivered healthy growth during the quarter with volumes up approximately 19% and revenue growing around 32% year on year. The Wired portfolio today is largely domestic driven and exports represent a significant growth opportunity for us. We've already begun supplying to select European customers in high-value applications such as automotive and workforce protection and we see considerable headroom to scale this as we secure further approvals and deepen our coverage in these markets. On Plasticated LRTC, the business continued to gain traction supported by healthy demand both in the domestic and export markets. A key milestone this quarter was our first international order for plasticated LRTC stands for a state-able application. This is an important step. As further approvals mature, it opens up meaningful opportunities to expand internationally. This will be central to how we compete in the LRTC segment where black LRTC has become largely commoditized while Plasticated offers genuine differentiation and better value. Coming to Ocean Cyber, Ocean Cyber continues to build momentum. While it remains a small part of the overall business, we are encouraged by the progress across offshore and heavy lifting applications and the pipeline of opportunities ahead. This segment complements our core product portfolio and we see it as an important growth lever for the company going forward. Overall, I would like to highlight four broader points from the quarter. First, the improvement in performance reflects our shift towards high-value products and applications. Over the past few years, we have made sustained investments in centering our manufacturing and R&D capabilities, enabling us to address technically demanding applications across global markets. Many of these products require extensive development, testing, and customer qualifications, creating meaningful barriers to entry. Our growing track record of approvals and successful seed performance validates this strategy with the benefits increasingly visible this quarter across our growth portfolio, value-added buyers, Plasticated LRPC and Ocean Cycle. Second, we were able to protect profitability and expand margins despite a significant increase in key input and logistics costs. We implemented pricing actions across segments to pass through these increases. Together with improvement in product mix, cost discipline and operating efficiencies, this enabled us to expand EBITDA margins to 20.1%. Third, Profitability translated directly into cash. He generated operating cash flow of approximately Rs. 242 crores representing cash conversion of 116% of operating EBITDA and closed the quarter with a net cash position of approximately Rs. 465 crores. Fourth, this balance sheet spent allows us to keep investing confidently in the future growth. During the quarter, we incurred capital expenditure of approximately Rs. 73 crores. For FY27, we continue to expect capex of approximately Rs. 250-1500 crores. These investments are focused on expanding capacity in specialized wire rope and improving manufacturing efficiency. A key project underway is the expansion of our elevator rope capacity by approximately 6000 metric tons per annum The additional capacity is expected to be commissioned in phases beginning October with the project scheduled for completion by the first quarter of FY28. Looking ahead, wire rope volumes remains a clear priority and our approach will be value-led volume growth. We will also continue to improve mix, scale our newer verticals and send in collaborations across our global operations through the One Usham Martin initiative. While the external environment remains dynamic, demand across our key applications remains healthy. With our differentiated portfolio, long-standing customer relationships and strong balance sheet, we are confident of delivering consistent and profitable growth. With that, I would now like to invite our CFO, Mr. Abhijit Kaur, to take you through the financial performance for the quarter in greater detail. Thank you.

Thank you and a very good afternoon to you, very good morning to everyone. I will now provide a brief overview of the company's financial performance for the quarter ended 30th June 2016. During Q1 FY27, our consolidated revenue from operations stood at 1033 crores from 2884 crores registering a healthy growth of 15.4% year-on-year. During the same period, our operating EBITDA grew to Rs. 208 crore from Rs. 145 crore, a growth of 44% year-on-year. This demonstrates that our profitability growth has been driven by a richer product mix, effective cost recovery and strong operating leverage, enabling a significant expansion in our business. This is visible from our EBITDA margin as well, which improved to 20.1% a 380 basis point increase year-on-year. Profit after tax for the quarter grew to 142 crores, from which it is 101 crores, registering a growth of 41% year-on-year. From a segmental perspective, the wire rope business recorded revenue growth of 18% year-on-year, while the wire and strand segment grew 31.7% year-on-year. The electricity segment reported a marginal growth of 3.9%, year on year. Within value, the value added group component to that 73% compared to 70% in FY26. This has enabled us to achieve an EBITDA part-turn of Rs. 40,581. As highlighted earlier, our focus on improving product mix, increasing the share of specialized products and maintaining effective cost management continues to support profitability during the quarter. Our ability to pass on higher output, higher inputs and freight costs further enabled us to maintain healthy marketing. Cash generation remained healthy during the quarter. Our operating cash flow before tax 2.242 crore translating into a cash conversion of approximately 115% operating EBITDA. After funding capex of Rs.73 crore Free cash flows ₹200, 135 crores Continued focus on working capital management further strengthened our financial flexibility and ability to invest in our growth priorities. Our return on capital employed improved to 21.4% from 20.6% as of March 26. I am also pleased to share that during the quarter, the company's long-term credit rating was upgraded by India Ratings and Research to INB AA- from INB A+, which has developed. This upgrade reflects the continued strengthening of our financial profile, healthy cash generation, and prudent capital allocation over the past few years. As we move forward, we will remain focused on maintaining healthy cash conversion improving working capital efficiency and deploying capital selectively towards opportunities that enhance returns and support long-term growth. To conclude, we made a strong start to FY27 with healthy revenue growth, margin expansion and robust cal generation. Our stronger balance sheets and improved credit profile provide us with financial flexibility to pursue our growth plan while maintaining capital discipline. We remain committed to delivering profitable growth and creating long-term value for our stakeholders. This brings me to the end of my remarks. I would now request the operator to open the floor for first question and answer session. Thank you.

Thank you so much sir. Ladies and gentlemen, we will begin with the question and answer session now. Anyone who wishes to ask a question, press star and 1 on their touch phone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are required to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Aman Kumar Santhalia with AK Securities. Please go ahead.

Good morning everybody. Sir, first of all congratulations to SEA to become a part of board of director and because of the effort of Rajiv sir and you under the leadership of both of you the company has done excellently in this challenging global environment. and for the first time the company has achieved a turnover of 1000 crore rupees quarterly. This is again a very big achievement seeing the challenges geopolitically. So, I have few questions regarding the quarterly sales. Question 1 is sir, how has the wire roof performed in terms of volume compared with both the previous quarter and the corresponding quarter last year? Could you also share your outlook for volume growth over the coming quarters? And one more thing I want to add that how much volume loss we have incurred due to this major crisis?

Thank you Amanji for your question. Growth volumes were marginal lower this quarter and there were essentially two factors behind it. Firstly, as we mentioned in the opening remarks as well, volume came in lower in the Middle East, where volume declined around 28% due to the ongoing geopolitical conflict. The port, marine and offshore and construction business have all been affected in this region. Projects across Saudi Arabia have been delayed or stalled. The distributors in this region have also taken a conservative approach to stocking. All of these actually have led to a lower demand in this region. Our focus in this region was to maximize inquiry conversions sent through our value addition route and optimize product mix as much as possible to reduce overall impact on the top line and bottom line. The second factor was the Asia-Pacific region where we saw some project related delays during the quarter. Now, these are delays rather than any lost demand. The projects are still under negotiation and in the pipeline, but they will mature in this quarter. At the same time, to reduce our dependence on project-driven business, we have stepped up our customer engagement in the region and identified areas such as crane ropes and elevators where we see a clear headroom to build a more regular business to get regular volumes. This will be a key focus area for us through the year. Also in our other key geographies, America, Europe and India, we saw volume and value growth during the quarter and we expect the positive momentum to continue in the year as well.

Thank you. So next question, although the situation in the Middle East region is uncertain in the near term, If the geopolitical situation improves and reconstruction activities further pace, how significant could be the opportunity for Usha Martin and which of our products are best positioned to benefit from such a scenario?

Hello?

Yeah.

Yeah, can you hear me?

Yeah, yeah, we can.

Yes. So, yeah, just to, I'll just start again here. Actually, right, yes, the Middle East could represent a meaningful opportunity, you know, if and when these geopolitical conditions improve and, you know, the opportunity would be across the portfolio. So, Martin Gdr 144A for marine applications and even for our GP ropes as well. Thirdly, this region is also an important market, of course, for the oil and offshore. So that too should pick up and support the demand for our large diameter ropes as well as for our drill line ropes. And then beyond the rope side, even for some of these bridge and infrastructure projects which are currently getting delayed due to the situation this once things get better this should create opportunities even for plasticated LRTC projects in this market for us and for us being present with our own factory with our own reading shop in Saudi this should create an important advantage to capture these opportunities

okay and one last question is that we apart from wire rope we are looking for three other businesses one is classificative LRTC another is delphine wire and third is synthetic flame so how this all the three business are done in this quarter and how we foresee going forward in all these three divisions

Yes, you're absolutely right again that, you know, plasticated LRTC synthetic wires are also, you know, extremely important parts of the portfolio. And in each of these, we've made progress in the quarter. As we mentioned in the opening remarks, plasticated LRTC saw good traction this quarter. This records the highest volume and value for this segment this quarter. And that's also one of the reasons why we saw top-line growth in the LRTC segments despite seeing a volume decline year on year. We have started supplying LRTC-plasticated LRTC to the export market as well for the stable applications, which is an important development and with the upcoming approvals that we've been working on for a few years now, both the domestic and export markets will open up further. Coming to your second point on the synthetic string, which is you know our ocean fiber brand that is also very important part of our BSUK business so last year I believe was the first full year of commercial operations for this segment and you can see that you know over the last 5 quarters each quarter the revenue has been on an upward trend when it comes to this segment so from being a pilot project which is you know what it started off at this is now giving us consistent revenue consistent contributions And our goal is to see how we can take this from the 2 to 3 million GDP level that it is now to say a 10 million GDP level over the next few years. And being a high margin business, this will add significantly to our bottom line performance in the upcoming years as well. And what about Galfine Wealth? Galfine Wealth. Yeah, so on Galfine, which is under our brand name GALSTAR, which is our brand for aluminium zinc coated wire that's also progressing well we're seeing good demand in the domestic market in the export market also we've got approvals in place we are supplying to the European market for example and these again are critical applications right because they're used in work for protection so customer approvals are based on the performance reliability not just on price so Okay, thank you. This is from my side. Thank you. Thank you. Next question comes from the line of Rajesh Majumdar with 361 Capital. Please go ahead.

Yeah, good morning, Harish Ji, Shreya and Avijit. Actually, I wanted to ask you that if we look at the breakup of the volume numbers, wire rope segment is pretty fattish for the last three quarters. And though the realization per ton has improved steadily and has kept up the margins, the volumes have been quite static. When can we start seeing an uptick in the volumes? Because I understand that 1Q is normally a seasonally weak quarter as well.

and we have seen historically 2Q has been a very high volume bump up for the wire road business so shall we see a similar trend this year that was the first question so let me tell you that as we mentioned earlier the mid east market is the one which is impacting you know in the last quarter where we almost had a 26-30% lower volume which is almost 1000 tons so that is the business which we lost because of the current geopolitical situation however the other markets have done well whether it's the domestic market or the European and the US market so our we you know looking at the current opportunities globally including the domestic market we feel that we have an opportunity to We still maintain that we will be able to get to 10-12% growth of volume in this financial year. Now that the capacities are already in place and the inquiries are fairly strong, we should be able to get to our 10-12% growth in terms of volume for the whole year as we had indicated earlier. that means we will have like double digit growth balance part of the year because the first quarter is nearly static in terms of the volume number but also I would like to state at this point of time that while you know 10 to 12 percent volume growth is something which we we are quite hopeful and we should be able to achieve barring you know these situations that have been globally but at the same time as we have mentioned even in the past our focus has to be both on volume and value because you know wire rope you know there is it takes time for us to get all the approvals and get into these specialities customers and get the consistency and regular business from them so lot of progress has taken place on that the capacity is available with us as these inquiries and orders mature we should be in a position to push these volumes

Okay and sir if you look at the realization part and there is a sharp jump in NRPC which is of course understandable but then subsequently at the end of June we have seen a huge drop in the NRPC prices and so will that impact how much of the margin impact is there from NRPC this quarter and will that be negatively impacting next quarter if so will there be some positive impact coming from the corp side on the wire locally or other businesses to negate that impact? Yes sir.

As you see, margins, as we have maintained, we don't look at margins per ton. Of course, it's a derived number, which we sought a healthy number of 40,000. But our focus, as we have maintained earlier also, is to maintain a base of 20% now, based on all the various initiatives which the company has taken over a period of time. and we hope that even going forward we will have a minimum base of 20% we were able to pass on all the cost increase whether it was for the steel as Shreya mentioned in the opening remarks for steel as well as the gas and other input increase we were able to pass it on to the customers yes and that also helped us to ensure that the sustainability of margin was there going forward I think our base as we have been maintaining would be at 20% and as these various new CapEx volumes go up as well as the product mix improves, we should be able to see it moving upwards. So we are fairly positive that the new base would be at around 20%, minimum of 20%.

And sir, what would you guide for CAPEX for the next two years for our business?

You see, as we mentioned even earlier, this year we are investing about 250 to 300 crores. One of the main projects is increasing the capacity of elevator rope by almost 6,000 tons a year. So, that is and also modernizing and expanding our furnaces to be able to meet the increased demand. So, as we guided earlier, about 250 to 300 crores will be the capex, including routine capex or the maintenance capex on a yearly basis for us to be able to continue with a growth of, top line growth of 10 to 12% in terms of volume and around 15% on value. So, about 250 to 300 crores a year. Thank you, sir.

Thank you. Thank you. Our next question comes from the line of Varun Jain with Dallas Capital. Please go ahead.

Yeah, hi. Good morning, sir. So, I have a couple of questions. So, one is that OceanFiber became cash flow positive in its first year of operation. What is the total time which is here and what is the margin here? I know it's higher than 20%, higher than the plenty, but what are the margin profiles? And why is the margin so high? Like is there a IP advantage versus other, you know, synthetic flame manufacturers or what?

Yeah, thanks for your question. So, the total addressable market for this would be about 1.5 to 2 billion is, you know, what we estimated. So, it's smaller than the overall size, of course, of the rope market considerably, but is growing at a high double-digit rate. The margins, the gross margins for this are 65 to 70%. So, as you rightly mentioned, they are considerably high. And this, again, is a specialized product. It is a critical application. Again, it's used in oil and also in wind energy where, in a lot of cases, where steel wire rope cannot be used because the components of either the oil platform or the wind platform are more delicate and sensitive that is when these are used so these are heavy lifting applications a single last quarter we executed an order where the weight was only 6 tons of a particular synthetic sling but the lifting the minimum breaking load the lifting capacity is you know, more than 4,500 tons. So, that is, you know, the nature of the product. It is a highly specialized, again, physical application where you need approvals and you need track record to build the business. So, again, very much in line with our approach to having more value-added products in our portfolio. You know, this also fits well within that.

Okay, ma'am. And this plasticated LRTC in the Q4 call, mentioned and indicated that some approvals were expected within weeks so have those all those approvals come and will S527 volumes for this reach like 6,010 tons which was guided or will it be higher so for plasticated LRPC yes there was one major approval with one of the customers in the domestic it's a global customer but they have high share in the domestic market

verbally we have gotten confirmation on that but some paperwork is still getting a little bit delayed but it is all progressing well and it's in place and the parties have already started quoting with our product in the market so we still remain confident of that in terms of the volume yes we do have a capacity annually of 6000 tons last year we did close to 2500 tons this year our target is 2500 to 4000 tons and then next year we should be able to fully utilize the capacity as these approvals come through and with our traction that we are already seeing in the international market we are still confident of these numbers And then, you know, because this is an area where we have all of the capacity in place for, you know, the front end and only the classification line is the additional capex, we are already thinking about how we can further ahead of time increase our capacity so that, you know, in 18 to 24 months' time, as these projects pick up, we are still able to, you know, meet the demands of the market.

Got it, got it. and management always says that there is a 85% replacement market exposure so what is the replacement cycle for say mining, elevator, oil and how is it different like which has longer and which has lower and how sensitive are these replacement cycles to lower utilization so say if the business is disrupted in middle east so then the replacement cycle elongates or the replacement cycle stays the same

Good question. So, yes, you know, like you mentioned, 85% is the placement market for us. Across sectors, this could be different. So, for example, for certain mining ropes, you know, which are, for example, certain applications like dump ropes in mines, it can be as little as one to two weeks of the placement. But then across elevator ropes, It could, you know, it is longer. It can be 5 to 8 years depending on whether it's a commercial elevator or a residential elevator and how much it is used as well. So, and then, you know, course is somewhere in the middle, between 6, can be between 6 to 12 months. So, every application has sort of a different cycle. Now, coming to your question on the Middle East, right now the situation in the Middle East is that a lot of the ports are not even functional so they are not being used so to that extent the replacement cycles might get delayed a bit but I just want to highlight that these are safety mandated replacements so it's not that you know a rope breaks and then you replace it there is a certain timeline based on usage that the various sectors they have in mind and then they have to that they are not have in mind that they are mandated to replace it in and that's how the replacement happens. So, he has very good idea in terms of predictability of volume for this replacement demand.

Got it. Now, that's very helpful. And there's one last question if I can sneak in. So, Usha Martin, US market share is slightly below 5% and Europe is like close to 10 to 12%. So, over the next 3 to 5 years,

where do you see the market share in these geographies and also in India what is the present market share and where do you see it in the next 3-5 years so starting with the US so US yes our market share is sub 5% right now and if we look at today as a percentage of our total portfolio about 9-10% of our revenue comes from US or broadly the America's region so this is definitely an underpenetrated market for us relative to the overall size so we do see this as an important expansion opportunity for us going forward especially in certain value-added segments like elevators, mining and oil and gas also is an area that we are focusing now so definitely US is one of the important markets for us Europe of course having our own rigging shops our own service centres and having our own manufacturing as well gives us a big advantage. So that is a big market for us. After India, actually that is our largest market. So about 27% of our top line in this quarter came from the European market. In Europe, our strategy going forward will also be that, you know, we have our presence in UK, we have our presence in Netherlands. So those are well-established markets. But going forward, we still see headroom in markets like Germany, Italy, Denmark, Norway, around the North Sea area. Here our share is relatively smaller right now, so we see an opportunity to grow. So we will not see Europe as a whole, but we are looking at each of these geographies to see where we can gain share. And lastly, you asked about the India market. So of course, domestic market is very important to us. for our 65-70% market share we do have in the domestic market but again the way we look at it is segment wise so we talked about elevator roads where we do have about I would say 60-65% market share and there is a lot of room to grow but right now actually our biggest constraint is capacity the elevator market in India is growing at about 20% all the major OEMs are setting up presence here So once the additional capacity comes in we think that we can grow not only as the market grows but also take more shares which we are not able to cater to right now. Other segments in India we are looking at is another important segment here. We do have already more than 95% market share in India. So more focus is on retaining this market share and also as the market grows there is a lot of you know, port expansion that is happening in India. So, that is another area where they're actively working and having already credibility with having most of the shares, I think this will keep growing as the market grows. And, you know, other high-value sectors, piling, hoax mining, of course, you know, domestic markets in all segments, we have a strong dealer network. So, through them, we cater to most of the segments.

Got it, ma'am. Thank you, thank you and all the very best. Thank you.

Thank you. A nice question comes from the line of P.N. Sparkle with plus 91 AMC. Please go ahead.

Hi, good morning. Thank you for the opportunity, ma'am. I had a couple of questions. Could you please help me understand what are your sustainable EBITDA margins going forward? Because we have seen quite a good QOQ and ROI growth in those margins. And what would be a sustainable margin going ahead?

as I mentioned margins were moderated slightly on a sequential basis as we had mentioned that there could be a quarter on quarter variation in terms of margins in the 20 to 21% range due to the product segment and also in the geographic mix where we are selling our product our goal would be to maintain margins upward of 20% with focus to more whereas the focus on both absolute top line and bottom line growth so I would say the minimum would be 20% and as these various initiatives come up we expect it to move upward but again this would be depending on how the overall global situation you know evolves but we are reasonably confident that we should be now having a new base of 20% and gradually moving upwards.

And then for coming to the volume, what would be our volume growth going forward as well? And what is the utilization of our consolidated stock plans going currently?

As I mentioned earlier in my one of the answers that the target is to increase our, we still are reasonably confident to get to 10 to 12% volume growth this year and value growth of 15% depending on the product mix of course and that is something which we are reasonably confident even now to achieve this in the current year and with the various CAPEX program which we have in hand and the new capacities which have already been added and would be added We expect this volume growth to continue at a similar level in the coming years as well.

But sir, if you see our current YOYR volume, sale volume is flattish. It is flat. There has been very minimal change. So how do we expect to achieve a 10-12% volume guidance growth going forward?

And you see, as I mentioned earlier, and I think Shreya also mentioned in our opening remarks, that we had a 10-12%, you know, the Middle East, which is a very significant market for us, and we had set up our Saudi Arabian operations over there, which had started delivering good results. So, and we were expecting growth to come from that market this year. Instead of getting the growth, there is almost a 30% volume dip in that market. So, you know, these situations one has to deal with it. And, of course, we are all hoping that things will stabilize. But, on the other side, we grew by 12% in our volume in our markets in India. We grew in the US in terms of volume. We grew in the European market in terms of volume. And these new capacities which have come in and the kind of order book and the inquiries what we have, I would say that we are hopeful of still achieving these numbers with the kind of pipeline of inquiries and orders what we have. You see, but at the same time, one has to understand that we are present in so many geographical places in different parts of the world. Sometimes a war-like situation what happened in the Middle East does impact the overall business. But otherwise, I would say that looking at the current business environment becomes kind of order books and kind of enquiries, we are reasonably confident to achieve that.

So sir, what I am trying to, what I understand is that you think 10-10% would be inclusive of the Middle East operations resuming or excluding those operations?

Hopefully, yeah, I think it would be including the Middle East what we are seeing today unless it goes from into a work situation from here now. But if it is even at similar level, we should be able to do that.

Okay sir. So then my last question would be about realizations. What sort of realizations are we looking at for all the product mix that we have for this quarter? If you could help me.

The current realizations, you know, we have been able to pass on the Martin Gdr 144A Martin Gdr 144A Martin Gdr 144A Martin Gdr 144A Martin Gdr 144A However, on the LRTC side, we are seeing a slight depression in terms of the realization because of the ongoing monsoon and the project slowdown in this case. But otherwise, overall, we see a healthy, in terms of wire and wire growth, we see that we will be able to maintain a healthy realization of our products. slightly better than what we did in the quarter.

Sir, could you know the quantum number for the realisation for the products that we have or the blanket realisation what we have achieved this quarter?

Can you come again?

Sir, I was asking about the quantum number of the realisation.

Yeah, so for wires, it would be around the 85,000 rupees per ton range the realization for LRPC because the large part was also plasticated LRPC this time the blended margin for black and plasticated together was about 79,000 rupees per ton and rope in the domestic market was around 1,90,000 rupees per ton and internationally for you know with more growth in Europe and the US and value added services the realizations were one of the highest we see around Rs 3,70,000-3,80,000.

So ma'am, the Rs 3,70,000 and Rs 3,80,000, these are made of sustainable margin or this is just due to the war and there is an increase in the realization?

These are depending on the product. We are selling products of ocean max which are sold at a different price. Then there are GP ropes in international which are at a different price. Drill 9 groups are sold at a different price. And you know these also depend on quarter by quarter. So what Shreya mentioned that those are the numbers which we are targeting and hopefully we should be able to do. But that also depends on maturity of some of these orders what we get in a particular quarter and how the mix is. But in general because you know we operate in so many geographies, so many product mix. So it's difficult to say that what exact number would be but it would be what Shreya mentioned in a range which she mentioned that we would be around that range.

Okay sir. And so just to get an overview of the industry itself as of right now, you know West Asia crisis and everything else, what are your views about how to come back to your business and would it be detrimental in the long run or would it be beneficial for you?

West Asia crisis is already impacting our top line as of now but assuming that this West Asia crisis is resolved will create a big opportunity in terms of certain demand coming up for reconstruction for you know the various activities of oil, gas will improve in that market and also the reconstruction activities may happen so but of course it's all very uncertain as all of us we know that daily things are changing and if things do improve it should definitely have a positive impact on our business going forward.

And sir what's the current market share in India? If you could just shed some light.

We don't you know look at the market share of individual markets on a on that basis but I think our as a part of our top line we are about nine percent of our revenue comes from the of our revenue comes from the Navy okay thank you sir thank you next question comes from the line of Srikumar Pejapati with Niraya Settler please go ahead

Hi, thanks for the opportunity. So my first question would be is there any new customer addition to our list and if any of our products are nearing the approval process and what kind of contribution we can expect from profitability as well as from top line perspective for the next 4 to 6 quarters.

You see these are continuous, you know we have a continuous line, we have a continuous pipeline of new customer approvals which is on an ongoing basis for all our various clients, be it in the elevator, be it in the oil offshore, be it in the train industry. So, you know, these are all products which take six, you know, sometimes to get the approval could be a few quarters or even two to three years. So there is a ongoing approval process be it for our plasticated LRTC, be it for our zinc aluminium which is our Galstar wires, even for our ocean fiber business. So it's a continuous process and I'm happy to say that every quarter we are getting new approvals or new customers which we are targeting with the help of our global development center, global design center and I would say that and you know we prefer not to talk about the name of these customers because we have a confidentiality agreement with them also not to share the numbers but I can tell you that on an average at least 10 to 12 new customers we keep on adding you know every few months so across the various segments so there is a very healthy pipeline of these customer approvals and new customers which we are targeting

got it sir and my next question is on this UM cables basically basically Usha Martin cables so that division is not doing well as plus this Thailand segment is also path negative so is there any turnaround or any new strategy in order to make this segment profitable going ahead as far as UM cable is concerned this is not part of our core business

of course we are running it trying to run it with because that's a business which is not core and we do not have any major strength in that business so we are looking at opportunities of how to use our that facility which is strategically located in west India western part of India where the company does not have any other facility to see that is there any opportunity which we can and we are evaluating few opportunities where we could use that facility to grow our value-added wire and wire-row business. So that is definitely one of the options in front of us. Coming to, but long term, on the cable side, we don't see that as a business which we would like to be. Coming to the business of Thailand, it's a strategically located plant, a very important plant, having a very strong customer base in that region. in the ASEAN region and one of the leading players in Thailand. Of course, the margins in the previous quarter, first quarter have improved and the outlook for the current year is better in Thailand in terms of the order book and all. But we are looking at a strategic model how Thailand can become more profitable would be able to get better realizations and better margins by enhancing the product mix and I would think the next 6 months we would be in a position to have a fairly you know well well evolved plan for this which should create a long term improved profitability coming from our Thailand plant one of the options we are even looking at how do we integrate it better with our plant in India similar to what we have in Dubai and similar to what we have in the UK and see that how we can you know get this energy benefits and help improve the profitability so that is something it's a good question both of these are in top of our mind and we would be addressing it in the coming in the coming two or three quarters

Sure sir, and sir next is on this CBAM, so currently we have very negligible impact but post F.28 we might see some impact on our products or say the region to which we cater. So what kind of headwinds or issues we can see post F.28 and what sort of mitigation strategy are we adopting today?

Yeah, that's a good question. So, of course, you know, that's top of our mind as well. As of now, in the definitive period, we are only exposed to one product, one product segment, which is wires, which comes under 7217. So, we do export that to Europe as well. So, that is already under the definitive period, under C-BANs. Martin Gdr 144A as well on that to see you know what strategy we can have jointly. In terms of the wire rope which comes under 7312 that is not in the definitive period right now because of course that is a more complex derivative of steel that becomes like you said in FY28 but you know through the exercise for wires right now we are also trying to understand what the cost impact pattern would be for wire rope it would not be that much more because it is just like value addition, you know, beyond buyers from an energy consumption perspective. Large part of the cost is, you know, because of the impact of the input cost for us, the input material for our team. From our processes, it is, you know, negligible, you know, for the emissions compared to, you know, what it is for the input materials. so we are working with our suppliers as well to see what are the options available to us so that we can minimize that overall impact when it hits us in F528

A couple of questions so last quarter we highlighted that we are facing some fuel challenges like fuel costs are increasing somehow we are able to manage it well so far but given this West Asia crisis I mean it is not yet stable that we desire So, going ahead in the second half, can we see any impact on our operating profitability?

It's a good question. We as we mentioned, we have been able to pass on the increase whatever has taken place into the market and of course the West Asia crisis has bring in It brought in volatility in the oil and gas prices globally but we have been able to successfully pass it on to the customers and very concurrently we talk to our customers and hopefully we are in a position to pass it on in the future and we don't see any impact coming on that account to our business.

Great sir and last question referring to the annual report 26 on lighter note I see a jump of 4X in Mr. Rajiv's renovation so any comments you would like to add?

Yeah just let me it's not correct if you look at it because year before last when we were going for a major restructuring for our business in our group whether it's the European business and major crop initiatives which we have taken I had foregone my bonus for the year 24-25 so that was for one particular year I had taken a view that because we had taken some very serious austerity measures across the company so that was an approximate value was approximately 8 crores which was applicable, but on my own I decided to forego it. So, to that extent, it's an anomaly for a particular year, if you look at it.

Got it, sir. Thank you so much and best of luck.

Thank you. Next question comes from the line of Sharda Kapadia with SMIFS Limited. Please go ahead.

Hello, I'm an auditor. Thank you for the opportunity. So first I would like to congratulate the team for this great number. And my first question is, first we take a look that field prices have increased millions to be during the quarter around 13% QOQ. But then EBITDA per ton has improved by only approximately 3% QOQ. Additionally, the EBITDA margins contracted sequentially despite a lower contribution from the plasticated LRTC business. So, if you could just help us understand the key factors which limited the EBITDA per metric expansion. So, is it because of the timing mismatch in the raw material pass-through or the product exchange or the host headwinds?

So, as you can, you know, as you said, the EBITDA per ton, you know, was at 40,000 rupees per ton level. Even after the input costs increased, we were able to pass on the input costs and then further, you know, still improve our product mix as well as manage our costs, you know, on a year-on-year basis to get these overall margins. When it comes to the sequential decline in the margins percentage, you know like we said you know quarter on quarter even you know seasonality of Q4 versus Q1 there can be a certain difference in the geographic as well as the product mix so I would not you know I would not say that you know quarter and quarter it cannot change it will vary to some extent but as we mentioned that the goal would be to get you know to have a minimum of 20% EBITDA margins and as the product mix

further improves that should only get better basic question sorry the basic question is that the steel prices have increased by approximately 13% QOQ but our margin per ton basis has increased by 3% QOQ so any major reasons for that basically you see in the desert the steel price

has gone up by 7000 rupees per ton. So our finished products we have been able to recover that steel price increase. So you cannot make these and the price of steel is 50,000 rupees per ton or say 55,000 rupees per ton. So 13% increase of steel price amounts to 7000 rupees. But wire rope is sold at 180,000 rupees to 350,000 rupees. So you cannot take the percentage of steel price increase of 13% to increase the price of your finished product by 13% of the wire rope which is sold so basically when we talk to customer we are saying that so it is the percentage of steel absolute steel increase which we are able to perform so the margins don't increase the you know you cannot increase the sale price of the 7% sale price increase so we must have a 13% sale price increase so we must get 13% on virus it doesn't work that in any of the products it's the basic input price which we are able to recover it

Okay, okay, okay. Also sir, would it be possible to just give a basic, you know, understanding as to how much of the increase which we get from the realization is from the commodity pass-through or due to the richer product mix? Just the percentage would... Yeah, sure.

No, no, just the percentage. It is the absolute number of sale price. So, whatever the sale price increase had taken place, we pass on 100% in the commodity product there is no absorption of any cost so it is a 100% pass through whether it is wire or LRPC in terms of the wire work it is purely the steel price increase and the gas and other inputs work increase we are able to recover from the customer so commodity is 100% pass through

okay okay that was quite helpful sure thank you thank you thank you this is the last question ladies and gentlemen for today I now hand the conference over to the management for the closing comments thank you I am now voting the team I would like to thank everyone for attending this call and showing interest in Inha 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 to 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 ma'am. Ladies and gentlemen, on behalf of Usha Martin Limited, that concludes today's conference call. Thank you for joining us and we will now disconnect your lines.