Usha Martin cuts LRPC target, recasts capex without explanation
Q1 revenue rose 16.4% and EBITDA margin hit 20.1%, but management slashed its plasticated LRPC volume target by a third and recast its two-year capex plan into a single-year spend — shifts it did not explain.
What's new
- Consolidated revenue grew 16.4% YoY to ₹1,033 cr; EBITDA rose 44% to ₹208 cr, margin 20.1%.
- Value-added wire rope mix reached 73% vs 70% in FY26; EBITDA per tonne hit ₹40,581.
- Plasticated LRPC recorded its first international stay-cable order, though the volume target was cut.
- Ocean Fiber turned cash-flow positive in its first full commercial year.
Themes from the call
Demand
Wire rope value grew 18% despite marginally lower volume; India, US, Europe strong; Middle East volume fell 28% but pricing kept revenue flat.
Margins
EBITDA margin expanded to 20.1% from ~16% a year ago, driven by richer mix and pricing despite wire rod and zinc inflation.
Capital allocation
Q1 capex ₹73 cr; FY27 guidance ₹250-300 cr (vs earlier two-year ₹300 cr plan). Elevator rope capacity expansion of 6,000 tpa on track; net cash ₹465 cr.
Guidance watch
- Consolidated EBITDA margin of at least 20% going forward, with quarterly range 20-21%.
- Plasticated LRPC FY27 target 3,500-4,000 tons vs 6,000-ton capacity; full utilization expected next year.
- Wire rope volume growth 10-12%, value growth ~15% in FY27; similar growth expected in coming years.
- Elevator rope capacity commissioning begins Oct 2026, completed by Q1 FY28.
Risk flags
- Plasticated LRPC target cut by a third without clear reconciliation; paperwork delays may persist.
- Capex plan recast from two-year ₹300 cr to one-year ₹250-300 cr implies higher spending intensity and execution risk.
- Middle East disruption continued; Asia-Pacific project delays may not convert as expected.
Key quotes
-
"We are fairly positive that the new base will be at a minimum of 20%."
— Rajiv Jhaver, Management -
"We expect this year to do ... the plasticated LRPC of close to 5,000 to 6,000 tons as the approvals convert into orders."
— Management, Apr 2026 call -
"Last year, we did close to 2,500 tons. This year, our target is 3,500-4,000 tons."
— Management, Jul 2026 call
The brief
Usha Martin delivered a strong Q1 — revenue up 16.4%, EBITDA margin 20.1%, PAT up 41%. The value-led strategy is working: richer product mix, pricing power, and early wins in plasticated LRPC and Ocean Fiber. But the call was also marked by two guidance shifts that went unexplained.
Six months ago, management expected FY27 plasticated LRPC volumes of 5,000-6,000 tons. This quarter, the target was cut by a third to 3,500-4,000 tons. The company cited delayed approval paperwork but did not reconcile the lower forecast with the earlier confidence. Separately, the April 2026 call described capex of 'close to ₹300 crore over two years.' Now that same ₹250-300 crore is budgeted for FY27 alone, implying a materially higher annual pace. No bridge was offered.
The operational numbers are strong. Wire rope value grew 18% on better mix, Middle East disruption was contained through pricing, and Ocean Fiber turned cash-flow positive. The balance sheet is clean — net cash of ₹465 crore, ROCE at 21.4%. But the credibility of forward guidance is now in question. When management says it expects 20% margins going forward, that is easier to underwrite if the underlying volume and capex roadmaps are reliable.
The quarter shows Usha Martin executing well. The question is whether it can guide consistently too.
Usha Martin's Q1 numbers are strong, but two unexplained guidance shifts make the forward view harder to trust.