This smallcap stock is a leading Indian multinational company specializing in the production of steel and wire ropes. Over the years, it has become one of the world’s largest wire rope manufacturers, catering to industries such as oil and gas, mining, construction, and infrastructure.
With a market capitalization of Rs.10,837 crore, the share price of Usha Martin Limited opened at Rs.356.5 per share on Monday, rising 0.5 percent from its previous close before closing at Rs.354.75 per share.
Usha Martin, which began as a small wire rope manufacturing unit, has experienced significant growth over the years, diversifying its product portfolio to include specialty steel and other steel products, while advancing its technological capabilities and manufacturing processes.
The company is now strategically focusing on high-end, value-added products such as crane ropes and oil and offshore ropes, aligning with its objective to improve its product mix and drive profitability through specialized offerings.
Expansion Plans
Usha Martin Limited has announced plans to invest Rs.1,200 crore (approximately USD 270 million) to enhance its power and mining facilities in Jharkhand, to increase its overall production capacity to 1 MTPA (million tonnes per annum).
Also Read: Stocks to Buy: 5 Stocks to buy for an upside of 45%
UML has completed a Rs.3.1 billion modernization and capacity expansion project at its primary facility in Ranchi, enhancing its wire rope manufacturing capacity by approximately 2,000 tons per month (TPM). This expansion is anticipated to add around 15,000 tons of saleable volume in FY25.
After the initial phase, UML plans to invest an additional Rs.1.6 billion to further enhance capacity at the Ranchi plant. This phase will concentrate on increasing the production of wire and strands, as well as plasticated Low Relaxation Pre-stressed Concrete (LRPC) ropes, which are high-margin products for specialized construction projects.
Global Footprint
The company is also expanding its operations in Thailand, raising its wire rope production capacity from 19,000 tons per annum (tpa) to 22,000 tpa, with an investment of approximately Rs.600 million. This facility is anticipated to become operational within the next 12 to 18 months.
The company’s geographical revenue mix is comprised of 44 percent from India, 25 percent from Europe, 13 percent from the Asia Pacific region, 8 percent from the Middle East and Africa, and 10 percent from America.
Financials
In its latest financial update, the company reported a revenue of Rs.826.37 crore in Q1 FY25, rising nearly 1.5 percent from Rs.814.38 crore in Q1 FY24. Similarly, the company’s net profit increased to Rs.103.84 crore from Rs.100.76 crore during the same period, showing a growth of 3 percent.
Ratio Analysis
In terms of return ratios, return on capital employed (ROCE) currently stands at 22.1 percent and return on equity (ROE) stands at 19.2 percent. The company has a low debt-to-equity ratio of 0.15 and a high current ratio of 2.9. Price-to-earnings (P/E) ratio of the company 25.1 is currently below the industry average of 28.2.
Future Outlook
Usha Martin Limited is well-positioned for future growth, fueled by rising global demand for wire ropes and specialty steel products, as well as its dedication to innovation and sustainability. The company’s strategic emphasis on expanding its international footprint and adopting digital transformation will improve operational efficiency and broaden its market reach.
Also Read: Auto ancillary stock which holds 50% market share in braking system to keep a watch on
Written by – Siddesh S Raskar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
