Usha Martin (517146) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue from operations rose 1.5% YoY to Rs. 826.4 crore, with operating EBITDA up 5.7% to Rs. 154.0 crore and margin improving to 18.6%, despite macroeconomic and geopolitical challenges.

• Wire rope and wire segments posted strong YoY growth, offsetting a decline in LRPC; value-added products now comprise 54% of revenue, and international business contributed 56% of total revenue.

• CapEx initiatives underway to expand capacity and value-added product offerings, including plasticated LRPC products and synthetic slings.

• Robust business pipeline in both domestic and international markets, with strong demand drivers in infrastructure, oil, offshore, and wind energy sectors.

• Board approved unaudited financial results for Q1 FY25 and introduced Employee Stock Option Plan 2024.

Financial highlights

• Consolidated net revenue from operations at INR 826 crore in Q1 FY25, up 1.5% YoY; net profit for the quarter at INR 104 crore, a 3.1% increase YoY.

• Operating EBITDA at INR 154 crore, up from INR 146 crore YoY; EBITDA margin improved to 18.6% from 17.9% YoY.

• Net debt reduced to INR 73 crore as of June 2024, down from INR 124 crore in March 2024; net debt to equity improved to 0.03x.

• Standalone revenue for Q1 FY25 was Rs 51,411 lakhs, with net profit after tax at Rs 6,886 lakhs.

• Basic and diluted EPS for Q1 FY25 stood at Rs 3.42 (consolidated) and Rs 2.26 (standalone).

Outlook and guidance

• Expecting a 10% volume increase in rope and wire segments for FY25, with focus on value-led growth and ramp-up of value-added product lines.

• LRPC segment to focus on value-added products (plasticated and galvanized) rather than volume.

• CapEx ramp-up expected to enhance performance in the latter part of the year; LRPC volumes targeted to reach 500 tons/month by Q4.

• Management confirmed ongoing operations are unaffected by legal proceedings and expressed confidence in the company's legal position.