Usha Martin Limited has informed the Exchange about Investor Presentation
Date: 5th August 2023
The Manager National Stock Exchange of India Ltd Exchange Plaza, 5th Floor, Plot No.C/1, G Block, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051 [Scrip Code: USHAMART]
The Secretary BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street Mumbai – 400 001 [Scrip Code: 517146]
Societe de la Bourse de Luxembourg 35A Bouleverd Joseph II L-1840, Luxembourg [Scrip Code: US9173002042]
Dear Sirs,
Sub : Earning Presentation- Q1 FY24
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), please find enclosed an Earning presentation for Q1 FY 2023-24 of the Company on the un-audited Financial Results of the Company for the quarter ended 30th June 2023.
The presentation is also being hosted on the website of the Company i.e. www.ushamartin.com
You are requested to take the same on record.
Yours sincerely, For Usha Martin Limited
Shampa Ghosh Ray Company Secretary
Encl: as above
Specialty Wire Rope Solutions Provider
Q1 FY24 Earnings Presentation
August 5, 2023
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Usha Martin Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this presentation may contains certain forward looking statements concerning the Company’s future business prospects and business profitability. Such forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties that are difficult to predict. These risks and uncertainties include, but are not limited to, the Company’s ability to manage growth, the fluctuations in earnings, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, the Company’s ability to manage its international operations, Government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.
2
Company Overview
3
Leading global and India’s no.1 specialty steel wire rope solutions provider
Rich Legacy Of
~60
years
6
Manufacturing Facilities
Offering wide range of:
▪ Specialty wire ropes
▪ High-quality wires
▪ Low relaxation prestressed concrete
steel strand (LRPC)
▪ Bespoke end-fitments, accessories and
related services
Presence across
6
Continents
~3,100
Worldwide Employees
30+
Distribution Centers
Rs. 3,268 crore
Consolidated Revenue
Note: As on 31st March 2023
4
21.2%
Consolidated ROCE
Rs. 351crore
Consolidated PAT
We are undergoing a strategic transformation and are poised for growth
Turnaround
Consolidation
Growth
• Divestment of steel business
resulting in:
• Sharp deleveraging • Reshaped balance sheet
• Renewed focus on specialty
wire rope business • Strategic initiatives to consolidate leadership
Net debt to equity improved to 0.4x in FY20 from 4.3x in FY19
Significant earnings turnaround: PBT improved to Rs. 346 crore in FY22 from Rs. 149 crore2 in FY20
• Value accretive capex • Enhance specialty offerings across industry segments
• Increase geographical spread in
strategic markets
• Drive sustainable growth
Target to achieve topline CAGR of ~15% & Operating EBITDA margins ~18% over the next 2- 3 years
Note 1: All figures mentioned in the slide are consolidated financials
Note 2: PBT from continuing operations
5
Multi-faceted growth strategy continue to drive our performance
Capex initiatives focused on value-migration
Expand international market share through overseas subsidiaries
Remain financially prudent
Strong focus on digital initiatives
6
Our vision echoes our long-term growth agenda
To be the global leader in the wire rope industry by delivering customer delight, adopting modern technology and ensuring sustainable growth for all of its stakeholders
7
Q1FY24 Results Overview
Key Financial Highlights – Consolidated Q1FY24
Net Revenue from operations
759
855
814
In Rs. crore
Operating EBITDA
15.5%
117
18.0%
154
Margins 17.9%
146
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 4.8%
YoY: 7.3%
Shift (%)
QoQ: 5.4%
YoY: 24.2%
PBT Margins
16.6%
142
15.9%
129
13.6%
103
PAT Margins
10.8%
12.3%
12.4%
82
105
101
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 9.2%
YoY: 25%
Shift (%)
QoQ: 4.3%
YoY: 22.5%
Note 1: All figures mentioned in the slide are consolidated financials
Note 2: Operating EBITDA & EBITDA Margins calculated without other income
9
Segmental Revenue Overview
Wire Rope
598
553
481
In Rs. crore
Wire & Strand
86
79
65
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 7.4%
YoY: 15.0%
Shift (%)
QoQ: 17.8%
YoY: 23.9%
LRPC
148
105
116
▪ Segment wise contribution to overall sales Q1FY24 :
Wire Rope – 68% (PFY 67%); Wire & Strand – 8% (PFY 10%); LRPC – 14% (PFY 15%)
▪ Increase in YoY rope sales in line with the company’s
strategy to focus on value added products
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 10.6%
YoY: 21.6%
Note 1: All figures mentioned in the slide are consolidated financials
PFY – Previous Financial Year
10
Key Operational Highlights – Consolidated Q1FY24
Sales Volumes1 (‘000 MT) 47
47
44
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 5.9%
YoY: 5.0%
Wire Rope Sales Volumes (‘000 MT)
21
25
23
▪ Marginal decrease in overall volumes during Q1FY24
▪ Segment wise contribution to overall volumes
Q1FY24 :Wire Rope – 52% (PFY 49%); Wire & Strand – 16% (PFY 19%); LRPC – 32% (PFY 32%)
▪ Increase in YoY rope volumes and marginal decrease in wire and LRPC volumes in line with the company’s strategy to focus on value added products
Wire & Strand Sales Volumes (‘000 MT) 9
9
7
LRPC Sales Volumes (‘000 MT)
17
14
14
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 8.4%
YoY: 8.2%
QoQ: 14.6%
YoY: 18.6%
QoQ: 4.3%
YoY: 14.4%
Note 1: For all product segments Note 2: All figures mentioned in the slide are consolidated volumes PFY – Previous Financial Year
11
Diversified presence across geographies and segments
Product
Others, 10%
Wire & Strand, 8%
LRPC, 14%
Wire Rope, 68%
Revenue Segmentation for Q1FY24
End Industry1
Fishing, 2% Others, 4%
Mining, 6%
Engineering, 20%
Geography1
America, 7%
Middle East & Africa, 11%
Utilities, 5%
Elevator, 7%
Auto, 6%
Crane, 13%
Construction & Infrastructure, 15%
Asia Pacific, 14%
India, 44%
Oil & Offshore, 22%
Europe, 24%
▪ Wire rope segments contribution to overall revenues increased to 68% in Q1FY24 vs. 67% in FY23
o Within Wire rope, the value-added segments (crane, oil & offshore, elevator, mining, fishing) share rose to 71% in
Q1FY24 from 65% in FY23
▪ Share of International business stood higher at 56% in Q1FY24 as against 55% in FY23
Note 1: For all product segments
Note 2: All figures mentioned in the slide are consolidated financials
12
Profitability indicators remain strong
ROCE (%)
19.2%
21.2%
22.7%
ROE (%)
18.8%
18.8%
20.6%
12.8%
11.3%
FY21
FY22
FY23
Jun'23*
FY21
FY22
FY23
Jun'23*
Interest Coverage (x)
Fixed Asset Turnover (x)
24.4
16.0
3.2
3.4
3.3
2.4
9.2
4.3
FY21
FY22
FY23
Jun'23
FY21
FY22
FY23
Jun'23^
Note 1: All figures mentioned in the slide are consolidated financials
* Annualized
^ LTM
13
Discussion on Financial and Operational Performance
Net Revenues
▪ Revenue from operations increased by 7.3% Y-o-Y to Rs. 814.4 crore in Q1FY24
o Despite a Y-o-Y decline in raw material prices, the Company reported an increase in revenues due to enhanced realizations resulting
from value-added and solution-based offerings
o Furthermore, the Company's Q1FY24 topline performance was also driven by its International operations, which registered a notable
13% Y-o-Y increase in revenue
EBITDA
▪ Q1FY24 Operating EBITDA stood at Rs. 145.7 crore as against Rs. 117.3 crore, higher by 24.2% on a Y-o-Y basis
▪ During the quarter, the Operating EBITDA margin was recorded at 17.9%, reflecting an increase from 15.5% in Q1FY23
▪ Considering Other Income, the EBITDA margins for Q1FY24 stood at 18.3%, compared to 16.4% in Q1FY23
o The Company's emphasis on value-added products, along with the expansion of its International presence, has effectively led to an
improvement in margin performance
PBT & PAT
▪
▪
In Q1FY24, the PBT amounted to Rs. 129.1 crore, registering a 25.0% Y-o-Y increase from Rs. 103.3 crore
In Q1FY24, the PAT amounted to Rs. 100.8 crore, registering a 22.5% Y-o-Y increase from Rs. 82.2 crore
▪ Basic EPS stood at Rs. 3.31 for the quarter as against Rs. 2.69 Y-o-Y
Note 1: All figures mentioned in the slide are consolidated financials
14
Successfully Managing Raw-Material Volatility
56,317
44,112
Steel Price (Rs. per tonne)
65,530
63,590
59,302
58,040
61,691
59,210
FY21
FY22
Q1FY23
Q2FY23
Q3FY23
Q4FY23
FY23
Q1FY24
EBITDA/tonne2 (Rs.)
25,608
22,965
25,526
32,063
32,227
26,473
15,880
19,624
FY21
FY22
Q1FY23
Q2FY23
Q3FY23
Q4FY23
FY23
Q1FY24
Note 1: All figures mentioned in the slide are consolidated financials Note 2: EBITDA calculated without other income & excluding UM Cables
15
PBT Bridge: Q1FY24
In Rs. crore
▪ Sales Realizations:
Improvement
in product portfolio and higher realizations from solution sales overall improvement
contributed
Europe
to
in
▪ Sales Volume: Increase due to higher sales in Europe YoY and decline in wire rope sales QoQ
▪ Consumption: Increase due to higher volumes in Europe YoY and decline in wire rod consumption rate QoQ
Note 1: All figures mentioned in the slide are consolidated financials
16
142 129 10 -51 23 5 Q4 FY23 PBTSales RealizationsSales VolumeConsumptionOthersQ1 FY24 PBT103 129 17 38 -17 -12 Q1 FY23 PBTSales RealizationsSales VolumeConsumptionOthersQ1 FY24 PBT Balance Sheet remains significantly de-risked Significant reduction in net debt despite capex spend of ~Rs. 68 crore
In Rs. crore
Gross Debt
461
355
347
322
Net Debt
342
191
185
99
FY21
FY22
FY23
Jun'23
FY21
FY22
FY23
Jun'23
Gross Debt to Equity (x)
Net Debt to Equity (x)
0.33
0.24
0.21
0.17
0.15
0.11
0.09
0.05
FY21
FY22
FY23
Jun'23
FY21
FY22
FY23
Jun'23
Note 1: All figures mentioned in the slide are consolidated financials
17
NWC to turnover steady through active rationalization of inventory Continuous focus on optimizing working capital to reduce cash conversion cycle
Current Ratio (x)
Net Working Capital (Rs. Crore)
2.2
1.7
2.5
2.6
874
674
1,028
992
Mar-21
Mar-22
Mar-23
Jun-23
Mar-21
Mar-22
Mar-23
Jun-23
Net Working Capital to Turnover (LTM, %)
30.2%
28.8%
29.1%
30.2%
Note 1: All figures mentioned in the slide are consolidated financials
18
Mar-21
Mar-22
Mar-23
Jun-23
Management Comment
Commenting on the performance Mr. Tapas Gangopadhyay, Non-Executive Director said:
“We are delighted to report a strong year-on-year growth in EBITDA and profitability for Q1FY24. During the quarter, our Operating EBITDA increased by 24.2%, with EBITDA margins showing a notable year-on- year increase of 2.4 pps to 17.9%. This significant margin performance is attributed to our strong focus on value-added products and the expansion of our International operations, which contributed 56% to our Q1FY24 revenue.
Our engagement with International customers for high-end wire ropes remained robust, underscoring the criticality of these products in various end-user industries. We have full confidence in the capabilities of our R&D team to develop suitable solutions, collaborating continuously with our customers.
Mr. Tapas Gangopadhyay Non-Executive Director
Our capex initiatives are progressing smoothly. The increased capacities will predominantly cater to a including mining ropes, non-rotating diverse array of critical applications and value-added products, is on-track and is ropes, compacted ropes and plasticated ropes. Our wave1 expansion at Ranchi expected to be completed by end of Q3, supporting our revenue growth endeavours.
Moving forward, Usha Martin is focused on consolidating its position as one of the world's largest providers of specialty wire rope, while actively pursuing market share expansion. With six decades of invaluable experience in the industry, we are poised to leverage our expertise to offer unparalleled solutions. Through continuous investments in R&D and modernization, we are committed to providing cutting-edge solutions that cater to the evolving needs of our esteemed customers worldwide. Our vision is to strengthen our foothold in the industry and set new benchmarks for innovation and customer satisfaction."
19
Annexure
20
Abridged Consolidated P&L Statement
Revenue from Operations
Operating EBITDA
Operating EBITDA Margin (%)
Operating EBITDA / ton^ (Rs.)
Other Income
EBITDA
EBITDA Margin (%)
Depreciation
Finance Costs
Share of profit(-) /loss(+) of joint ventures
PBT
PBT Margin (%)
Tax
PAT
PAT Margin (%)
Basic EPS (in Rs.)
Q1FY24
Q1FY23
Y-o-Y Change (%)
Q4FY23
Q-o-Q Change (%)
In Rs. crore
814.4
145.7
17.9%
32,227
3.6
149.3
18.3%
17.6
5.5
-3.0
129.1
15.9%
28.3
100.8
12.4%
3.31*
758.7
117.3
15.5%
25,608
6.7
124.1
16.4%
16.5
7.2
-3.0
103.3
13.6%
21.1
82.2
10.8%
2.69*
7.3%
24.2%
2.4 pps
25.8%
-46.4%
20.3%
2 pps
6.6%
-23.0%
-0.7%
25.0%
2.2 pps
34.5%
22.5%
1.5 pps
23.0%
855.2
154.0
18.0%
32,063
11.3
165.3
19.3%
17.2
8.0
-2.1
142.3
16.6%
36.9
105.3
12.3%
3.46*
-4.8%
-5.4%
-0.1 pps
0.5%
-68.2%
-9.7%
-1 pps
2.7%
-30.6%
-44.2%
-9.2%
-0.8 pps
-23.3%
-4.3%
0.1 pps
-4.4%
^ Excluding UM Cables *EPS is not annualized
21
Abridged Standalone P&L Statement
Revenue from Operations
Operating EBITDA
Operating EBITDA Margin (%)
Operating EBITDA / ton (Rs.)
Other Income^
EBITDA
EBITDA Margin (%)
Depreciation
Finance Costs
PBT
PBT Margin (%)
Tax
PAT
PAT Margin (%)
Basic EPS (in Rs.)
Q1FY24
Q1FY23
Y-o-Y Change (%)
Q4FY23
Q-o-Q Change (%)
In Rs. crore
500.6
91.1
18.2%
24,084
17.3
108.4
21.7%
7.0
1.2
100.2
20.0%
21.8
78.4
15.7%
2.57*
515.6
70.7
13.7%
17,929
11.5
82.2
15.9%
6.7
4.1
71.4
13.9%
17.8
53.7
10.4%
1.76*
-2.9%
28.9%
4.5 pps
34.3%
50.5%
31.9%
5.7 pps
4.0%
-69.8%
40.3%
6.2 pps
22.7%
46.1%
5.3 pps
46.1%
511.2
83.5
16.3%
21,277
11.7
95.2
18.6%
6.5
3.7
85.0
16.6%
21.9
63.1
12.3%
2.07*
-2.1%
9.1%
1.9 pps
13.2%
48.0%
13.9%
3 pps
6.6%
-66.4%
17.9%
3.4 pps
-0.5%
24.3%
3.3 pps
24.3%
^ Other income includes dividend income of Rs. 13.2 cr in Q1FY24 and Rs. 3.6 cr in Q1FY23
*EPS is not annualized
22
Key Financial Highlights – Standalone Q1FY24
Net Revenue from operations
Domestic
Export
516
180
336
511
173
338
501
177
324
Operating EBITDA
Margins
In Rs. crore
13.7%
71
16.3%
84
18.2%
91
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 2.1%
YoY : 2.9%
QoQ: 9.1%
YoY: 28.9%
PBT
Margins
PAT Margins
13.9%
71
16.6%
85
20.0%
100
10.4%
54
12.3%
63
15.7%
78
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 17.9%
YoY : 40.3%
Q1 FY23
Q4 FY23
Q1 FY24
QoQ: 24.3%
YoY: 46.1%
Note 1: All figures mentioned in the slide are standalone financials
Note 3: PBT includes dividend income of Rs. 13.2 cr in Q1FY24 and Rs. 3.6 cr in Q1FY23
Note 2: Operating EBITDA & EBITDA Margins calculated without other income
23
Key Operational Highlights – Standalone Q1FY24
Sales Volumes1(‘000 MT)
Domestic
Export
40
10
29
39
10
29
38
10
28
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 3.6%
YoY: 4.1%
▪ Marginal decrease in overall volumes during Q1FY24
▪ Segment wise contribution to overall volumes Q1FY24 : Wire Rope – 45% (PFY 43%); Wire & Strand – 18% (PFY 19%); LRPC – 37% (PFY 38%)
▪ Increase in YoY rope volumes and marginal decrease in LRPC
volumes in line with the company’s strategy to focus on international markets, value added products
Wire Rope Sales Volumes (‘000 MT)
Domestic
Export
16
9
7
18
8
10
17
9
8
Wire & Strand Sales Volumes (‘000 MT)
Domestic
Export
7
1
6
8
2
6
7
2
5
LRPC Sales Volumes (‘000 MT)
Domestic
Export
17
16
14
13
14
14
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q4 FY23
Q1 FY24
Shift (%)
QoQ: 4.4%
YoY: 4.5%
QoQ: 15.4%
YoY: 0.2%
QoQ: 4.3%
YoY: 14.0%
Note 1: For all product segments Note 2: All figures mentioned in the slide are standalone volumes PFY – Previous Financial Year
24
Long term issuer rating at ‘IND A’ / Outlook : Positive
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
FY'18
FY'19
FY'20
FY'21
FY'22
FY'23
Aug'23
Current Rating A
Outlook
Positive
Last Review
Aug’23
25
Market snapshot
Key Market Statistics
As on 30th June 2023
BSE/NSE Ticker
517146 / USHAMART
CMP (Rs)
Market Cap (Rs Crore)
Number of outstanding shares (Crore)
Face Value (Re.)
270.4
8,246
30.47
1.00
52-week High / Low (Rs)
296.5 / 110.2
Shareholding pattern as on 30th June 2023
Public
30.2%
Corporate Bodies
13.4%
FPI
9.2%
Promoters
47.2%
26
Concall details
Usha Martin Ltd. Q1FY24 Earnings Conference Call
Time: August 8, 2023 at 5:00 PM IST
To enable participants to connect to the conference call without having to wait for an operator, please register at the below mentioned link:
Pre-registration
You will receive dial in numbers, passcode and a pin for the concall on the registered email address provided by you. Kindly dial into the call on the Conference Call date and use the passcode & pin to connect to call
Conference dial-in Primary Number: +91 22 6280 1141 / +91 22 7115 8042
International Toll Free Number:
Hong Kong: 800 964 448 Singapore: 800 101 2045 UK: 0 808 101 1573 USA: 1 866 746 2133
27
Contact us
About Us:
Established in the year 1960, Usha Martin is a leading global and India’s No. 1 specialty steel wire rope solutions provider. The Company is also engaged in the manufacturing of high-quality wires, low relaxation prestressed concrete steel strand (LRPC), bespoke end-fitments, accessories and related services.
Usha Martin’s wire rope manufacturing facilities in Ranchi, Hoshiarpur, Dubai, Bangkok and UK produce the widest range of wire ropes that find application in various industries across the world. All of the company’s facilities are equipped with the latest to manufacture world-class products.
state-of-the-art high-capacity machines
Usha Martin’s global R&D center located in Italy is actively engaged in designing of wire ropes and uses proprietary design software to develop products that are the best in class. The Company also has an extensive and dedicated network of distribution centers located across the globe.
Mr. Anirban Sanyal (Chief Financial Officer)
Usha Martin Limited
Tel: +033 – 71006 511 / 403
Email: investor@ushamartin.co.in
Anoop Poojari / Devrishi Singh
CDR India
Tel: +91 98330 90434/ + 91 98205 30918
Email: anoop@cdr-india.com
devrishi@cdr-india.com
Corporate Identification No: L31400WB1986PLC091621
Regd. Office: 2A, Shakespeare Sarani, Kolkata – 700 071, India
28
Thank You