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Usha Martin (USM) is India’s largest manufacturer of steel wire ropes and specialty wire products, catering to critical applications across sectors such as mining, realty, oil & offshore, infrastructure, marine, engineering and industrial. Over the last decade, USM has increased its focus toward value-added segments by penetrating the high-margin OEM chain competing with global players. We believe USM is at an inflection point with its rising global market share (~4%) and leadership in the domestic market (over 60%). USM is expected to continue to deliver superior operating performance driven by: 1) improving market share across global OEMs; 2) timely expansion across its diversified end user industries; 3) focus on high-value specialty-grade ropes and wires; 4) improved supply-chain efficiency through the One Usha Martin initiative, and 5) growing after-market revenue share. We expect revenue/EBITDA/PAT to grow at ~10%/12%/16% CAGR over FY26-29E driven by planned capacity addition and improving utilization. We initiate coverage on USM with ‘BUY’ and TP of INR570 assigning 25x PER to Sep’28 earnings.

Driving value through premiumization: Over the last few years, USM has consciously shifted its focus away from volume-led growth and commodity products, toward specialized, high-value applications where technical capabilities, customer approvals and reliability matter more than the price, especially in premium segments such as crane, mining and offshore ropes. As a result, share of general-purpose (GP) ropes declined from 50% in FY22 to 35% in FY26 and value-added product (VAP) share improved to 36% from 26%. With USM gradually penetrating global OEM markets, aftersales business is also expected to increase.

Focus on sticky customer relationships and newer geographies: Once a wire rope product is qualified for a critical application, customers are often reluctant to switch suppliers given the operational and safety risks involved. USM works directly with leading elevator OEMs, port operators and industrial customers across multiple geographies. In India alone, USM operates through a network of 18 exclusive dealers, most of whom have been associated with USM for multiple generations. Over the last few years, USM has seen strong traction from Europe, the US and MENA region in oil & offshore, cranes, etc. Revenue share from international markets has improved to 57% in FY26 from 51% in FY22, resulting in overall wire rope realization rising by 7% CAGR. Bridge infrastructure in India also presents a significant import-substitution opportunity for USM.

Gradual capacity expansion as per market needs: USM is adding capacities, gradually supporting its diversified end user industry base, as per demand uptick and competitive scenarios. Most of the future capex is directed toward specialized and higher margin applications, rather than commoditized volume growth. USM is adding 6ktpa for elevator ropes with total capex of INR3bn over next 2 years.   

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