Usha Martin (USM IN) – Visit Update – Multiple levers, One direction – BUY

We visited Usha Martin’s mother plant spread across ~140 acres in Ranchi and were impressed by USM’s in-house manufacturing capabilities to move up the value chain into high-margin specialized products. The visit reinforced our positive view on the company, with the combination of in-house machinery development, increasing focus on VASP and planned capacity additions providing visibility for sustained value growth. We believe USM could unlock further value from rest of its overseas operations under the One Usha initiative. With most of the UK restructuring benefits started flowing, there is significant potential for cost savings at other locations too. Post Covid, USM had initiated a turnaround plan with modernization capex to shift Thailand ops towards specialty ropes, which is still at lower margins than consolidated entity. Although middle east crisis may hamper near term volume growth, we believe USM is well placed to benefit from the volume growth opportunities in domestic as well as global markets with planned expansions, integration and value addition. The key monitorable remains the pace of commercialization of these capabilities, particularly in elevators and other specialized applications. We remain positive on USM and maintain our conservative 15%+ EBITDA CAGR over FY26-29E, reiterate Buy with TP of INR596 assigning 25x PER to Sep’28 EPS.