Usha Martin Ltd Management Discussions

GLOBAL ECONOMY

The global economy grew by 3.3% in FY 2024 25, supported by easing inflation and resilient labour markets. Major central banks, including the US Federal Reserve and the European Central Bank, began moderating their monetary stance, improving financial conditions.

Growth in advanced economies remained subdued, particularly in Europe and the UK, where industrial activity was sluggish. In contrast, India?s economy continued to outperform, driven by strong domestic consumption and infrastructure investments. China?s recovery was uneven, with a weak property market and subdued demand offset partially by policy support. Meanwhile, ongoing geopolitical tensions including the wars in Ukraine and the Middle

East, and US China trade frictions continued to disrupt global trade and energy markets, prompting shifts in supply chains.

Overall, the global economy continues to face structural and geopolitical challenges that may influence business strategies and trade dynamics in the near term.

GLOBAL OUTLOOK

Global growth is expected to moderate to 2.8% in FY 2025 26, with emerging markets continuing to drive growth. The shift towards renewable energy and infrastructure growth will create opportunities, though trade tensions and slow consumer recovery could hinder performance.

INDUSTRY OVERVIEW

In FY 2024 25, India?s economy expanded by an estimated 6.5%, supported by a revival in rural demand, resilient private consumption, and a stable macroeconomic environment. Private Final Consumption Expenditure increased by 7.3%, reflecting renewed consumer and healthy household spending. Retail inflation eased to 4.6%, contributing to broader economic stability.

Over the past decade, India has emerged as the fastest-growing major economy, with GDP nearly doubling from USD 2.1 trillion in 2015 to an estimated USD 4.3 trillion in 2025. This transformation has been fuelled by consistent policy reforms, infrastructure-led development, and rising industrial activity, all of which have direct implications for wire rope demand across sectors.

These developments have translated into increased demand for application-critical wire ropes used in lifting, hoisting, towing, anchoring, and mobility systems. The continuing expansion of infrastructure across roads, ports, urban construction, mining, and renewable energy is supporting structural demand for high-performance steel wire ropes and LRPC strands.

India?s ongoing urbanisation, especially in Tier 2 and Tier 3 cities, is leading to the development of high-rise buildings and smart urban spaces. This is driving sustained demand in the elevator and escalator segment, which depends on safety-certified, durable wire ropes. Industry estimates suggest this market will grow at a compound annual growth rate of approximately 8 per cent through 2032, driven by increasing investments in metro rail, airports, and housing.

The mining and construction sectors also offer significant growth opportunities. Rising mechanisation in coal, iron ore, and bauxite extraction, coupled with a national focus on domestic production and import substitution, is driving demand for mining ropes, draglines, and haulage solutions.

Large-scale infrastructure projects in roads, bridges, and energy corridors continue to generate strong requirements for lifting and rigging applications.

India?s oil and gas sector remains among the fastest growing globally. The countrys rising energy needs are prompting increased investments in upstream exploration, offshore drilling, and LNG infrastructure. Specialised wire ropes are vital to these operations, including for mooring, anchor handling, subsea installations, and offshore wind deployments.

The maritime sector is also gaining momentum. Flagship government programmes such as Sagarmala and the

Maritime India Vision have significantly improved cargo throughput, mechanisation, and port infrastructure. This has led to a rise in demand for ropes used in towing, anchoring, and dock operations. Additionally, the

Parvatmala initiative, focused on enhancing ropeway connectivity in mountainous regions, is creating a new segment of demand for CE-compliant, domestically manufactured cableway systems. With over 250 ropeway projects planned across the country, there is considerable confidence long-term potential for wire rope applications in passenger and material transport.

India?s multi-sector infrastructure push is creating sustained, structural demand for certified, high-performance wire ropes. Usha Martin is well aligned with this momentum, offering safety-critical, application-specific solutions that adhere to global quality standards including TUV SUD and DGMS certifications. By serving the evolving needs of both OEMs and the replacement market, the Company is strongly positioned to benefit from India?s industrial growth story.

BUSINESS OVERVIEW

In alignment with evolving sector dynamics, we advanced our value-led volume growth strategy, strengthening our position in application-critical wire rope segments such as mining, oil & gas, elevators, ports, and offshore energy. In

India, we benefitted from infrastructure momentum and extended our market reach across Tier-2 and Tier-3 cities.

We also improved supply chain responsiveness through tighter integration and regional alignment.

Internationally, we streamlined operations in the UK, UAE, and Asia-Pacific under the One Usha Martin programme.

At Brunton Shaw UK, we shifted focus to high-value offshore clients, while managing European exports directly from India reducing inventory levels and improving working capital. We also launched Oceanfibre, a new range of high-performance HMPE slings for offshore lifting developed at our UK facility.

Our One Usha Martin transformation delivered early results in FY 2024 25, including logistics and procurement savings, and a reduction in working capital days from 209 in September 2024 to 199 in March 2025. We also unlocked 141 crore in operating cash flows from international operations in H2 FY 2024-25, brought consolidated net debt down to 63 crore, and achieved a net cash position in our standalone operations.

We accelerated digital investments with the rollout of SAP S/4HANA across Singapore, Australia, Vietnam, Indonesia, the US, and Thailand, with implementation underway in Europe. This will enhance process control and enable seamless back-end integration.

With a strong OEM and replacement order pipeline and differentiated offerings like Galstar (aluminium-zinc coated wires for rockfall protection) and plasticated LRPC (used in bridge and metro rail projects), we are well positioned to serve evolving infrastructure and industrial needs globally.

PERFORMANCE REVIEW

On a standalone basis, during FY 2024 25, the Company achieved gross production of Wire Ropes and Conveyor Cord of 79,996 MT against 74,020 MT in FY 2023 24. The gross production of Strand, Wire & LRPC was 90,934 MT in FY 2024 25 against 82,412 MT in FY 2023 24. Production of total value-added products witnessed a change of 9.3% over the previous year.

PRODUCTION VOLUME VIA PRODUCTS STANDALONE

Products	FY 2024-25	FY 2023-24
Wire Ropes	76,126	70,449
Wire / Strands / LRPC	90,934	82,412
Conveyor Cord	3,870	3,521

During the year, consolidated turnover of the Company stood at Rs. 3,474.16 Crore, reflecting an increase of 7.7% over Rs. 3,225.20 Crore in the previous year. On a standalone basis, the Company?s turnover increased by

6.1% to Rs. 2,171.06 Crore from Rs. 2,046.09 Crore in the previous year.

The EBITDA achieved by the Company on a consolidated basis was Rs. 636.45 Crore, being 18.3% of the reported turnover, and Rs. 463.29 Crore on a standalone basis, being 21.3% of the turnover, compared to Rs. 638.84 Crore and Rs. 460.38 Crore respectively in the previous year.

INTERNATIONAL BUSINESS

Usha Martin International Limited (UMIL):

UMIL, a wholly owned subsidiary based in the United Kingdom, oversees Usha Martin?s European operations. It operates through the following wholly owned step-down subsidiaries and maintains a production facility in Nottinghamshire, UK:

• Usha Martin UK Limited

European Management & Marine Corporation Limited

Brunton Shaw UK Limited

• De Ruiter Staalkabel B.V.

• Usha Martin Italia S.R.L.

• Usha Martin Europe B.V.

• Usha Martin Espa?a, S.L.

UMIL Consolidated Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	71.9	77.0	81.7
PAT (incl. OCI)	6.3	4.9	0.3

Brunton Wire Ropes FZCo (BWRF):

BWRF is a wholly owned subsidiary based in United Arab

Emirates, with 75% of its paid-up capital held directly by the Company and the remaining 25% held by Usha

Martin Americas Inc., another wholly owned subsidiary. The production facility is strategically located in the Jebel Ali Free Zone, Dubai.

Brunton Wire Ropes Industrial Company Limited, Saudi Arabia, is a subsidiary of BWRF and serves the Middle East market with a specialised focus on wire ropes, slings, and related products.

BWRF Consolidated Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	36.6	35.3	37.9
PAT (including OCI)	2.6	3.8	4.3

Usha Martin Singapore Pte Limited (UMSPL):

UMSPL located at Singapore is a wholly owned subsidiary of the Company. UMSPL operates as a warehousing and distribution hub for wire ropes in Asia and manages the following step-down subsidiaries:

• Usha Martin Australia Pty Limited

• Usha Martin Vietnam Company Ltd.

• PT Usha Martin Indonesia

UMSPL Consolidated Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	38.6	34.6	37.9
PAT (incl. OCI)	1.2	1.6	2.0

Usha Siam Steel Industries Public Limited (USSIL):

USSIL is a subsidiary of the Company situated in Thailand in which the Company along with Usha Martin Singapore

Pte Limited and Usha Martin Americas Inc. holds the entire equity of USSIL. Further, Usha Siam Specialty Wire Company Limited (USSWCL) is a step down wholly owned subsidiary wherein USSIL holds 99.99% shareholding and the balance 0.01% is held by Usha Martin Singapore Pte

Limited. The production facilities of USSIL & USSWCL are situated at Bangkok, Thailand.

USSIL Consolidated Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	1,821.2	1,523.7	1,531.3
PAT (incl. OCI)	99.9	34.8	35.3

Usha Martin Americas Inc [UMAI]:

UMAI is a wholly owned subsidiary of the Company situated at Houston, United States of America.

UMAI Consolidated Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	26.2	21.2	23.6
PAT (incl. OCI)	3.2	2.1	2.3

DOMESTIC BUSINESS

U M Cables Limited (UMCL):

UMCL is a wholly owned subsidiary of the Company, engaged in the manufacture of telecom cables, with its production facility located at Silvassa, India.

UMCL Performance

Particulars	FY 2022 23	FY 2023-24	FY 2024-25
Turnover	111.7	135.3	99.9
PAT (incl. OCI)	0.6	7.3	0.8

In addition to the entities mentioned above, the Company has two domestic subsidiaries and two joint ventures in India.

Key Financial Ratios

The key financial ratios of the Company for the financial year under review as compared to the previous financial year are provided herein under:

Particulars	FY 2024-25	FY 2023-24	Change %
Debtors Turnover (days)	46	44	4.55
Inventory Turnover (days)	100	110	(9.09)
Interest Coverage	36.6	63.1	(41.99)
Ratio#
Current Ratio	2.8	2.7	3.70
Debt Equity Ratio	0.1	0.1	-
Operating Profit	19.2	20.9	(8.13)
Margin- EBIT (%)
Net Profit Margin (%)	13.9	15.7	(11.46)
Return on Net	21.2	26.8	(20.89)
Worth (%)*

#Interest coverage ratio has reduced due to increase in finance cost during FY 2024-25. *Return on Net Worth has declined due to a year-on-year reduction in profit after tax.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

Opportunities

• Capacity expansion in Ranchi: We are increasing production capacity at our Ranchi facility to support growing domestic and international demand. This long-term investment is expected to enhance volume output and operational efficiency.

• Restructuring of BSUK operations: Our UK operations are transitioning to a leaner model focused on niche offshore segments. This has helped reduce working capital needs, lower overheads, and improve return on capital employed.

• Robust domestic demand: We witnessed a 15% year-on-year volume growth in India, driven by infrastructure development, rising urbanisation, and increased demand across core end-user industries.

• Infrastructure pipeline: Government programmes such as Bharatmala, Sagarmala, Smart Cities Mission, and Parvatmala are generating sustained demand for high-performance wire ropes, particularly for elevators, cranes, ports, and ropeways.

• Emerging offshore opportunities: Growth in offshore wind and oil & gas is spurring demand for synthetic slings and corrosion-resistant ropes. Our CE-certified offerings position us to address these opportunities in Europe and the Middle East.

• New product verticals: Products like Oceanfibre

(synthetic slings), Galstar (Al-Zn coated wires), and plasticated LRPC are expanding our addressable markets and supporting value-added growth.

• Stable replacement market and long-term OEM contracts: With a strong replacement cycle and long-term supply agreements, especially in elevators and mining, we ensure consistent revenue and cash flow visibility.

Threats, Risks and Concerns

• Price competition in general-purpose ropes: The influx of low-cost exports, especially from East Asian countries, continues to exert downward pressure on pricing in generic product categories, impacting margins.

• Working capital stress: Project execution delays and extended receivable cycles in certain geographies are creating short-term liquidity concerns, necessitating tighter credit control and monitoring.

• Geopolitical instability: Ongoing global conflicts and regulatory uncertainties are affecting key shipping lanes and trade corridors, particularly those serving the US and Europe.

OUTLOOK

As we move into FY 2025 26, our focus is on translating strategic investments into operating momentum. The capacity expansion at our Ranchi facility is on track for completion in the first half of the year, which will allow us to serve rising demand in high-value applications such as offshore, elevator, crane, and mining. We are aligned on optimising asset utilisation and improving throughput across key product lines.

We remain closely aligned with global demand trends. In India, infrastructure momentum, particularly across metro, high-speed rail, and urban development in Tier 2 and 3 cities which is expected to support strong volumes.

Internationally, we are gaining traction in the Middle East and Latin America, while Europe is showing early signs of recovery. The offshore wind segment in the North Sea is also being closely evaluated as a potential growth avenue. On the operational front, we are advancing structural efficiencies. The restructuring of our European operations and an increased share of direct exports from India are expected to reduce costs and improve delivery timelines. We remain focused on maintaining EBITDA margins at or above 18%, strengthening our product mix, and executing discipline in a dynamic external environment.

INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

We have established a robust internal control system that aligns with the size, scale, and complexity of our operations. These controls are designed to ensure the orderly and efficient conduct of our business, uphold our policies, safeguard assets, prevent and detect fraud and errors, ensure the accuracy and completeness of our financial records, and enable the timely preparation of reliable financial information.

Our control environment is built on well-documented policies, clearly defined authorisation matrices, and a structured delegation of authority. These are embedded within our SAP system to enable system-driven controls right at the source, promoting transparency and accountability across all our functions.

To maintain objectivity and uphold the highest standards, we have engaged a reputed firm with international credentials as our Internal Auditor. The auditor conducts risk-based audits across our operations and reports key findings to our management and the Audit Committee of the Board.

Our Audit Committee reviews these reports, assesses the effectiveness of our internal control systems, and monitors the implementation of audit recommendations. Based on the internal audit findings and reviews, the Committee believes that our internal control systems are both adequate and effective, functioning with a high degree of reliability.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

As we move ahead with our transformation journey, our people continue to play a key role in our growth. We are building a workforce that is ready for the future and aligned with our values and goals. Our HR approach is based on giving employees responsibility, ensuring fairness, and creating an inclusive work environment where everyone can grow and contribute.

We encourage teamwork and open participation in improvement initiatives, which has helped us build a confident, motivated, and results-driven workforce.

Learning and development remain a priority for us. Our training framework includes on-the-job learning, classroom sessions, and digital programmes. We identify training needs through performance reviews, self-nominations, and development plans, making sure the learning is useful and relevant to our business.We offer a range of programmes, from technical training to leadership development and compliance. Our self-paced online courses also help employees understand our manufacturing processes better and support our focus on operational excellence.

The Usha Martin Learning Academy in Ranchi, Jharkhand, has been a major step forward in our training efforts. It offers practical, hands-on learning that is closely linked to our technologies and processes. This has helped improve our technical skills and productivity across the organisation. During the year, we increased our focus on employee engagement. Some key steps included regular town halls with leadership, the launch of a new Learning Management System (LMS), feedback surveys, and internal communication campaigns. These efforts helped us improve communication, build trust, and make everyone feel more connected. We also set clear goals to improve gender diversity across different levels of the organisation. At the same time, we are working to create an environment that supports career growth and work-life balance for all employees.

We have set up direct communication channels between employees and HR to listen to feedback, understand needs, resolve concerns, and make improvements. Industrial relations remained stable throughout the year. We successfully concluded a long-term wage agreement with our recognised unions, covering wages and working conditions.

Our commitment to people goes beyond the workplace. We continue to invest in the local communities around our manufacturing units through programmes focused on education, skill-building, and healthcare. These efforts aim to improve quality of life and support long-term development.

The total number of employees as of the reporting date is provided in the BRSR section of this Annual Report.

APPRECIATION

The Company has been getting necessary support and cooperation from all stakeholders including customers, suppliers, value chain partners, investors, authorities, lenders and employees of the Company to whom the Company expresses its sense of appreciation.