Usha Martin Limited (517146) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Usha Martin Limited Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anoop Poojari of CDR India.

Thank you. Good afternoon, everyone, and thank you for joining us on Usha Martin's Q4 and FY '25 Earnings Conference Call. We have with us Mr. Rajeev Jhawar, Managing Director of the company; Mr. Abhijit Paul, Chief Financial Officer; and Ms. Shreya Jhawar, from the strategy and growth team of the company. We trust you have reviewed the earnings documents shared earlier. To begin, we will initiate the call to opening remarks from the management, following which we will have the forum open for a question-and-answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Mr. Rajeev Jhawar to make his opening remarks.

Good afternoon, everyone. On behalf of the management team of Usha Martin, I would like to welcome you all to our earnings conference call. I will begin by sharing some updates on operations and strategies following which our CFO, Mr. Abhijit Paul will run you through the key financial highlights. We are pleased to share that FY '25 ended on a steady note with revenue reaching INR 3,474 crores, a growth of 7.7% year-on-year. driven by 9.5% increase in volumes across our core segments. The Wire Rope division performed well, recording a 9.3% year-on-year revenue growth, while the Wire segment registered a robust 19.7% increase over the same period. Within the Wire Rope segment, the value-added products accounted for 71% of revenue in FY '25 with encouraging contributions from the oil and offshore and the elevator sectors. International markets contributed 55% to total revenues during the year. In Q4 FY '25, EBITDA margins were at 15.6%, primarily due to a higher share of LRPC sales during the year -- during the quarter. As part of our measures to optimize the business model in our international locations, we have taken a provision of onetime redundancy cost of INR 4 crores during the quarter. Excluding this onetime cost, the EBITDA margin stands at 16%. Looking ahead, we remain focused on cost control, operating discipline and enhancing the share of value-added offerings to support margin expansion. As shared previously, One Usha Martin is our company-wide transformation program aimed at operating as a unified enterprise moving away from regional silos. This strategic shift is yielding gains in cost optimization. It will also help us become more competitive and strengthen our position to gain further market share. The initiative is now firmly embedded in our culture and way of working. I would like to share a few key developments under the One Usha Martin approach. Number one, as a part of this initiative, the restructuring at our Brunton Shaw U.K. business is progressing very well. Under the new model, Brunton Shaw will operate as a specialized hub focused exclusively on manufacturing critical large diameter ropes for the oil and offshore sectors. For other key value-added sectors, such as fishing, elevator, crane and mining, we have commenced direct exports from India to the European customers, enabling improved service levels, and enhanced cost efficiency. The full transition is on track and set to be completed by September of 2025. This integration of Ranchi and Brunton Shaw has also played a significant role in reducing inventory requirements at BSUK thereby contributing to better working capital management. In parallel, we are implementing best practices in procurement, logistics and back-end operations across regions with a focus on driving leaner and more efficient administrative structure. We anticipate that benefits of these enhancements will start delivering measurable value from the second half of the year FY '26 -- '25-'26. We are also making significant progress in our digitalization efforts. During the year, the implementation of SAP S/4 Hana was successfully completed for our operations in Singapore, Australia, Vietnam, Indonesia, United States and Thailand, with the upgradation of our European entities currently in progress. Moving everyone on a single unified digital platform is a key enabler of the One Usha Martin vision, facilitating stronger process controls and ensuring the successful integration of our back-office operations. With these initiatives underway, we are starting to see early results across key metrics and expected further improvement as the programs mature. We have begun to see improvement in working capital efficiency because of this integrated approach. Working capital days improved from 209 in September of 2024 to 199 days in March 2025, reversing the earlier trend. Additionally, we generated INR 141 crores of operating cash flows from international operations in H2 of FY '25, helping strengthen our balance sheet. As a result, even after undertaking INR 245 crores of CapEx during the year, we brought down the consolidated net debt to INR 63 crores, while our stand-alone India operations turned into net cash positive. With these improvements in place, we are confident of sustaining this trajectory and maintaining tighter control over working capital in the quarters ahead. Looking forward, our strategic focus for the upcoming year will center around the following priorities: number one, continue to pursue value-led volume growth through completing the capacity expansion at our Ranchi plant. We expect volume ramp-ups in the value-added wire rope segment to support our margin expansion in the quarters ahead. Number two, focus on value-added services for customers through our dedicated drinking shops in Europe, Middle East, Southeast Asia, thereby also improving customer stickiness and margins. Number three, in the domestic market, the continued growth in infrastructure activity both expansion and advancement of Tier 2 entire 3 cities is expected to drive demand for our products, particularly in segments such as Elevator and Crane Ropes. We are working closely with our channel partners' network to grow our market share in India. Number four, we will continue to focus on our [ Galstar ] product line, which offers aluminum zinc-coated wires for rock fall barrier protection. This initiative is part of our broader strategy to pursue high-value products even within the Wire segment, both in the domestic and the international markets. Our commercial production of ocean fiber has begun making our entry into the synthetic link space for offshore lifting. Though at a nascent stage, at the moment, the venture reflects our long-term commitment to product innovation and global relevance. To conclude, we remain committed to long-term value creation through consistent investments in value-added segments, product diversification and operational resilience. While there are uncertainties globally and ongoing geopolitical tensions, our disciplined approach to execution and financial prudence will continue to support sustained performance in the quarters ahead. With this, I would now like to invite our CFO, Mr. Abhijit Paul to present you the financial highlights for the quarter ended 31st March '25. Thank you, and over to you, Abhijit.

Thank you, and a very good afternoon to everyone. I will now provide a brief overview of the company's operating and financial performance for the quarter and year ended 31st March '25. In Q4 of FY '25, our consolidated net revenue from operations stood at INR 896 crores, reflecting a year-on-year growth of 8% over INR 829 crores in Q4 of FY '24. This revenue growth was led by strong performance of our Wire & Strand segment, which grew by 36.5% year-on-year and LRPC segment, which saw an 18% year-on-year increase. The core Wire Rope segment remained at the same level on a Y-o-Y basis and is expected to gain momentum in FY '26, supported by a recovery in demand and the ongoing One Usha Martin initiative. These efforts are aimed at enhancing our competitiveness in international markets, which in turn will drive growth and margin improvement. Operating EBITDA for the quarter stood at INR 140 crores, compared to INR 152 crores in the corresponding period last year. Excluding onetime redundancy provision, EBITDA margin stood at 16% for Q4 of FY '25. That said, as highlighted earlier, our focus on driving operational efficiencies remains firm and we expect this to support margin recovery going forward. Net profit for the quarter stood at INR 101 crores compared to INR 106 crores in Q4 FY '24. On a full year basis, FY '25 consolidated net revenue increased by 7.7% year-on-year to INR 3,474 crores, compared to INR 3,225 crores in FY '24. The Wire Rope segment remained our key contributor, accounting for 72% of total revenue. Operating EBITDA for the year was INR 597 crores, largely stable compared to INR 599 crores in FY '24. Profit before tax stood at INR 527 crores as against INR 550 crores in FY '24. PBT was impacted by higher depreciation costs resulting from capitalization of assets worth INR 303 crores. On the balance sheet front, I'm pleased to report a notable improvement in our financial position. As of 31st March '25, our consolidated net debt reduced to INR 63 crores, down significantly from INR 124 crores a year ago. Correspondingly, our net debt-to-equity ratio improved 0.02x, down from 0.05x as of March '24. Our prudent capital allocation ensures that ongoing and planned growth investments remain comfortably funded. From a cash flow standpoint, we delivered a solid improvement. Cash flow from operations before tax in FY '25 stood at INR 541 crores, representing 91% of operating EBITDA compared to INR 200 crores, which was 63% of the operating EBITDA in H1 FY '25. These robust cash flows coupled with adequate working capital headroom provides a strong foundation for future investments and capital deployment. In closing, I would like to reiterate our confidence in One Usha Martin's long-term growth trajectory. We expect continued momentum across both volume-led and value-led drivers, supported by strategic initiatives such as One Usha Martin transformation and ongoing investments in digitalizations and customer engagement. We remain committed to delivering sustained performance improvements and long-term value creation for all stakeholders. This brings me to the end of my address. I will now request the moderator to open the line for a question-and-answer session.

[Operator Instructions] The first question comes from the line of Aman Sonthalia from AK Securities.

Sir, I have question regarding the performance and future direction of the company. Sir, what is the reason behind the dip in the margin and when we can expect margin improvement?

So thank you for your question. So as we mentioned in our opening remarks that there was a onetime redundancy cost of INR 4 crores this quarter, which did impact our margins -- margin percentage. Secondly, the margin percentage was also impacted during this quarter because of the LRPC mix. So the volumes of LRPC in this particular quarter was about 15,000 compared to Q3, where it was about 13,000 metric tons. So this LRPC mix, if we think about how this accounted for the overall margin percentage, it would be approximately a 1% margin reduction on account of this mix. And, Thirdly, another reason is also the higher cost in the European entities, which we had mentioned in the last call as well which continue to impact our margin. And for that, we have taken certain initiatives, especially in our BSUK facility. And based on these restructuring initiatives of the BSUK business, which we are implementing, we do expect further margin improvement, especially starting Q2 of this next financial year.

Okay. Next question is, when can -- for the last few years, I think our volume in Wire Rope is almost stagnant. So from when we can see noticeable volume growth in Wire Rope segment?

As I had mentioned in the opening remarks that our volume grew by about 10% year-on-year. As far as Wire Rope is concerned, the new CapEx is already in place, and we have the capability of increasing our volumes. And as the markets keep on improving as we are targeting newer markets in Saudi Arabia and also different sectors, even further concentrating our markets in India, we are now gearing up to increase our volumes. And I expect quarter-on-quarter, we should be able to see growth in our volumes as we move forward.

And sir, what is the latest update on Galstar wireline, plasticated LRPC, and the business in Saudi Arabia?

The Galstar line is now started to produce, and we have got trial orders as well as some commercial orders from our customers. I'm happy to say that the samples produced have been accepted well in terms of the quality. And we are now expecting the ramp-up of volumes to take place. And we expect that we should be gradually ramping up the volumes in the next 2 quarters to be able to come to close to 400, 450 tonnes a month. And then by end of this will come to almost 80%, 85% of our capacity. On the plasticated LRPC, the -- our plant is capable of producing 500 tonnes a month. As of now, we are doing close to 200 to 250 tonnes a month. This largely depends on the various projects, which we have quoted for. And depending on the demand from these projects and the -- as the schedules come, we should be able to ramp up. We would say that in the next 3 to 4 quarters, we -- based on the projected demand and the projects under the pipeline, we see that there's an opportunity that towards the end of the year, we see the volume uptake come closer to our capacity.

Okay. And sir, this -- sir, how is the European and U.S. market?

The European market is fairly stable, I would say, with demand from oil and offshore continues to be strong with good inquiries. I think the order book should get better in the coming months. Even the Elevator business is stable. As far as the U.S. market is concerned, the markets are a little confused at the moment with the various tariff issues, which are happening on a day-to-day basis. But based on our team, we expect that the business should ultimately be stable as the U.S. does not have the manufacturing capability of the additional volumes and with a fairly good product mix and customer base established already there, we should expect the business -- we should expect the business to be as usual and hopefully, better as things stabilize.

And sir, one last question. There may be a chance of peace within Ukraine and Russia in near future. This could present a significant opportunity for our product in Ukraine. So how prepared are you to capitalize on this potential, if it happens?

First of all, if it happens, it could be -- that would be very good for the overall geopolitical situation. I think this would lead to a big reconstruction of the war -- whatever happened during the destruction in the war. So a lot of reconstruction activity will happen, thereby increasing the demand for crane ropes as well as elevator ropes, particularly in these 2 areas. And I feel that, that could result into a big opportunity coming up. But that always depends if and when it happens. And the company is with its expansion, has enough capacity to be able to take care of these demands if and when they come.

The next question comes from the line of Rajesh Majumdar from B&K Securities.

So sir, I had a question that our Wire Rope quarterly volumes were about 28kt 2Q FY '25 and from there it has fallen to 25kt. Can we attribute this entirely to the European business and the fact that there is some short-term restructuring going on? Or is there some slackening in the demand as well?

Thanks for your question. In the European market, while the demand is healthy, there have been certain margin pressures which have impacted the performance and there are some competitive pressures that we see in the market. So part of it would be attributed to the European market, as you mentioned. But overall, globally as well in Q4, there was a slight slowdown on account of the uncertainties around policies and tariffs. And that's why the Rope performance was largely flat compared to Q4 of the previous year. At the same time, in terms of the domestic market as well as market in the Middle East certain project execution was slightly slower than anticipated. But we see some early signs, and we think it should pick up in the upcoming year. And as we mentioned before, our focus will be now to optimize our costs in order to tackle some of these pressures that we're seeing in the European market as well as globally and at the same time, focus on the value-added growth product and as well as our Rigging business in Europe, Middle East, South-East Asia in order to grow our group volumes as well as our margins.

Okay. And secondly, on your outlook for margins, we've seen 15% around for the 2 consecutive quarters, and you said 2Q FY '26, so you have a long-term guidance of 18% to 20%. So will we see that in 2Q or even later than 2Q, that kind of a margin profile coming back in the company? Yes, that was my last question.

So quarter-on-quarter, obviously, depending on the mix, the margin can change. But I would say that over the next years, we expect an overall margin of 18% at minimum is what we are targeting with stronger progress towards the second half as some of our One Usha Martin initiatives are in full swing. So that's on an overall year basis, we still maintain a minimum of 18% is our target.

The next question come from the line of Krupanshu Shah from Thinqwise Wealth Managers.

So just on the Wire Rope volumes. So earlier, we had some visibility from Saudi Arabia market, no growth of -- we were targeting 4,000 metric tonnes, right, in a year. So like that, even Elevator Rope you were targeting around 12,000 tonnes. So how is the visibility now that you've entered FY '26? And are there new opportunities from the U.K., India free trade agreement, like just on the volume side. So if you can give me some visibility. That's my first question.

On the -- thank you for the question. So on the Elevator volumes, I think we are on target and we expect strong demand both from the international markets where we are operating as well as in the domestic market with the growth in the Tier 2, Tier 3 cities, we expect the demand to be fairly strong, and we are on target to achieve the numbers what we have projected. In terms of the Saudi market, we have started doing between 150 to 200 tonnes a month, which is on an annual rate of close to 2,500 tonnes. And we expect that gradually because we have just started a few months now, with initial supplies made, some repeat orders coming, we are fairly optimistic to achieve these numbers, maybe a quarter here or there. But ultimately, we -- the demand traction is very strong. And we expect to be around the 4,000 tonnes by the time the exit rate of 4,000 tonnes we should be able to achieve.

And on the U.K., India agreement, are there -- does it open any opportunities for us?

The U.K., India, I don't think [indiscernible] our demand between India and U.K. through our BSUK continues to be stable, and we expect that these volumes should be continuing. Neither we see -- I don't see a big increase because our new model, which we have built up where we now supply directly from India to the European companies instead of through BSUK plant. So there may not be direct supplies to BSUK. But overall, our volumes in the European market on the BSUK brand should be fairly stable to getting better.

Understood. And on the gross margin, so this quarter, we've obviously seen a significant compression. Can we attribute it entirely to the product mix change? And if supposing a wire rope mix improves, then is a 50% kind of a margin reasonable?

As Shreya just mentioned that [indiscernible]. [Technical Difficulty]

I'm sorry to interrupt you, your audio is not coming in clear. Ladies and gentlemen, I will request you to stay connected while I reconnect the management. Ladies and gentlemen, we have the management reconnected. Krupanshu you can please continue.

Yes, my question on gross margin.

Yes, so I stated that it was primarily due to the mix of LRPC, which impacted the gross margins. If we look at our user mix from the last couple of quarters, it would be at similar levels.

Understood. And my last question would be our Wire & Strand volume growth has been very encouraging. So where is the growth coming from exactly? If you can give us the type of orders also, please?

Sector, mainly from the auto segment and some of the specialized spring requirements. And that is both which we supply to the domestic market as well as the customers are exporting it. So it's mainly coming from the Auto and the Specialized Spring segment. As far as the Strand is concerned, it is the LRPC, which is because of the demand from the construction sector and the plasticated LRPC would be going into the big -- bridge construction. So these would be the sectors where we expect the growth coming from.

The next question comes from the line of Prolin Nandu from Edelweiss Public Alternatives.

The first question is slightly on the margin pressure that you alluded to not just in this quarter, but couple of quarters back as well that you have also clarified that there's slightly heightened competition. So my question is will this tariff thing settling and maybe the Ukraine issue also solving, should we some -- see some easing of competitive intensity led margin pressure in the coming quarters? Any color on this aspect of margin pressure that we have alluded to in the past? Any change there that you see in the near term? Or this margin pressure is something which you think is going to continue?

As we mentioned that margin pressure is because of 2 reasons. One is because of the competition, which is always going to be there. And secondly, because we are going through, we could see that in our new model -- in the business model which we have now gone for a change in our model with our European subsidiary, BSUK, now focusing only on the higher value-added products and the direct shipments from the new capacities built in India, which would result in reduction in our fixed cost as well as some of the initiatives part of One Usha Martin, where we are focusing on shifting a lot of back-office work to India, thereby optimizing our cost, focusing on the logistics, procurement and all these things. All these things which are actively being pursued, we expect the year to be -- the whole year, as Shreya mentioned, to be at minimum 18% EBITDA margins from the current levels of what, 16% we are in. Overall, with these initiatives and improvement in product mix and increase in volumes, all coming together, we should expect to be around 18% for the year, minimum.

I understand, Mr. Jhawar. So what I'm trying to understand is that this is not assuming any change in competition, right, or any change in the intensity of competition. Am I correct in assuming that?

Yes, this is assuming that business as usual at our current level. Yes, that's what we are assuming as the state of business today.

Understood. And on this restructuring, right, you have spent INR 4 crores as a one-off, right, in Q4 FY '25. How much more do we intend to spend on restructuring? And do you think that the benefit might start accruing from Q1 onwards or this would be back-ended even in FY '26?

Yes. So in terms of the BSUK restructuring, we -- as part of our overall plan, we are reducing the manpower at BSUK by about 50%. And that entire provision of INR 4 crores for that restructuring largely was on account of this manpower reduction, which is a onetime cost, and we don't expect any further provisions to be taken in the upcoming quarter. So this was the major cost in terms of restructuring that we see when it comes to this initiative. At the same time, we are also looking at optimizing the other fixed costs like Rajeev mentioned around the back office operation [indiscernible]. So costs would reduce, but we don't expect any further provisions in terms of restructuring to be taken.

And the other question is when do we expect the benefit of this to start reflecting? I would say from -- once all this is completed, we'll see the effect on the overall cost and improvement in margins from Q2 of this financial year.

The next question comes from the line of Aryan Sharma from B&K Securities.

Just a couple of questions regarding the guidance. So could you just guide me through -- like you mentioned previously that we can expect sequential volume growth. But could you just guide me through some numbers as to what you are expecting for FY '23,'24?

Overall, in terms of both volume and top line, we expect, say, about a 12% to 15% growth overall across the wire rope as well as wire segment. LRPC again, is up and down, depending on competitive pressures. So that -- within that, our focus will be primarily on the plasticated LRPC, how much we can grow within our capacity of 500 tonnes a month.

And what will be our value-add share then? What we are expecting in value share?

Within Wire Ropes, our value-add share right now in terms of revenue is 71%. The goal is to maintain that at a minimum. And with the new capacities that have come on stream and certain OEM approvals that we are targeting, hopefully, that should grow gradually as well. But we at minimum do maintain that share.

Okay. And just one final question with regards to the restructuring, which we are doing right now. Sir, is there any quantifiable number which you guys have worked out on like how much we are expecting just EBITDA margin because of this restructuring like over normalized EBITDA?

Abhijit?

So once this entire restructuring exercise is done in the European facilities and across the global entities, we are looking at the cost side for all the entities, wherever we have scope. So this will have an impact of 1% to 2% on the margin, 1% to 1.5% on the margin. So the cost impact will be around 1% to 1.5%, maximum to 2% of the margin that we are targeting.

The next question comes from the line of Shraddha Kapadia from SMIFS.

My question is...

You are not clear, your audio is not clear.

Yes. So my question is majorly regarding the international market. So currently, they contribute approximately 55% of our revenue, so for the future or the next leg of expansion, which are the major markets which we would be targeting?

In terms of the international market, as previously mentioned Saudi Arabia will be one of the major markets that we are targeting. There are lot of construction projects as well as within oil and gas and the port sector in Saudi Arabia that would boost the demand for our crane ropes as well as the sling. So that is one of the markets we're targeting. Secondly, offshore wind -- the offshore wind sector in the U.K. and the North Sea area is another key demand driver because we're seeing certain projects in the pipeline for the upcoming years. Thirdly, in UAE, also the oil and gas projects are gaining some traction now. So with -- if some of those projects materialize, then we would see growing demand for our oil and offshore ropes in the UAE as well. And then in the Americas, of course, the market was a bit uncertain over the last couple of quarters. But now with things stabilizing a bit, we hope that the mining as well as the port and elevator markets that have been strong in the U.S., that continues as well. That being said, while international market share has grown and now is at 55% of the total top line for the last few quarters, now we think this would maintain at the same level because in the domestic market as well, we're seeing a lot of traction and a lot of -- while it was slow in terms of project execution in the last few quarters, hopefully, with the demand in the elevator sector as well as some of the cranes and the construction sector, we see growth in the domestic market as well. So overall, the mix would largely be at the 55%, 56% range for international and 45% for India.

Sir, actually, my next question was somewhat related to this only. So if we take a look the infra spending is picking up in India, Europe. So how do you look at this going forward for FY '26?

Yes. The infra growth has started picking up in India. And also if the geopolitical situation gets better, as we discussed earlier, this should bring a big opportunity growth in the infra sector, and that would enable our demand for crane ropes and elevator ropes to be fairly strong, both in the domestic and international markets because with infra growth, these are the 2 sectors where we see good demand should come in. So hopefully, it should get better in the coming quarters if the infra growth trend continues.

The next question comes from the line of [ Pritesh Chheda ] from Lucky Investments.

Ma'am, can you give a bridge on what is the capacity utilization in wires that you have on the capacity? And how much is the expanded capacity addition that we have done?

So our capacity for the current year is around 80% to 85%. And with the additional capacity coming in, we'll be reaching around -- our wire rope capacity will be around 150,000 will be our revised wire rope capacity. And the current volumes are around 104,000. So we have room for growth for the next 3 to 4 years. So that is the current...

At 104,000, you are 85% utilization. So you're basically adding about 13,000 tonnes.

No. So 104,000 is the current volumes on a capacity of 125,000, and we are adding another 20,000 in the road, 20,000 to 25,000. So we will reach around 150,000 by the end of this quarter. So on that basis, we see that for the next 2 to 3 years with a 10% volume growth, we are quite covered.

Okay. What's your market share in U.S. and Europe in Wire Ropes?

In Wire Ropes, our market share in U.S. would be 3% to 4% overall. So we are at a low base right now. In terms of our overall top line, about 5% to 6% comes from the U.S. market. So we are at a fairly low base in terms of market share and even our mix of U.S. business in the total revenue. But with certain traction in mining, elevator ropes, as well as certain port contracts that we are looking at, hopefully, that is something that we can build on. But again, the U.S. is something where there is a little bit of uncertainty. So even from our U.S. operations, we're also looking at Canada as well as Latin America as opportunities for growth. So that's something that we're looking to pursue more aggressively over this financial year.

And Europe?

In Europe, again, in different sectors will be different. In the fishing rope segment, for example, it would be less than 5%, while in oil and offshore, our market share is more with the OceanMAX brand. But overall, I would say it's still between 8% to 9% market share even in Europe. The competition is obviously more intense in the European market with a lot of regional players, a couple of regional players in the [indiscernible] sector. But I think with the new model, again, back to the new Brunton Shaw model that we have with supplies from India, we think that the European market is an area where we can get a lot of growth because the customers have shown positive signs and acceptance of supplies from our Ranchi facility that have already started. So with the reduced cost being more competitive in the market as well as with the acceptance of our products from India. I think the combination of that should help us increase the market share in Europe.

And lastly, what is the differential EBITDA per kg between wire ropes and wire and strengths?

Overall, as you know, our EBITDA per tonne has been at -- for the year, about INR 30,000 per tonne. We don't usually separate it out between wire rope and wires because a lot of the capacities are fungible. But if I have to give you a ballpark, wire rope, INR 50,000, INR 55,000 to INR 60,000 per tonne, whereas wires would be INR 12,000 to INR 15,000 per tonne.

You're not audible. Wire ropes is how much?

Wire ropes will be between 55,000 to 60,000 whereas wires 12,000 to 15,000, but these are indicated.

The next question comes from the line of Jathin from InvestSavvy Portfolio Management.

Would like to know what are the top 2 opportunities and top 2 risks that you see for the company, especially in light of all the global uncertainties which have acted?

I would say the opportunities would always be in the infrastructure and the oil and offshore, which continues to be fairly robust with most of the countries still trying to be energy self-sufficient. And that has been a growth area for us in the last year as well, and that continues to be strong. Elevator rope business also continues to be fairly strong, particularly in the domestic market with the extensive growth in the Tier 2, Tier 3 cities on the real estate business with the multistory buildings. And the -- so that is an area where we feel that the growth would continue to be very strong in the coming -- should be there. On the risk side, of course, the top risk, of course, the uncertainty on the U.S. tariff, which hopefully should not be a major issue for us, but definitely, with the new policy changes coming every day, uncertainties in the minds of the customers that what happens if they import and the prices are higher and then the tariffs come down, they get stuck with higher inventory. And all these uncertainties could definitely be one of the risk factors. The other risk factors could be if the geopolitical situation gets worse globally, it could definitely again destabilize the logistics, the market. So these could be the potential risks, what we see in front of us.

Now the fact that China's tariff has more or less been -- like seems to have been frozen at 30% and India currently is at 26%, which could go down, would that be an opportunity for you?

For us, when it comes to the tariffs, are under Section 232. So it's almost a level playing field of 25% for all countries. China is a bit higher, I think, at about 35% under -- for our sector, in particular, we don't see that changing. This has been effective since March 12. And before that, there was still a bit of uncertainty. But since then, I think this has stabilized. And I mean, in the future, we don't know what that would, but as of now, this is what it is. So for all other countries, except China, it's a 25% level playing field.

And the U.K. treaty has also not changed that for U.K. The U.S., U.K. treaty, the treaty between -- whatever the agreement between U.S. and U.K., which was just signed, that has also not changed that for U.K.

Nothing for us. So those changes are not having any impact on us.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for their closing comments.

I would like to thank everyone for attending the call and showing interest in Usha Martin Limited. I hope we have been able to answer all your questions. The company is dedicated to creating value for all its stakeholders in a sustainable manner. Should you need any further clarification or would you like to know more about the company, please feel free to reach out to us or to CDR India. Thank you once again for taking the time to join us on the call and see you all in the next quarter. Thank you.

Thank you. On behalf of Usha Martin Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.