Dear Shareholders,
It gives me great pleasure to inform you that Usha Martin Limited has shown an
improvement in its operating results during the full year 2017-18, and more particularly
during the fourth quarter of 2017-18. Both businesses of the Company viz., Steel and Wire
& Wire Ropes (WWR) have witnessed a turnaround during the last Financial Year. Given
the strong fundamentals of the Indian economy and the industry dynamics, the Company is
expected to further improve its performance in the ensuing Financial Year
Macro-economic fundamentals of the Indian economy indicate a continued growth recovery
during the Financial Year 2018-19 with an estimated growth rate of 7.4%. The global
economy steadily growing albeit at a modest pace; larger economies like USA, EU and China
are growing at a lower rate than their respective trend growth rate. Some of the large
central banks across the geographies continue to pursue accommodative monetary policy,
while the US Federal Reserve has been gradually raising interest rates. Possible headwinds
to the global economy inter alia include a withdrawal of monetary accommodation at an
increased pace, a sharp rise in the price of crude oil and a possible trade war between
USA and China. Besides this the geo-political risks like an escalation with Iran and/ or
North Korea may unfold significant risks to a peaceful growth.
Sectors relevant to the Company's businesses like commercial vehicles, tractors, and
infrastructure have shown robust growth in the last year and continue to indicate promise
for continued strength. According to World Steel Association (WSA) China has shut down
most of the Induction Furnace based steel capacities during the year 2017, which together
with better domestic demand in China has helped balance the global steel demand-supply
scenario leading to improvement in steel realisations. According to CRU, China is also on
track to further cut down its steel capacities to bring it below 1 billion tons by 2020
(from 1.2 billion in 2015), which is expected to keep global steel markets balanced
considering a moderate growth in aggregate steel demand. WSA expects the steel demand in
India to grow at a healthy rate of 5.5-6% over 2018-19. It would therefore be reasonable
to expect the buoyancy in steel continuing for some time. WWR Business has also witnessed
strong demand revival in most of the end-use sectors except offshore oil and gas segment.
Your Company in the meantime has been working actively to bring about improvements in
operational efficiencies to reduce conversion cost. It is also focussed on enriching the
product mix in order to improve profit margins. It is an ongoing journey and we continue
to be optimistic about the future of the Company. In order to improve the long term
financial health of the Company, the management is also endeavouring to reduce leverage on
the Balance Sheet by divesting one of the core businesses of the Company.
I gratefully acknowledge and thank all shareholders, lenders, vendors, employees and
other stake-holders in this difficult time for their unstinted support. We shall continue
to put in our best efforts to ensure a bright future for our Company.
G N Bajpai
Chairman
Date: 21st May, 2018