USHAMART - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

🧵 Fundamental Analysis of Usha Martin Ltd (USHAMART)

✅ Strengths

Solid Return Metrics

ROCE: 18.8%

ROE: 15.8% — both strong indicators of efficient capital use and profitability

Healthy Financials

Debt-to-Equity: 0.15 — low leverage, financially sound

EPS: ₹13.4 — decent earnings base

PAT Qtr: ₹101 Cr vs ₹92.3 Cr — sequential growth despite YoY dip

Valuation Comfort

P/E: 28.5 vs Industry PE: 23.8 — slightly above average, but justified by return metrics

PEG Ratio: 1.86 — reasonable for a mid-cap industrial player

Technical Momentum

Price above DMA 50 (₹352) and DMA 200 (₹341) — bullish trend

MACD: +9.02 — positive momentum

RSI: 59.3 — approaching overbought, but still in safe zone

Institutional Interest

DII Hold ↑ 1.81% — strong domestic investor confidence

FII Hold ↑ 0.04% — marginal but positive

⚠️ Concerns

Dividend Yield: 0.79% — modest, not ideal for income-focused investors

Valuation Premium

Book Value: ₹90.3 vs Price: ₹378 — ~4.2x book, premium pricing

Quarterly Profit Dip (YoY)

Qtr Profit Var: -5.03% — needs monitoring for trend reversal

52w Index: 58.0% — underperformance from 52-week high

📉 Ideal Entry Price Zone

Entry Zone: ₹340–₹360

Near DMA 50 and 200

Offers technical support and valuation comfort

🧭 Long-Term Investment Outlook

Usha Martin is a strong long-term candidate, especially for investors seeking exposure to industrials and specialty steel products. Its high ROE/ROCE, low debt, and improving earnings make it attractive for compounding.

Holding Period: 3–5 years

Reassess if ROE drops below 12% or PEG exceeds 2.5

Monitor global steel demand and margin trends

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹440–₹450

Near 52-week high and psychological resistance

Full Exit

If ROE drops below 12% for 2+ quarters

If PEG ratio rises above 3.0 without earnings growth

If price breaks below ₹330 and fails to recover

Reinvest: On dips near ₹340 if fundamentals remain strong

Would you like a comparison with peers like Ratnamani Metals or Ramkrishna Forgings to explore better industrial mid-cap plays?

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