Multibagger stock trading 114% above 52-week-low declares 250% dividend: Do you own?

A mid-size firm called Usha Martin closed on Friday with a market worth of ₹6,500.14 Cr. Among the top wire rope producers worldwide is Usha Martin. Usha Martin has production plants for wire rope in Ranchi, Hoshiarpur, Dubai, Bangkok, and the UK since 1960. One of the largest factories for wire rope in the world is Usha Martin's Ranchi location. 

The Board of Directors have “recommended Dividend of Rs. 2.50 (Two Rupees Fifty paise only) per Equity Share of Rs. 1/- each (250%) to the Shareholders for the financial year ended 3pt March 2023. The dividend recommended by the Board of the Company is subject to approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company and will be paid as per applicable guidelines,” said Usha Martin in a stock exchange filing.

Usha Martin Ltd. has issued 13 dividends since August 7, 2001, according to Trendlyne statistics. Usha Martin Ltd. announced an equity dividend in the amount of ₹2.00 per share during the financial year ended March 2022. This generates a dividend yield at the current share price of ₹213.30 of 0.94%.

In FY23, operating revenue reached Rs. 3,267.8 crore, up 21.6% YoY. Revenues for Q4FY23 were Rs. 855.2 crore, a rise of 11.6% YoY. In FY23, operating revenue reached Rs. 3,267.8 crore, up 21.6% YoY. Revenues for Q4FY23 were Rs. 855.2 crore, a rise of 11.6% year over year. The revenue success for FY23 was primarily driven by international operations, which saw a 34% YoY growth. Usha Martin said it reported an increase in revenues on account of improved realizations driven by value-added and solution-based offerings.

Operating EBITDA for FY23 grew 33.8% YoY to Rs. 513.3 crore from Rs. 383.7 crore in FY22. Operating EBITDA was Rs. 154.0 crore in Q4FY23, up 44.3% YoY whereas operating EBITDA margin was 18.0% in the quarter ended March 2023. EBITDA margins with other income were 19.3% in Q4 FY23 compared to 14.7% YoY. The company said its success in margin performance was driven by strong focus on value-added products, along with efforts to enhance operational efficiencies and productivity.

PAT for FY23 rose by 20.3% YoY to ₹350.6 crore from ₹291.4 crore in FY22. In Q4FY23, PAT stood at Rs. 105.3 crore as against Rs. 108.7 crore in Q4FY22. Basic EPS for FY23 was Rs. 11.51 compared to Rs. 9.56 for FY22.

Commenting on the performance, Mr. Tapas Gangopadhyay, Director said “We have ended the year on a strong note, delivering healthy revenue and operating EBITDA growth of 22% and 34%, respectively, during FY23. Our international operations, which made up 55% of our FY23 revenue, registered an exceptional 34% year-on-year increase in revenue. The Company not only made substantial progress in growing its international presence but also made significant strides in other strategic initiatives, including increasing its value-added offerings, expanding its global distribution network, diversifying its product portfolio and modernizing its facilities.”

“The ongoing strategic focus on expanding our presence across diverse critical applications and valueadded solution-based offerings largely enabled us to achieve an operating EBITDA margin of 18% during Q4FY23. We are also pleased to report that the Company has made notable progress in the modernization and expansion programme of its production facilities at Ranchi, with a specific focus on value-added products such as mining ropes, non-rotating ropes, compacted ropes and plasticated ropes,” said Tapas Gangopadhyay.

“Looking ahead, we believe that Usha Martin has all the elements in place to capitalize on the increasing demand for its products, both in international and domestic markets. Our robust in-house manufacturing and R&D capabilities, strong brand recognition, diverse product portfolio, expansive global network and healthy balance sheet continue to position us well for growth. We are confident in our ability to leverage these strengths and remain committed to delivering value to our customers and stakeholders,” Tapas Gangopadhyay further added.

On Friday, the shares of Usha Martin closed on the BSE at ₹213.30 apiece level, down by 2.80% from the previous close of ₹219.45. The stock touched a 52-week-high of ₹228.55 on (06/04/2023) and a 52-week-low of ₹99.45 on (20/06/2022), indicating that at the current market price, the stock is trading 114.47% above the 1-year low and 6.67% below the recent 1 year high.