Usha Martin (USHAMART)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Low leverage with D/E of 0.09 and positive free cash flow of ₹203 Cr
• Decent capital efficiency: ROE of 15.23% and ROCE of 18.75%
• Strong financial health signals: Piotroski F-Score 8/9 and Altman Z-Score 4.30
• Reasonable historical expansion: 5-year revenue CAGR of 10.62%
• Promoter holding of 40.52% provides some alignment with minority investors

Concerns

• Expensive valuation: P/E of 28.50, P/B of 4.86, and EV/EBITDA of 36.12
• No margin of safety: price of ₹439 is above Graham Number of ₹167.14 and DCF value of ₹355.61
• Growth is decelerating: latest sales growth of 5.89% and profit growth of 1.58%
• Cyclical iron and steel industry with a low dividend yield of 0.72%

AI Analysis

Let me start with what I like. Usha Martin's balance sheet is in good shape: debt-to-equity is only 0.09, and it generated ₹203 Cr of free cash flow. ROCE of 18.75% and ROE of 15.23% show capital is being put to work reasonably well. The Piotroski score of 8/9 and Altman Z-score of 4.30 reinforce that this is not a company in financial stress. In an asset-heavy cyclical industry, that matters. But I am in the business of buying value, and value is price times quality. At ₹439, I am being asked to pay 28.5 times earnings and 4.86 times book value. For a company with latest sales growth of just 5.89% and profit growth of only 1.58%, that is a high price. Five-year revenue CAGR of 10.62% is decent, but the present quarter does not show acceleration. The Graham Number, a conservative measure of intrinsic worth, is ₹167.14; even the DCF value of ₹355.61 is below the current share price. My margin of safety is negative—approximately minus 150% relative to Graham. That is not the way I like to enter a position. Steel is inherently cyclical. Good times do not last forever, and paying an expensive multiple near a cyclical peak is a common way to lose money. The dividend yield of 0.72% gives me almost no income while I wait. Promoter holding of 40.52% is acceptable, though not a commanding sign of alignment. This is a decent business at the wrong price. I will put it on my watchlist and wait for either a lower price or a sustained improvement in growth and profitability that justifies the premium. In investing, discipline is the difference between speculation and investment.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer