Usha Martin Limited (UML) reported its Q1 FY11 results, which were slightly lower than our estimates on account of lower-than-estimated performance of the foreign subsidiaries. We reiterate our Buy rating on the stock on the back of robust volume growth expected in FY11, due to commissioning of additional capacity and complete integration on the raw material front, that is iron ore and coal. The additional capex plan of Rs 12,000mn on account of cost optimization projects warrants the Buy rating on the stock. We maintain our Buy rating on the stock though have revised the target price downward to Rs 103.3 from Rs 120 implying a potential return of 24%
