Jupiter Wagons Ltd Q1 FY25 Earnings Conference Call Insights

Key highlights from Jupiter Wagons Ltd (JWL) Q1 FY25 Earnings Concall

• Financial Performance
  • Total income reached INR90,219 lakhs, a 19% year-over-year increase.
  • EBITDA grew to INR12,886 lakhs, up 32% with margin improving to 14.4%.
  • PAT increased by 40% to INR8,923 lakhs, with margin growing to 9.9%.
  • Consolidated EBITDA margin of 15.5% was achieved despite challenges.
  • Order book stood at INR7,2834 lakhs as of June 30, 2024.
• Jupiter Electric Mobility
  • Completed a 26-month trial of 11.2 kilowatt lithium and LFP battery pack for rail coaches.
  • Secured purchase order for LFP auxiliary batteries for Vande Bharat train sets from Siemens.
  • Received ARAI approval for commercial production of one-ton, four-wheel electric LCV, JEM TEZ.
  • Production set to begin in October with initial plan of 500 vehicles in the first year.
• Bonatrans Acquisition
  • Acquired majority stake in Bonatrans India Private Limited in March 2024.
  • Bonatrans reported 5-fold increase in revenues to INR7,436 lakhs for fiscal year 2024.
  • EBITDA rose to INR930 lakhs with 12.5% margin, PAT reached INR702 lakhs.
  • Aim for turnover of approximately INR400 crores from BIPL for FY2024-25.
  • Plans to expand BIPL’s capacity to machine 28,000 wheelsets in FY25 and up to 40,000-50,000 by FY26.
  • Selling wheelsets to Indian Railways for LHB and Vande Bharat applications, and to metro players.
  • Target to manufacture around 1 lakh wheelset annually, expected completion by 2027.
• QIP Success
  • Successfully completed qualified institutional placement, raising 800 crores.
  • QIP received overwhelming response with total demand reaching approximately 2,800 crores.
  • Raised capital to be primarily used for establishing forged wheel and axle manufacturing plant.
  • Initiative aims to enhance backward integration and support long-term growth.
  • Creates opportunities to expand into the export market, strengthening growth and market presence.
• Order Pipeline
  • Current order book stands at close to INR7,000 crores.
  • Indian Railways is undertaking major expansion of track network.
  • Railway freight traffic has grown over 5% and is close to 1600 million tons.
  • Expected wagon demand from Indian Railways is above 30,000 wagons.
  • Private sector demand continues to be robust.
  • Company has started supplies for new specialized wagons like fly ash wagon and auto rake.
  • Developing further new designs to improve demand flow and margins.
• EBITDA Margins
  • EBITDA margin is nearly 2% higher than the previous full year.
  • Management confirms these margins are sustainable.
  • Wheel business and breaking business expected to contribute significantly to margins.
  • Deliveries of specialized wagons expected to yield better margins.
  • Increasing wheel capacities in Bonatrans will positively impact margins.
• Capacity Expansion
  • Company is targeting to achieve sales of 10,000 plus wagons this year.
  • Focused on increasing foundry capacity and backward integration.
  • Adding 1,000 tons of foundry capacity by the end of Q3 FY24.
  • No delays in expansion plans; on track to complete by October as previously guided.
• Battery Technology Plans
  • Plans for backward integration in battery technology.
  • Currently focusing on developing the right technology and getting certified.
• EV Business Update
  • Company has received approvals from ARAI for their electric vehicle.
  • Commercial production set to start by the end of October.
  • Vehicles will have more than 80% localization.
  • Products will be eligible for government subsidies.
  • Vehicle targets last-mile connectivity with a significant price advantage.
  • Initial focus on B2B segment, particularly aggregators.
  • Discussions ongoing with potential customers to build order book.
  • Company aims to produce 500 EV units in the current financial year.
  • EV sales expected to begin in Q3.
• Break Segment
  • Company expects to receive licenses from railways shortly for Stone India.
  • Infrastructure upgraded for production.
  • Commercial production expected to start in the next couple of months.
  • Current order book for DAKO business is close to INR150 crore.
  • COVIS business adding incremental orders every month.
  • Company maintaining target of 200-250 crore revenue for FY24-25, including Stone India.
• Wagon Production Outlook
  • Company maintains confidence in sustaining 15% EBITDA margins.
  • Expect margin improvements as other businesses contribute more.
  • National Rail Plan projects demand for 400,000 rolling stock wagons in next five years.
  • Government commitment to infrastructure spending supports positive outlook.
  • Company targets production of 10,000 wagons for the current year.
• Container Business
  • Experiencing significant demand, especially for data center and battery containers.
  • Current capacities fully utilized, planning to enhance production capacity.
  • Focused on value-added containers, no longer taking orders for marine containers.
• Wheelset Manufacturing
  • Ramping up capacity to 30,000 wheelsets by year-end.
  • Initially focusing on domestic market before considering exports.
  • Expecting INR300-400 crore in revenue for the current year.
  • Targeting INR3,000-4,000 crore in revenue once fully integrated.
  • Margins expected to exceed 15% after complete backward integration.
  • Majority of exports to begin after setting up forging facility.