JWL - JUPITER WAGONS LIMITED Share Price

Management's outlook for FY26 reflects confidence in operational improvements and strategic growth initiatives. For the fiscal year, Jupiter Wagons Limited (JWL) aims for a target of manufacturing approximately 10,000 wagons, contingent on the regularization of wheel set supplies from Indian Railways, which is expected to resume by mid-June 2025.

On financial projections, they anticipate steady revenue growth, projecting an overall increase of around 10% to 15% in FY26, with revenue targets set to double in the brake systems and wheel set segments. The focus on expanding the electric light commercial vehicle (eLCV) production is underscored, with expectations to average over 100 vehicles sold monthly within a few months.

Key financial metrics highlight JWL's strong performance in FY25, achieving a total income of Rs.3,905 crores, an 11.6% increase in EBITDA to Rs.548 crores, and a PAT margin of 9.6% with a total profit after tax of Rs.373 crores. They expect an EBITDA improvement, maintaining a margin around 14.5% to 15% in FY26, with potential for further enhancements as new business segments scale up.

Significant capital investments, including the Rs.3,500 crores Odisha project, are highlighted as pivotal for future growth, with targeted annual revenues from it expected to reach Rs.3,000 crores by FY28, illustrating expected returns on capital over 20%. Management is optimistic about the demand in both the railway sector and new ventures in battery production and eLCVs, contributing to an integrated growth strategy in sustainable mobility solutions.

Q&A Section from the Earnings Transcript

Question 1: "Is the constraint on wheels easing out as we enter FY26 or has the wheel situation impacted our Q4 execution?"

Answer: Yes, we did face some constraints on wheel availability during Q4 and even into Q1 of this fiscal year. However, we expect that by mid-next month, railways will regularize supplies due to orders placed for axles from global firms. We're hopeful that the situation will stabilize as we focus on executing our private orders, which our subsidiary has been able to fulfill.

Question 2: "For FY26, what kind of wagon manufacturing can we expect given the ongoing wheel situation?"

Answer: We target to manufacture about 10,000 wagons in FY26. Given the railways' commitment to regularize wheel supplies from mid-June, I am confident we will meet these commitments, provided the wheel situation remains stabilized.

Question 3: "How is the industry addressing the recurring wheel set shortage?"

Answer: Jupiter has a strong order book from the private sector, allowing us to execute orders without constraints. However, for railway wagons, we rely on the wheel set supplied by the railways. To mitigate future shortages, investments are being made in the private sector for wheel manufacturing capacities.

Question 4: "Regarding the CAPEX on wheel sets, what kind of ROC do you expect from this investment?"

Answer: We expect an ROC of above 20% from this project, which is higher than our current ROC of about 17.5%. This project is anticipated to improve the ROC as exports increase over time.

Question 5: "Can you provide guidance on revenue targets for FY26 across segments?"

Answer: For railway wagons, once the wheel set situation stabilizes, we anticipate achieving our targets. Our internal wheel production has done well, with revenues above Rs.300 crores this year; we expect this to double as we ramp up capacity. Brake systems should also perform strongly, with revenue projections of around Rs.150 crores.

Question 6: "Are you expecting large railway orders this year?"

Answer: Yes, we do expect significant tenders from the railways to emerge this year. While current supplies are limited, we believe that the latter half of the year will introduce new opportunities.

Question 7: "What overall revenue growth are you projecting for FY26?"

Answer: For FY26, we're looking at a target close to 10,000 wagons if wheel supplies improve. Given the multiple business streams, including battery supply and brake systems, I expect a solid increase in overall revenues.

Question 8: "What kind of EBITDA margins are expected for FY26?"

Answer: We anticipate EBITDA margins will remain stable in the 14%-15% range, with potential improvements as new businesses mature, particularly in the battery and brake systems.

Question 9: "What is the status of your partnership with Tatravagonka?"

Answer: Tatravagonka is not a passive investor; they are a promoter and actively participate in various projects, including the upcoming Odisha facility. We have agreements for offtake from this facility, which will boost our collaboration moving forward.

Question 10: "Can you elaborate on the battery business roadmap?"

Answer: The battery storage market is growing rapidly, with government mandates for solar parks requiring storage capacities. By 2030, this market in India could reach close to 10 GW. We're aiming to localize production to meet this demand effectively.

These questions and answers reflect the major concerns and directions from the earnings call, with a focus on production capabilities, revenue guidance, and strategic partnerships.