Jupiter Wagons Limited (JWL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '26 Earnings Conference Call of Jupiter Wagons Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prathmesh Kamath from Systematix Group. Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. Thanks for joining us today for the Q1 FY '26 earnings call of Jupiter Wagons Limited. On behalf of Systematix, I would like to thank the management for giving us the opportunity to host this call. Today, we have with us Mr. Vivek Lohia, Managing Director; and Mr. Ritesh Kumar Singh, Company Secretary. Now I would like to hand over the call to the management for their opening remarks, and then we can open for Q&A. Thank you, and over to you, Vivek, sir.

Thank you, Prathmesh. Good afternoon, everyone. Thank you for joining the call to discuss our performance for the first quarter ended June 30, 2025. During the first quarter, we faced challenges from continued short supply of wheel sets from Indian Railways. This has resulted in suboptimal plant utilization and consequently, production volumes during the quarter were substantially down. However, all other business segments and verticals have reported stable to increasing volumes. As a result of the reduced volume of wagons on a stand-alone basis, Jupiter Wagons reported a total income of INR 425 crores for Q1 FY '26 compared to INR 902 crores in Q1 FY '25, making a 53% decline. EBITDA stood at INR 51 crores, while profit after tax was INR 33 crores. On a consolidated basis, total income reached INR 476 crores with EBITDA at INR 60 crores and PAT at INR 31 crores. The supply of wheel sets has since got normalized and the company expects to recover lost production in the coming quarters. Even with these temporary challenges, our core railway business and emerging verticals continue to demonstrate resilience, supported by strong fundamental and consistent strategic execution. A key highlight for this quarter has been the progress of Jupiter Electric Mobility with production and sales having commenced. In June, we opened our first dedicated showroom in Bengaluru marking the start of our national retail footprint. We plan to open another 4 to 6 showrooms by September 2025. We have recently reached significant milestone of having completed dispatch of 50 vehicles and are looking to accelerate the production and deliveries. Further strengthening this effort, we signed MOU with Pickkup, a fast-growing logistics platform to deploy 300 JEM TEZ vehicles by the end of the year. This partnership aligned with the Government of India's PM E-Drive initiative reflects our ambition to accelerate EV production in the logistics ecosystem and support India's broader clean mobility goals through real-world scalable applications. With commercial EV demand rising sharply, projected to grow at a CAGR of over 40% through FY '30, driven by last mile and urban freight applications. This initiative strategically positions us in a high-growth policy-supported sector. Our battery division is generating 100% month-on-month growth. We have commenced supply to Siemens for Vande Bharat and other products have gone into development for other railway applications. JEM has developed BES systems for solar and mobile BES applications right from battery to container and irrigation. We already have early orders for some domestic customers and export orders for Africa for renewable applications. In the first phase, we are targeting DG replacement, energy shifting for peak demand usage for industrial and mobile BES for off-grid applications with the technology developed internally of which we already have pilot orders in hand from multiple well-known channels. The DG market in India is approximately INR 10,000 crores annually, which we feel will shift in 1 to 2 our backup segments to BES. All the limitations being put on net metering will further create opportunities in solar plus BES markets in this segment. In the second phase, we are looking on utility scale BES for increasing market in India, which is foreseen to be growing to 10 gigawatts of annual volume with approximately INR 8,000 crores to INR 10,000 crores coming out via utility players with delivery time lines of 2 years approximately. Currently, everything is getting imported and assemble systems from China, and we foresee with our battery and container joint capabilities to be well placed strategically to be a leading integrated manufacturing player in India. To support the above 2, we are installing and commissioning our battery module line in Indore in late September besides our already established Bangalore facility. In the wheel set business, we are witnessing quarter-on-quarter growth from Aurangabad unit and with capacity enhancement underway, we expect to achieve revenue of approximately INR 550 crores in the current financial year, which would further increase to around INR 1,000 crores next year. Regarding our wheel and axle project at Orissa, we have finalized procurement of all critical equipment and construction contracts. Work has commenced at the site and is progressing as per planned schedule. With the planned investment of INR 2,500 crore in phases, the facility will boost domestic manufacturing and support export capabilities. We are also implementing smart automation, including robotic welding, advanced NDT systems and real-time process analytics to ensure higher productivity and reliability across all our facilities. In terms of financial credibility, we are pleased to receive an upgrade in our long-term credit rating to -- from acute of AA with stable outlook, which reflects our strong balance sheet and prudent capital management. Our -- confirmed order book stood at INR 5,972 crores, offering continued visibility for the coming quarters. Looking ahead, our focus remains on disciplined execution, market diversification and innovation across rail and mobility segments. The Indian logistics sector is expected to grow to USD 500 billion by 2030, with rail modal share targeted to increase from current 27% to 40% under Gati Shakti. This structural shift represents a major opportunity for integrated solution providers like Jupiter Wagon. With a healthy order pipeline, expanded product capabilities and strong macro tailwinds in infrastructure and clean mobility, Jupiter Wagons is well positioned to deliver sustainable growth and value creation over the long term. We thank all our stakeholders for their continued trust and support. On that note, I would like to request the moderator to open the forum for any questions or suggestions you may have. Thank you.

[Operator Instructions] The first question is from the line of Sahil Patani from Strokes Capital.

Two-part question. So, I think in the previous con call, we had given a full year guidance of about 10% to 15% top line growth with EBITDA margins in the range of 14% to 15%. So, I wanted to understand if we'll still be able to meet that kind of a projection because we have -- because our margins have kind of contracted this quarter. So, if you could just provide some more highlights around that.

Thank you. So, we still maintain our guidelines, and we expect -- as I've already mentioned that July onwards, the wheel supplies have stabilized. So, we expect that in the last 2 quarters, we'll make up a lot of the lost grounds, which we had in the first quarter. If you see that our overall margin per wagon sold has improved because we are supplying more on the private side now than to the railways. So, we don't see any challenges in terms of maintaining EBITDA margins. And also, as I mentioned in my call that the other business segments are now showing substantial revenues, so especially the wheel business, so that will also have a impact on both the revenues as well as the bottom line. So, I don't see a challenge in terms of maintaining the margins. This time, there was a contraction in the margins just on account of the reduced revenue. Otherwise, the overall margin per wagon, there has been an increase. There has not been a decline. So as soon as the numbers catch up, you will find increase in margins.

Understood. That helps. And my second question is, in terms of the order book and the order pipeline, are you seeing any more orders coming in from the Indian Railways? Like what's the outlook looking like? Because I recall in the previous con call, you had mentioned that we should see some more interest, some more order bid pipelines coming in over the next few months. So just wanted to get a broader picture on that.

So from the private sector, we continue to receive sizable orders. We recently announced the orders which we received from GATX. So there, we don't -- we see a continued pipeline. On the Indian Railway side, as I mentioned earlier also in the third, fourth quarter, we expect railways to come up with new tenders because still there is a lot of previous supplies which are pending with Indian Railways. And so, we expect definitely tenders -- substantial tenders to -- should be coming in the third or the fourth quarter from the railways.

Okay. So we are expecting them to come in over the next couple of quarters?

Yes. That is the expectation given the way the demand and the growth in the sector is shaping up.

[Operator Instructions] Our next question is from the line of Akash from Dalal & Broacha.

So I have 2, 3 questions. Firstly, Vivek sir, what are the total wagons in our order book currently?

Just hold on. The total number of wagons is approximately about 4,700.

4,700 okay.

Sorry, mistaken. Total number of wagons is approximately 11,500.

11,500, okay. And so, the order book that we have reported of INR 5,900 crores approx that does not -- it includes the INR 242 crore order that we received recently?

It includes the INR 242 crore orders.

Okay, sir. And sir, since you are saying that we are holding on to our guidance of almost around 10,000 wagons by the year-end. So that probably works out to almost from Q2 onwards almost it has to work out to around 1,000 wagons per month. I don't think we have operating at that scale earlier. So, sir, do we have the capacity in our foundry and our plant to be able to run at that scale at that pace?

No, we definitely have the capacity to go up to that scale. So -- and our target -- as I've told you our target this year was to scale up production, and we are already focused on that. The challenge is that the supply of wheel sets from Indian Railway has not been at par with our internal targets. But as I have told you from July onwards, things have improved, and we expect them to improve further. So as the wheel supplies improve, you will see that we are closer to achieving our targets.

So sir, will we be able to do more wagons than we did last year? I mean, do you have that positive view sitting today?

Definitely, that is what we are striving towards to achieve a higher growth rate compared to last year. And we have been supporting by our own production itself because though most of our production goes towards our own private requirement and requirement of others. But even during the last quarter, we have used more than 4,000 wheel sets from our own capacities to support our railway supplies. So, with -- I think from the railway side, if the supplies improve, I don't see a challenge why we should not surpass last year's numbers.

Understood. And sir, if you could-- since we are doing a lot of CapEx of almost around INR 2,500 crore and we also have debt on our books, I just wanted what are our internal estimates of the total interest cost that is finance cost and total depreciation that we'll be having on our books for FY '26 and '27, ballpark estimates will do, sir?

See, as of right now, if you look, we are still a net debt-free company. So, this -- in FY '26, you will have no major impact. See most of the CapEx expenditure will happen in FY '27 and which will --and interest is going to get capitalized because the repayment starts 2 years from start of production. So, the impact will be much later on. So immediately in the next 2 financial years, you will not see any kind of impact in terms of the INR 2,500 crores -- the debt which we'll be taking towards the new expansion.

So, sir the interest and depreciation level will remain more or less similar to FY '25 level? Is it what you mean?

So the depreciation would slightly go up, but interest would be -- I wouldn't see -- in both cases, you will not find any substantial kind of changes from last year.

Understood. And sir, last 2 questions from my side. Firstly, on the ELCVs that we do. So how many ELCVs have we sold in Q1? And how has the response been at the new dealer showroom that we have opened? And secondly, I wanted to understand on the brake systems part. I mean, I think we have reported around 9 brake systems that we have manufactured this quarter. So, I think now that Stone India and all of them are fully operational, why doesn't this part of our business grow as fast is what I'm trying to understand. Yes, that’s it

In terms of the ELCVs, we started supplies from June onwards. As I mentioned that we have already supplied more than 50 vehicles. We expect in the next 2 months further dealerships to open. So, by September end, we expect at least 6 dealerships across the country. We are now already in the process of getting all the financial tie-ups with all the major NBFCs as well as the banking institutions. So, we expect the growth numbers to be very strong on the ELCV side. So -- and plus, we are -- as I mentioned earlier also, we are in the process of launching 2 other vehicles, a 2-ton payload vehicle as well as in the 1-ton segment, another vehicle in the current financial year itself. So, with all these developments and with a strong dealer network, we expect the numbers to be very strong this year.

[indiscernible] you sold 50, is it? You started only in June?

June, yes. The supply started in June.

Okay. Okay. And if you could just clarify on the brake systems part.

So on the brake system, including our -- the Kovis JV as well as the Dako JV this year, we should do a business of more than INR 250 crores, as I've mentioned earlier. So because the way the tenders were -- on the brake systems, where the tenders were placed is that the supplies are going to be starting from next quarter onwards because most of our supplies are skewed towards end of the year. So that's how the tenders were put. On the brake disc, we have been supplying the brake disc regularly. On Stone India, as I’ve mentioned earlier also, we are still -- the final certifications are ongoing, and we expect production to start in the last quarter of this financial year.

Okay. Got it, sir. But what kind of margins we do on the brake side...

Our next question is from the line of Senthilkumar from Joindre Capital Services Limited. Our next question is from the line of Rajesh Bhandari from Nakoda Engineers.

[Foreign Language] that’s approximately INR 470 crores [Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Double decker what I mean to say is not open type, close type.

Close type we are already making. We’ve a substantial order book but that is part of a wagon revenues [Foreign Language]

[Foreign Language]

[Foreign Language] something which we may consider.

[Foreign Language]

[Foreign Language] Orissa facility should be online. So from FY '27, 28 if you look at, I think wheel should be close to about INR 3,000 crores in terms of revenue. So that would be significant -- as significant as the wagon revenues [Foreign Language] export also would be quite substantial. Then we expect in the next 2 to 3 years, [Foreign Language] started as well as the battery business, that should be a significant business. So that we are expecting that business to be upward of anything between INR 500 crore to INR 1,000 crore business for us by that time.

[Foreign Language]

Battery and vehicle included, the whole -- that entire segment would be anything between INR 500 crores to INR 1,000 crores.

Okay. And the value addition is better here. Margins also better?

Yes, definitely. especially on the battery side, we are seeing -- month-on-month we are seeing about more than 100% growth. And even the margins on the battery side is very, very strong for us.

[Foreign Language] everybody was suffering because of the wheel supply [Foreign Language]

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[Foreign Language]

[Foreign Language] And we have a partner in Europe who themselves [Foreign Language]

And one wheel set would be around approximately INR 4 lacs- approximately?

INR 3-4 lacs depending upon…

[Operator Instructions] Next question is from the line of Vasudev from Nuvama.

Sir, since we had this issue regarding wheel set availability, so was there an option open for us to import from China?

Yes. So, see, for the private supplies, which we do, we have enough capacity. And now for the railway orders, Indian Railway does not permit us to use wheel sets because they are -- as per the contract, they are supposed to supply the wheel sets. And there is also a pricing differential from the Chinese prices and the Indian prices. So, for the railway contracts, we have to depend upon Indian Railways. However, for our own -- for the private demand, we have enough capacity, and that's not a challenge. The challenge is on the railway side, which I think now Indian Railway is assuring us that henceforth things will be much better.