Jupiter Wagons Limited (JWL) Earnings Call Transcript & Summary

And we look forward to a much better numbers and performance. Thank you.

[Operator Instructions] Our next question comes from the line of Sarang from Vimana Capital.

Yes. So, on the BESS side, how much is your capacity? And how much have you invested for it?

So on -- see, on the BESS side in terms of investments, in terms of capacities, we have built significant capacities. So, we are looking in terms of capacity. I can -- we can easily do about close to 40 to 50 megawatts of their systems on a monthly basis. So, capacity is not a constraint right now for us, and we continue to invest in the same. But currently, since it's -- the whole business is at the incentive stage and the technology also relatively new in India, because most of the BESS systems that you look in India is still getting imported from China and other parts of the world. So, but in the next 6 to 8 months, definitely, our volumes will -- on the BESS supplies will improve significantly. And -- but we have enough capacities to take care of the order books, which we expect.

And the investment that you have made for that capacity?

So, in terms of the investment numbers, again, very difficult for us to say, because it's part of the complete integrated capacities which we have, because a lot of the capacities are shared capacities. So, it would be very difficult for me to pinpoint any kind of investment numbers for that.

Got it. And currently, what's the realization for these BESS containers per megawatt per se, and compared to China, how is it -- are you competitive compared to China?

Yes, yes, we are definitely competitive, and that is the reason we are getting significant order book, not only in India. Right now, we are executing export order books also and which is also growing. So definitely, we are competitive. And as our volumes increase and we get better integrated in the next 3 to 6 months, as I mentioned, that we are developing both our own BMS as well as EMS, which are, again, a significant step for us. So, as we get more integrated, our volumes increase. We will keep on getting more and more competitive.

Got it. And the realization on BESS per megawatt or per container, how much is it currently?

See, so we enjoy decent margins on the -- again, it's -- right now, it's a very -- we would not like to -- in terms of the margins, as I've said that it's a business which just started. And so, maybe by next -- in the next 3 to 6 months, we'll be able to give you a clear view on the margins. But definitely, I can say that it's a margin accredited business, and the margins are going to be as compared to the margins we enjoy in other businesses.

Got it. And just one last question. Are you currently focusing on the utility scale energy storage or more on the C&I where your product will be used to replace the diesel generator or power backup?

So, we are focusing on both the segments, C&I as well as the utility scale. But definitely to start with, yes, our focus is more on the C&I segment. And in the slide itself, the market opportunity is huge, and we are -- so we see a big opportunity there. On the grid -- on grid scale also, we are focused, but I think that could once we are -- in terms of the technology and size which we are mature, I think that is when we are going to start focusing on the grid scale BESS opportunity. But initially, our main focus is on the C&I.

Got it. But is there enough interest, because what I have heard from a few small businesses is that, diesel generator is much more flexible, is much more reliable than batteries. So, there was some kind of acceptance or knowledge related, like people don't know yet about the batteries. So, is there any challenge or there is a ready acceptance of battery storage over diesel generator?

No, no. I think that is not the case right now. Acceptance is very strong, and it's not just diesel generator. There are other significant opportunities, which we are there, which I cannot divulge right now, which we are already working on and which is something where there was not -- the BESS is the only solution, which is available. So, we don't see any kind of challenge. Adaptability is very strong. And I think this business in the next 2 to 3 years is going to scale up very, very strongly. And we have a huge advantage because today, I think in India, we are the only -- we are one of the first companies who have delivered and proven BESS systems. A lot of people have announced, but till now, nobody has been able to deliver and prove their systems.

Right. So, the other ancillaries in the BESS container PCS, power at invertor, and HVAC that you are sourcing from the Indian -- other Indian suppliers, right? And you are assembling the cells into battery packs? Am I right?

Mainly -- where we are importing is mainly on the cells. But besides the cells, everything else for us is mainly all indigenous and a lot of it is also in-house for us. So it's a mix of everything.

Thank you. [Operator Instructions] We have a follow-up question from Sahil Patani from Strokes Capital.

Thanks for that. I just wanted to kind of go over the guidance that we had given in one of our previous con calls, I think, Q3 FY '25, we said that we'll be doing INR 5,000 crores of top line by FY '26. Do you think we will still be able to meet that?

So, unfortunately, I don't think we will be able to do it, because in Q1, we faced significant headwinds because of the wheelset issue. Q2 definitely as you could see, there's an improvement. But the first month of Q2, again, there was a challenge. So, we will try to make up a lot of ground, but again, if you ask me what will be our revenue numbers by end of this year, I think very difficult for me to give you a very clear picture. But definitely, we will try to make up significant ground. But definitely INR 5,000 crores is something, unfortunately, we will -- I don't think we'll be able to reach those numbers.

Okay. And I think...

Overall, we are looking to maintain the margin guidance which we have given. So we are still very hopeful that we will be able to achieve the margin guidance.

Okay. And what would be our wagon number for this entire financial year?

Again, as I've told you, right now, they're very difficult for me to give, because we are already striving to improve our deliveries and try and achieve the revenue guidance which we have given. So, maybe by end of next quarter, I'll be in a better position to give you in terms of the guidance for the entire year.

Okay. Okay. And just in terms of the order bid pipeline, are there any like tenders floating by the Indian Railways? Or what's that pipeline looking like for this financial year?

So, Indian Railways -- There are tenders which are Indian Railway keeps on floating. So this year itself, Indian Railway has floated tenders for close to I think 5. I don't know the exact number, but maybe close to 5,000 to 6,000 wagons. And definitely, we expect the big tender to come from Indian Railway anytime. I think it got delayed because again, the outstanding order book, if you look at the industry level is still significant. So, I think when those -- the order books get executed, which we expect by early next year, a substantial portion of that order books will get executed. I think that's when we expect the tenders to also come out.

[Operator Instructions] Our next question comes from the line of Ashit Kothi an Individual Investor.

Sir, one small question. I mean, say, while we are having multiple JVs and new products and everything, which is the most exciting business part which the company as well as a person who is running the whole show, which part of the business is really looking very, very exciting?

Okay. Yes. Thank you. See, for me, it's -- they are all my babies. So you cannot distinguish which is a better baby for you. All the businesses are very exciting, and we would not be in a business if we did not find it to be very exciting. So definitely, I think all the businesses which we are into are showing very, very significant growth momentum, and there is a lot of opportunities which are there. Some businesses such as our wagon business definitely or the commercial vehicle business, they are much more mature. In terms of the other businesses, such as the wheelsets containers, there we see a lot of revenue opportunities because we have now become significant players there, and we are putting up substantial capacities also. And definitely, on our EV, the electric vehicle, as well as the battery business, I think there, in India as well as globally, that the growth opportunity is very, very significant. I think in the next 2 to 3 years, especially in India itself, you will see about 2,000%, 3,000% growth in those businesses because today itself also a significant amount we are importing. So as you saw the inflection happening on the solar side, where most of the -- if you look at 3, 4 years back, a majority of solar panels, everything was imported. And then today, if you look at it, it's mainly all domesticated and all the solar companies have gone through a huge transition. So, similarly, you will see happening on the battery business also. So definitely, overall, we are -- and we have a very, very strong head start in that business. We have built in significant resources, talent. We are now scaling up those businesses. So definitely, I think next 2 to 3 years, there will be a huge opportunity in all these segments.

So in a way, you mean to say, sir, Jupiter realization mobility could possibly even in terms of growth, surpass other divisions with a big margin?

Yes, definitely, going forward, the way the sector is panning out, you could definitely see a lot of expansion in that sector. Because all the -- a lot of the significant -- if you look at people like Reliance, the Adani, Tata, they are all now entering that business. So you can understand the kind of scale, which is going to happen in that business. And there is enough opportunity for everybody because it's -- that business is in its infancy in India.

Okay, sir. And wish you all the best for coming quarters, and we hope we achieve a better capacity utilization with our installed capacity.

[Operator Instructions] Ourr next question comes from the line of Sandeep Mukherjee from SKP Securities Limited.

Sir, what would be the wagon order book like backlog wagons to be executed currently and for Q2 FY '26?

So, in terms of numbers, the wagon order book, I think it stands close to over 11,000 to 12,000 wagons, roughly. I cannot tell you the exact number of wagons, but close to about 12,000 wagons. In terms of size, it is close to about INR 4,000 crores.

The next question is from the line of Ativ, an Individual Investor.

I just had a kind of not a philosophical question. I just wanted to get your view on something. We have the national rail plan, the national electricity plan, we had an unprecedented push in railways in the last 2, 3 years and so. And as you've stated, our complete policy statement is that we'll try to get 50% of our revenues from non-wagon businesses going ahead. But for that 50% revenue which we still want to do from the wagon business, I know we have a very strong order book on the private side. Do you -- I mean, how is the industry pulse? Do we see -- I know new tenders are coming up, but do we see this push tapering off anytime in the near future, like by the time maybe a wheelset plant comes online? And then if that happens, do we have optionalities to export our wagons? I know we're going to export wheelset. But just thinking ahead, I mean, just -- I know you can't predict the government, obviously, but just wanted to get your thoughts on kind of like the whole way we are thinking about this..

See, honestly, for us to predict ahead, as you rightly said, is very difficult. But if you see not only the national rail plant, but overall, the national growth plan, and so the government is pushing infrastructure a lot. You are looking at a lot of coal-capacity buildup, which is happening, especially on the steel side, on cement. In terms of now there is again a concerted push towards building up more thermal power plants also, which was not there earlier. So I think definitely, if you look into the future, definitely, I don't see any lack of opportunity because again, by 2030, government stated position is that we would be a $5 trillion-plus economy. So we are looking at significant growth rates. So, to achieve those growth rates, definitely, the logistics sector is going to play a very, very critical role and the logistics sector is going to expand -- has to expand dramatically, to achieve those growth targets. And from Indian Railways, also, we are seeing, as you have seen that Indian Railway continues to expand its railway network and modernize it. There's significant investments which are happening. This year, itself, railway has announced more than I think INR 70,000 crore, INR 80,000 crores of investments in new railway lines and in modernization. So, if you look into the future, I think the opportunity is huge. There is no question about that. So, we don't see any challenge in terms of the future opportunities, because otherwise, we don't see the country growing the way it is stated to -- projected to grow, because logistics has to play a crucial role there. There could be small hiccups, minimum 6 months, 1 year hiccup, which could happen in the growth rate story. But otherwise, we don't see much of a challenge.

Right, sir. And like I said, do we -- have we considered the optionality of doing wagons for Europe instead of just wheelset and also the metro side?

I see, again, complete wagon exporting is not possible because of the entire sheer size and the volume of a wagon is considered. But the opportunity always lies on the component side, and that is where we are focusing on. So, you don't need to export a complete wagon, but if you focus more on the components such as the brake systems, the wheelsets, and other components, which we are focusing on, I think that itself be a big opportunity and will be both revenue as well as margin accretive to the business.

Yes, that makes sense. And just a word on metros. Are we doing anything? I mean, have we pushed further in Metros?

We are focusing on that segment. And maybe before end of this financial year, we may make some announcements on the same.

The next question is from the line of Sudeep Anand from Systematix.

Sir, in the wagon segment, though we are waiting for the big order from Indian Railway, but how is the scenario and the order trend from the private players during the quarter? Are you seeing any slowdown or the uptrend is still intact?

So, on the private side, we don't see -- I don't see a slowdown. I think the -- as you are seeing it, see from our numbers also that our private execution is quite strong. And if you see the announcements also we make, and if you'll see -- we keep on adding private order books to our portfolio. So, we don't see a slowdown, but definitely, railway -- Indian Railway tenders are very, very critical because that provides the main volume. So, that is definitely needed. But on the private side, the outlook remains to be quite positive. But definitely, it has to be matched with significant numbers from Indian Railways.

Right. And sir, secondly, on the -- what's the current status on -- of Stone India and when you're expecting it to commission?

I think Stone India -- by last quarter, Stone India, we expect the commissioning to happen. Because our final trials are going on and we are in the process of getting the final certification also done from Indian Railways. So, next year, you will see significant revenues coming from Stone India. Next year, definitely Stone India is also going to become even PAT positive, I'm very confident on that.

And sir, lastly, on the JV side. So still we are seeing marginal negative contribution from all the JVs. So, any thought on that when we are expecting it to turn around and see the positive contribution?

So, I think right now, the only JV which is negative in terms of contribution is Dako, I think, rest all the JVs are on are positive in terms of contribution. In terms of the subsidiary, as I mentioned, that the Electric Mobility business, next year we are going to definitely be EBITDA positive and may be PAT positive also. As I mentioned, Stone India also would be similar. Our wheel business is already showing quite good revenues and margins. So, I think that was the only business and that also next year, we expect that to also turn positive. So, I don't see any -- on the subsidiary side, I think, any challenges. Obviously, these are all new subsidiaries, you had to give them some time. Now they have all matured, I think FY '27 onwards, these will start now showing quite good traction.

Thank you. We have no further questions, ladies and gentlemen. I would now like to hand the conference over to the management for closing comments. Over to you, gentlemen.

Thank you. While we have started off FY '26 with a few challenges, especially with wheelset supplies, we have regained momentum and are confident of our performance through the rest of the year. With a strong foundation, strong order book and a future-ready portfolio, we have multiple levels for growth. Our focus remains on scaling efficiently, innovating and delivering consistent value to all our stakeholders. Thank you for your continued trust and support. We look forward to updating you in the coming quarters. Thank you.

Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.