Jupiter Wagons Limited ($JWL)

Ladies and gentlemen, good day, and welcome to the Q4 FY '26 Earnings Conference Call of Jupiter Wagons Limited hosted by Systematix Group. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sudeep Anand from Systematix Group. Thank you, and over to you, sir.

Thank you, Farah, and good evening, everyone. Thanks for joining us today for Q4 and 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. Vinod Kumar Agarwal, CFO; and Mr. Puneet Saboo, Vice President. Now I'll hand over the call to the management for their opening remarks, followed by the Q&A session. Thank you, and over to you, Vivek, sir.

Yes. Thank you, Sudeep. Good evening, everyone, and welcome to Jupiter Wagons earnings call for the fourth quarter and full year ended 31st March 2026. We hope you've had an opportunity to review our financial results and investor presentation shared earlier. FY '26 was a year that tested the resilience of the entire rail and mobility ecosystem. The industry faced significant challenges, beginning with a prolonged shortage of wheelsets that constrained wagon production across the sector during the first half of the year. As these supply constraints gradually eased, such challenges emerged in the fourth quarter through global supply chain pressures, especially LPG availability disruptions arising from geopolitical developments. Despite these headwinds, Jupiter Wagons demonstrated resilience, agility and disciplined execution. While our financial performance was impacted by external factors, the year was marked by several strategic milestones that strengthened our long-term growth platform and positioned us to capitalize on opportunities across rail, mobility, logistics and clean energy. For FY '26, we reported a consolidated total income of INR 2,961 crores and a profit after tax of INR 166 crores. EBITDA stood at INR 363 crores, translating into a margin of 12.4%. During the fourth quarter, total income was INR 790 crores, EBITDA was INR 83 crores and PAT stood at INR 27 crores. While these numbers reflect the operational challenges experienced during the year, they do not fully capture the significant progress achieved, in strengthening our business portfolio and future growth capabilities. We enter FY '27 with an order book of INR 4,675 crores, providing healthy revenue visibility and reaffirming customer confidence in our capabilities and execution. Our financial position remains robust, supported by the reaffirmation of our credit rating by CRISIL at AA- stable for the long-term debt and A1+ for short-term debt. A major highlight of FY '26 was the performance of our wheelset business through Jupiter Tatravagonka Railwheel Factory. The business crossed INR 500 crores in revenue during the year while maintaining a healthy EBITDA margin of around 17%. We secured a strong order pipeline across freight wagons, LHB coaches, metro applications and Vande Bharat trains. Key wins included the Ministry of Railway order for 9,000 LHB axles, a letter of intent for 5,376 Vande Bharat wheelsets and multiple wheelset machining and assembly contracts. These achievements reinforce our growing presence in one of the most strategically important segments of the rail value chain. Moreover, we have signed a long-term supply arrangement with Tatravagonka, one of Europe's leading wagon manufacturers under which we will supply wheelsets for their requirements from our upcoming Odisha facility. This partnership represents a significant step in building our export business and validates our manufacturing capabilities. We are actively engaging with additional global partners to expand our international footprint and create long-term value for our shareholders. The Odisha Greenfield wheelset project continues to progress as planned. Odisha has -- orders have been placed for all critical equipment, deliveries have commenced and civil construction is at an advanced stage. Partial production is expected by end of the current financial year with full commissioning targeted by end of FY '28. The facility will significantly enhance our manufacturing scale while supporting both domestic and export demand. Our clean energy business under Jupiter Electric Mobility also recorded meaningful progress during the year. India's energy transition is currently -- is creating a substantial opportunity in battery energy storage, and we have invested strategically to build capabilities in this segment. During FY '26, we successfully developed and deployed modular battery energy storage systems in both 10-feet and 20-feet container formats for applications, including renewable energy integration, diesel generator replacement and mobile energy storage. To strengthen vertical integration and manufacturing efficiency, we commissioned a cell to battery manufacturing line in Indore, enhancing our ability to scale as demand grows. We are also pleased to sign MOUs adding to 110 megawatts of BESS -- in BESS business to our FY '27 order book. These partnerships validate the strength of our technology and reinforce customer confidence in our capabilities. Looking ahead, we aspire to build a INR 1,000 crore revenue business in batteries and energy storage over the next 3 to 4 years, supported by a growing order pipeline and favorable industry dynamics. Our container manufacturing business delivered healthy growth during FY '26. The government of India recently announced production-linked incentive scheme for container manufacturing supported by a INR 10,000 crore budgetary allocation, which provides a strong policy tailwind for the sector. Given our established capabilities and market position, we believe Jupiter is well positioned to benefit from this opportunity. Another important milestone was achieved through our subsidiary, Stone India Limited, which received RDSO approval for its -- for its freight brake system. Commercial production is expected to commence in July 2026. With this achievement, Jupiter Wagons has attained full backward integration across its core railroad product portfolio. This strategic milestone strengthens our control over quality, cost and delivery schedules, reduces dependence on external supplies and enhances our capability to navigate supply chain disruptions while supporting long-term margin improvement. Looking ahead, we remain optimistic about the opportunities before us. The Government of India's continuous focus on rail-led freight transportation and infrastructure expansion is expected to drive sustained demand across the rail ecosystem. With our integrated product portfolio, manufacturing capabilities, technology partnerships and execution track record, Jupiter Wagons is well positioned to capitalize on these opportunities. Passenger mobility is a strategic portfolio and priority for Jupiter Wagons, and we are preparing to enter passenger mobility segment in FY '27, backed by our deep manufacturing capabilities and technology partnerships, thus creating an important new avenue for growth and diversification. Today, Jupiter Wagons is evolving into a diversified mobility and infrastructure solutions company with a growing presence across rail, mobility, logistics and clean energy. Supported by a strong order book, expanding capabilities and a clear growth road map, we enter FY '27 with confidence and remain committed to creating sustainable long-term value for all our stakeholders. Thank you for your continued trust and support. I now request the moderator to open the floor for questions.

[Operator Instructions] The first question is from the line of Balasubramanian from Arihant Capital.

Sir, in the Odisha wheelset plant earlier, it was planned by Q2, I think Q2 FY '27. But right now, it's been extending to Q4 FY '27. So, if that production starts by Q4, for example, March 2027, what would be the ramp-up curve for wheelsets in that financial year, for example, FY '28? And secondly, if you could talk about wagon tenders, I think recently, we got information about 1 lakh wagons over the next 3 to 4 years' time frame, which is approximately 30,000 to 40,000 wagons per annum. And when it's likely to be rolled out by Indian Railway?

So regarding the Odisha project, the final commencement of the project is as per the timelines only which we had earlier mentioned. So, we were always very clear that it will commence in FY '28. There was a partial commencement, which was -- we had projected it to be about 2 quarters earlier. But due to the global supply disruptions. So the shipments got -- there were delays in the shipments arriving. And because of that, there were certain delays. But now, however, we received most of our shipments, so we do not foresee any further delays. With regard to the wagon orders, to exactly quantify the amount of order as well as exact timelines, again, it's very difficult. But however, we expect the orders very shortly. And within the next 2 quarters, we expect the order books to come out. And given Jupiter's strength and market share, definitely, we expect sizable order book. And our expectation is that the orders which would come out would be at least for requirements for Railways' requirements for the next 3 years. So given that, definitely, we expect it to be sizable, and we expect a strong market share in that.

Yes, sir. Sir, my second question is we are entering into passenger rolling stock in this year. What is the specific scope in this space, whether manufacturing complete LHB or Vande Bharat coaches or only Bogies or shells. If you could talk about the CapEx and time line of this process, whether it will be a separate JV or we have a strategic partnership? And how do we understand in this business over the long time?

So we are in the process of entering into a strategic partnership. However, at the current moment, it is very difficult for us to divulge specific details on that. It will definitely -- so whether it will be part of Jupiter Wagons or a separate JV, again, I cannot spell out right now. Our focus, I can -- will be specifically the metro segment, the new train orders, which Indian Railway comes out with and definitely also the export market. I think these are the specific segments which we are targeting. However, specific details, we will -- I'm not able to share right now.

Fine, sir. Sir, on the bookkeeping side, I think inventories increased to INR 769 crores to INR 1,079 crores, almost 40% jump. So what was the reason? And like, when we can expect a normalized inventory days?

So, there will be a rationalization in the inventory days. It was a short-term challenge, as I've told you because of certain disruptions, which we did not anticipate. So, the production as we had anticipated, we could -- the production timelines did not follow. So, there was a mismatch in inventory, but it will be -- I think the first quarter, there will be certain -- some disruptions because -- but now things have stabilized. I think in FY '27 from second quarter onwards, you will find much more stability.

[Operator Instructions] The next question is from the line of Sandeep Mukherjee from SKP Securities.

Sir, what is the pending number of wagons? And what is the number of private wagons executed for the quarter and FY '26?

The pending number of wagon is right now around 2,000 wagons is Indian Railways and about 5,400 wagons roughly is the non-Indian Railway order book, which is totaling close to about INR 3,100 crores. And what has been the execution...

Private wagon executed for the quarter, sir?

For the last quarter? We don't have that -- 1,347 is the total executed in the last quarter.

[Operator Instructions] The next question is from the line of Vikram Suryavanshi from PhillipCapital.

You talked about manufacturing subsidy from the government, the INR 10,000 crores. Can you share what is the percentage of subsidy we get? Is it like a value of the container or some scope of this subsidy? And what is our annual capacity in container manufacturing or any plans to increase further?

Okay. So the government has announced the policy, but they have not come out with the specifics. So unless the specific comes out, it is very difficult to say exactly -- how the subsidies are going to be in what nature. But what we can understand that it's quite substantial, and it could be in the range of 8% to 10% is what we believed to understand. But however, unless specifics come out, it is very difficult for us to mention. Yes. And definitely, as and when the PLI policy comes out, we will be expanding our capacities because as of now, we are only focusing on specialized containers and which will be definitely be expanded to marine containers also because that will bridge the gap between Indian and Chinese container prices. So, I think on -- because the PLI will help us bridging the gap. So, definitely, and we are already in talks with certain shipping lines. So, as and when the policy comes out and if it is as per the industry demands and the benchmarking which we have, definitely, you will look at -- we are looking at a major expansion in the business.

And what is our current -- so you said that focus is on specialized once the clarity on policy come, we can scale up the capacity. Is that right understanding?

Yes. It is very clear. We are already expanding our capacity, but we have already planned for a major scale up. But obviously, that is subject to the policy being in line as per expectations. And as I've already mentioned that we are already in talks with a few shipping lines, and these are advanced talks. So, as and when the policy comes out and it is in line with our expectations, definitely, it is something which we are looking forward to. However, the business continues to grow this -- in FY '27, our expectation is that we'll be doubling our container revenues from last year.

Okay. And just to clarify, when you say in line with our expectation, so around 8% to 10% is something difference between China and India in terms of cost and which should be able to compensate with the 8% to 10% range?

Yes, definitely. If it's around in that ballpark, definitely, it is something which will go a long way in compensating the gap.

Got it. But I guess even CONCOR is also planning to buy from domestic players for a couple of years, and they are highlighting that there is a shortage of capacity. So are we also open to bid for CONCOR's orders or if there is any concern in that?

No, no, there is no concern. If CONCOR comes out with substantial tenders, definitely, we are going to bid for that. So definitely, there is no concerns on that. And we do participate as and when -- so right now, our capacities are quite full. So it is not that we are struggling in terms of -- because we are doubling our businesses. So we are very, very bullish on the sector, and we have a very, very long-term view on the sector.

1 Got it. And last, just a clarification. You talked about marine containers. So, I think I guess you required Corten steel. So how is the availability of that particular steel grade in India? Can you comment on that?

There's definitely not a challenge. There are now enough steel producers producing Corten steel. The challenge is in respect to the pricing compared to China, pricing in India is not sustainable for large-scale production to match the international prices. So definitely, that is where we are looking at the PLI scheme to bridge the gap.

[Operator Instructions] The next question is from the line of Virat Jain, an individual investor.

My question, sir, is regarding this delay in the wagon tender. So I mean, I think most of the major manufacturers now have less than 1 year of order left -- less than 1 year of, for example, supply left to supply to Indian Railway. But even now, we don't see fast movement on the tender. So is there some other discussion or policy discussion or some other thinking going on, which is delaying this tender? Or this is still you feel is just business as usual?

No. So we are confident that the tender should come out anytime this year. Railway is -- as a sector, the government of India as well as Indian Railway is very, very bullish. You have seen regularly Railway making sizable announcements in terms of capacity expansions and they are -- especially when it comes to the track infrastructure and infrastructure related to freight movement. So -- and there is a clear policy guideline from the government where they want to shift the freight transport from road to rail. And I think especially with line of the current geopolitical crisis, it has also become paramount for national interest that rail plays a much important role in the freight movement. So -- and this -- so, in terms of the long-term demand or long-term visibility, there is no challenge. I think it is just a small hiccup, which is there. But again, I think we expect the course correction to happen this year.

Okay. Okay. Just a follow-up, sir, recently, this, I don't know, wagon leasing policy document, I think, was updated maybe a year ago. One of your competitor, I think, has gotten a leasing license. So is that just an experiment at Indian Railways level? Or is there something more we should read into it?

So see, this is something you need to ask our competitors. So we have a very strong long-term partnership with GATX. And so for us, us Jupiter directly getting into leasing is not something which we are considering. And we don't see in the near future or in the next 5 years, at least that railway -- Indian railway would procure wagons through the leasing route. So it will -- leasing will be, I think, more on the private side of wagon procurement where we already have a strong partnership. And GATX is the leading leasing company not only in India, but globally. So -- and they have very strong legacy as well as experience. So, where we already have a strong partnership, we don't want to bring that leasing part on our balance sheet because for us to replicate that kind of business legacy again and the knowledge would take time, and it would not make any sense. So I think we -- our aim is to focus on our core competence, which is wagon manufacturing. And the leasing part for the time being, it should be taken care by the experts.

Okay. Okay. That's very helpful, sir. Sir, the final question is any prediscussion whether it will be onetime big tender or it will be split into several smaller tenders? Any idea around that, if you can give?

Honestly, this is something you should take it up with Indian Railways because as -- as a participant in the tendering, I don't think we are in a position to -- we are not privy to that.

[Operator Instructions] The next question is from the line of Koundinya from Jefferies.

A couple of questions from my end. First one on the passenger side of things, you did speak about entering into metro, et cetera. So, can you help us understand how do you intend to qualify for these projects? Because what we understand is the technical criteria here are stringent. Is it -- and what about the propulsion technology, et cetera, because how do you intend to qualify on those parameters? That's the first question.

So as you rightly said, you need prior experience in supplying passenger rolling stock to qualify. And though we are very strong on infrastructure, we don't have that experience. And that is the precise reason where we are finalizing a strategic tie-up with the global rolling stock manufacturer who has the necessary experience. So as I mentioned that we will be firming up the tie-up very shortly. And our intent is that in this financial year to enter that segment.

Understood, sir and the [indiscernible] partnership got that. Sir, my second question, sorry, I missed it. I think you would have spelled it in the opening remarks. Is there a delay in commissioning of interim operations at the wheel manufacturing plant?

Again, as I've reiterated, we had expected it to the interim operations to start about 2 quarters earlier. However, because of the geopolitical disruption, there were certain delays in the supply of the -- delay in the shipping of the equipment. So because of the shipping disruptions, the project got slightly delayed. But now, however, most of the equipments have reached and the other equipments are in transit. So, as of now, we don't see any kind of further delays. So, the final commissioning timelines, there is no delay. It is still on schedule. Only interim -- because the project we started earlier than our projected time line, we expected that it to commence about 2 quarters earlier, but unfortunately, it could not happen.

So, what are the time lines of December 28 for final commissioning and June 28 for interim, is it the way it works? Or will it -- can it be a little earlier?

No. I think December... March '27 is what we are saying for the interim and March '28 is for the final commissioning.

Understood. Sir, if I may ask one bookkeeping question. It appears that the subsidiary level EBITDA margins are lower in this quarter, even the gross margins have come off on a quarter-to-quarter basis. Is it that the wheel manufacturing margins have come off?

No. See, if you look at -- see, our major subsidiary today is the Railwheel factory. There, as we have reported, we have achieved a significant higher EBITDA margins. We achieved 17% EBITDA margins as compared to 12% last financial year. Even in terms of revenue, the revenues have substantially increased from INR 343 crores to INR 528 crores. I think where you see a slight thing is because of -- one is in Stone India, where we are going to -- we have just completed our licensing certifications, and we are going to commence operations in this financial year. So last year, it was more on account of CapEx where -- and there was an exceptional expense, which was incurred because the land in which the facility is located, it belongs to Port Trust. So we had to -- since it was an older land license, which was there with Port Trust, we had to renew the license, and that required us to pay an additional fee. So, that was a onetime expense, which we had to incur. It was mainly account of that. And also in case of Jupiter Electric Mobility, again, since we are expanding the business substantially, so last year, there were certain additional expenses, which was there. So this year, I think both Jupiter Electric Mobility and Stone India will show much better, stronger results. And as well as the Railwheel factory, we expect further improvements in both the EBITDA numbers as well as revenue numbers.

The next question is from the line of Balasubramanian from Arihant Capital.

Sir, Stone India received RDSO approval for freight brake systems. Earlier, it was mentioned the production will start from July 2026. We are on track. And whether also we are also capable to supply for passenger OEMs, especially for brake systems, whether we have to get a separate approval for that, if you could share some light on that?

So on Stone India, we are on track to start commercial operations from July. So -- and this year, we expect the business to turn profitable. So we are quite confident that the business will turn profitable this year. Stone India, currently, the license which we have got is basically for the freight brake systems, which itself is a very, very substantial market. On the passenger side of the brake system, we already have a JV with Dako through which we are supplying to Indian Railways for the passenger brakes. So we don't want cannibalization and a conflict. So Stone India will be focusing on the freight side of the brake market and the JV with Dako will be focusing on the passenger side.

[Operator Instructions] The next question is from the line of Amit Kumar from Determined Investments.

I hope you can hear me. I'm just sort of circling back to the core wagon manufacturing business. And if I heard it right, I think you mentioned that your order book is more sort of skewed towards the non-Railway business. I think on the Railway side, there has been some challenge in terms of wheelsets and supply chain. Are you sort of facing similar challenges on the non-Railway business side as well? I mean the wagon manufacturing on a quarter -- I mean, on a year-on-year basis is down almost by about 1,000 number basically. So could you sort of clarify, I mean, which are the parts in which you are sort of facing these kind of supply chain challenges on a fairly consistent basis?

So I think the main challenges was on the account of the Indian Railway supplies more than the non-Indian Railway supplies. So that was our main challenge. And the drop in the numbers are one of the reasons, as I mentioned. The loss -- last quarter, it wasn't on account of wheelsets so much, but on account of availability of other raw materials, mainly consumables, which caused the disruption. However, going forward, I think from Q2 of FY '27, we expect things to turn around. And we expect the company to be back on its -- on the production targets. As well as once -- as and when the new order book comes, you will substantially -- you'll see a substantial jump in the wagon execution. So we have had to keep the wagon execution also moderated to the current levels because until such time as we get the new order books, we don't want to expand the production capacities further and then going forward, have a shortage in terms of order execution.

This is not an issue of production capacity any which way, right? Because your wagon manufacturing number -- and you have the -- I mean, I get the point on the Indian Railway side. But if I look at the non-Railway side of the business also, you have a fairly strong, I think 5000-plus wagon -- INR 5,340 something I heard...

As I mentioned that now going forward, you will see a strong execution on that side of the order book and the bigger numbers coming out of that. There was certain -- we expected the numbers to jump up in this quarter itself, but because of certain disruptions, it was beyond our control. However, as I mentioned, you will see a good turnaround. And here also, you have to understand that the customers have certain delivery time lines. So we cannot jump the time lines and start delivering. We have to maintain the time lines which have been given by our customers.

The next question is from the line of Mohit, individual investor.

I just wanted to understand what is your outlook for this year? I know we gave close to like INR 3,000 crores. This financial close to like INR 4,000 crores. So I'm not expecting like a number, but are we expecting a number close to the previous financial year this time?

So definitely, we are expecting the numbers to be much better than the previous financial year. And especially, the non-wagon businesses are showing significant growth rates and that we expect the momentum to continue. Wagon, definitely on the wagon side, the execution will be better than last financial year, but substantial jump on the wagon side will happen as and when the Railway order book is released to us. Beyond that, you will not see a substantial jump in wagon order book executions. However, the non-wagon business is going to continue to grow significantly. And as I mentioned, long term, we have given -- by 2030, we expect the company to be at about INR 10,000 crores of revenue with at least minimum 15% EBITDA margins. And I'm again very bullish on the same given the -- how our wheel business is shaping up and all the other businesses are shaping up. And on the wagon business itself also, I'm very, very bullish. And as I mentioned that this is a small blip, which is there. However, the long-term projections is both from Indian Railways as well as, in general, the policy of the government of India is very much focused on Indian Railways and shifting of freight from road to rail. So, that is a long-term policy, and there is a very strong visibility on that.

Got it, sir. So, my second question is that I know you've been very bullish on BESS segment and with the recent war and oil being so precious and you've been bullish on renewables. So how do you -- have you seen like your customers changing inquiries regarding your products? And the second part is like you launched JEM TEZ last year. Like has there been any follow-ups regarding launching different products after that?

I got your first part of your question. The second part was not very clear. Could you repeat?

You had launched JEM TEZ in March of last year. So there was talk of you might be sort of launching the passenger variant of JEM TEZ and probably a 2-tone and a 3-tonne truck in the near future. So, just wanted to understand how that is?

Understood. So first, on the BESS, I think we are, again, very, very bullish. And we are not only -- we are seeing a huge I think, changeover, which -- and the customers are -- as the customers are getting more educated and they are seeing the real-time benefit, we are seeing also in the industrial and the consumer segment also, there's a huge switch from traditional gensets to lithium-ion battery systems. And that change is going to continue to compound going forward, both because it makes very strong economical sense as well as because of the environmental policies. On the EPC side, definitely, there is a huge push from the government of India on -- with regard to solar-cum-BESS policy, where we are again going to see a huge push then again on account of data centers itself that will happen. So definitely, the long-term view is very, very positive and very, very bullish on the segment. Today, I think in terms of the demand, which is needed and the capacities, there's mismatched capacities are smaller -- much smaller than the demand, and there's still a lot of imports which are happening, especially from China. So, I think going forward, as you saw in the solar -- the cell segment where the government policies basically ensured that people switch to local production rather than imports. So, similarly, you will find shifts here also happening in future. Beyond that, also, cell prices are coming down considerably, and it is becoming -- the move is happening from LFP to sodium, which will make it much more stable also, cells as a commodity. You will see a lot of investment happening in the cell line in future. We are also contemplating the same going forward. So definitely, this is one segment which will -- I expect the growth to be very, very strong. And it's not only the BESS, the other products which we are doing in -- with regard to batteries. So those segments, Railway being one, those segments are also seeing a lot of growth there. So definitely, this is a segment to look forward to. On the truck side, we never had any intentions of entering the passenger segment. What we had mentioned that we will enter the 2-tonne truck. So we are already in the process of right now, a vehicle is under design, and it will go for certification also shortly. So we expect to launch 1 or 2 variants this year.

Got it, sir. So last thing is, can I ask like what is the run rate of sales right now? Like how many units are you selling per month?

Honestly, I don't have the exact numbers with me, but I will share it with you. But what we are seeing is that month-on-month, we are seeing the numbers improving. But I will share the numbers. I don't have it offhand with me.

[Operator Instructions] As there are no further questions from participants, I now hand the conference over to the management for closing comments.

Thank you. As we move forward, we remain encouraged by the strong momentum across our businesses and the continued strength of our execution. With wheelsets supply stabilizing and government continued focus on the sector's development, freight wagon business would sooner regain operational momentum, while the excellent visibility across our other business lines positions us well for sustained and profitable growth. We are excited by the abundant opportunity set across both domestic and export markets. Our focus remains firmly on execution excellence, disciplined capital deployment and the continued strengthening of our manufacturing and integration capabilities as we work towards developing long-term sustainable value for all our stakeholders. Thank you for your continued trust and support. We look forward to updating you on our progress in the next quarter.

Thank you very much. On behalf of Systematix Group, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.