Jupiter Wagons Limited (JWL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q1 FY '27 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. Prathamesh Kamath from Systematix Group. Thank you, and over to you, sir.

Good afternoon, everyone. Thanks for joining us today for the Q1 FY '27 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; Mr. Vinod Agrawal, Chief Financial Officer; and Mr. Punit Sabu, Vice President. 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.

Yes. Thank you very much. So good afternoon, all, ladies and gentlemen. Thank you for joining us today to discuss our performance for the first quarter of FY '27. And I hope you have had the opportunity to review our results presentation and investor communications circulated earlier. FY '27 has begun on a strong note for Jupiter Wagons, marked by continued business momentum and meaningful progress across our strategic priorities. Our focus on portfolio diversification and investments in technology capacity and manufacturing capabilities is enabling us to strengthen our competitive position and capture the significant opportunities emerging across Indian railway and mobility sectors. During Q1 FY '27, consolidated revenue from operations increased 46% year-on-year to INR 671 crores, while EBITDA grew 9% to INR 65 crores, translating into an EBITDA margin of roughly 10%. Profit after tax stood at INR 26 crores with PAT margin at 4%. As volume increases and operating leverage improves, we remain confident of delivering stronger profitability in the quarters ahead. We have secured fresh orders worth INR 264 crores from JSW and the Central Warehousing Corporation, reflecting continued customer confidence. In addition, we have also secured additional orders worth INR 211 crores from JSW Port Logistics and Orissa Alloy and Steel Private Limited. The JSW order comprises 7 rigs covering 329 BSM wagons, while the Orissa allotted order has constitutes 150 wagons under the LS STO scheme. These orders reinforce the growing opportunity in private backed ownership and leasing, while strengthening our leadership in this segment. A key strategic milestone during the quarter was the strengthening of our rail wheel platform. We completed the acquisition of the remaining 1.94% stake in Jupiter Tatravagonka Poprad factory, increasing our ownership to 100% and giving us complete strategic and operational control as we prepare for the next phase of growth. Building on this foundation, we entered into a landmark strategic partnership with Lucchini of Italy. Under the partnership, Lucchini RS and SIMEST, Italian government Financial Institute shall acquire a combined 25% stake in JTRW with an investment of approximately INR 290 crores. Beyond the capital infusion, this partnership brings world-class wheel technology, engineering expertise and global market access. Together, we are creating India's first fully integrated private sector rail deal manufacturing platform, strengthening domestic manufacturing capabilities while establishing a strong base for exports and enhancing our global competitiveness. Beyond our traditional railway operations, we continue to build Jupiter Electric Mobility as an important future growth platform. During the quarter, we have secured 110-megawatt of BESS orders for FY '27 through strategic MOUs with Chalukia Power and Pickrenew across utility scale and commercial and industrial applications. In parallel, we expanded our clean energy portfolio with modular containerized best solutions in 10-foot and 20-foot formats, addressing applications, including renewal energy integration, diesel generator replacement and mobile energy storage. Momentum has accelerated for the quarter. Gen emerged as a successful bidder for 2 stand-alone BESS projects in West Bental with the combined capacity of 100 and 400-megawatt covering the and Karaghpur projects. These projects involve approximately of best supply and commissioning and will operate under a 15-year build-own-operate model with West Bengal State Electricity Board. With these wins, JM Energy's best order book now increased to approximately 500 megawatts valued at over INR 500 crores. We are targeting a BESS order book of approximately INR 1,000 crores by FY '27, reflecting our confidence in the structural opportunity presented by India's rapidly expanding energy storage platform. We see energy storage as a natural extension of our mobility and engineering capabilities and an important opportunity to participate in India's transition towards a renewable-led power system. Our objective is to build a scalable technology-driven BESS business, serving both utility scale and commercial and industrial applications. Another important milestone was achieved by Stone India, which received RDSO approval for its trade break systems during the quarter. Commercial production commenced from July 2026, enabling the company to bring supplying credit breaks to the railway sector. This approval expands our railway safety product portfolio and provides another avenue to participate in the growing demand for engineer's value-added delay components. Our priorities remain clear. We will continue to expand our manufacturing footprint, strengthen backward integration, leverage technology partnerships, enhance our product portfolio and improve execution capabilities. At the same time, we remain focused on operational efficiency, capital discipline and improving profitability as we scale. Thank you for your continued trust and support. I now request the moderator to open the floor for questions.

[Operator Instructions] First question from the line of Rehan Sayed from Trinetra Asset Managers.

I have couple of questions. First, sir, we took just -- first question is on your order book side. So with the current order book at around INR 4.53 crores. Could you provide a broad segment-wise come between we said components or either commercial vehicle bodies and other business and is expected execution profile for FY '28?

Could you repeat your final question? I could not understand.

Yes, sure. My question is around your order book of around INR 44,500crores plus. So could you provide us broad segment-wise breakup between your arable wafer, we you say components, commercial vehicle bodies and other businesses along with how -- what is the expected execution profile for FY '27 and '28?

Understood. Understood. So our railway wagon order book, which includes both railway as well as private order book stands at approximately INR 3,000 crores. The other meaningful order books, I will just name the wheel side business, the order book is about close to INR 700-odd crores. And the commercial vehicle segment, it's about INR 500 crores. And we have mentioned that on the BESS side now, our order book stands at about INR 500-odd crores, which includes the last order, which came in the current quarter from the state electricity board. So this is roughly the constitution of order. On the real rate -- on the wagon side, we expect to execute sizable percentage of the order book in FY '27 itself because most of our deliveries are for FY '27. And we will continue to build on further order books there. So if you look at the overall order book, I think about -- we are -- most of that order book currently, which we have should be executed in FY '27 itself. About -- we are looking at about 60% to 70% of the order book being executed in the current financial.

Okay, sir. And sir, just if you have mentioned right now for about railway relent. So just wanted some clarification. So your wagon production is around 1141 units in quarters in FY '27 versus if we have seen in the last quarter it is around 1 3 4 7 units. So just this -- is my understanding correct that this was because of the sequential decline primarily due to seasonality or execution scheduling or capacity constant? And just could you please help me understand what is the expected production run rate for the remaining quarters of FY '27?

So this was mainly because currently, our focus is mainly on a lot of private sector order book execution. And in the first quarter, there was a transition because there are a lot of new wagons, which we started producing. So when you're producing a new design of wagon, there is a prototype of approval, and so that has its own time frame attached to it. So that is the reason you see a dip. But going forward, I think in the next 3 quarters, you will see the execution improving compared to last year.

Okay. And then my 1 last question from my side, and I'll join back in the queue. So sir, my last question is around your Odisha greenfield railway facility, targeting partial production by end of FY '27 and full commissioning by the end of FY '28. So what capacity will become operational in each phase? And what would be the expected utilization ramp-up? And what do you expect the project to achieve EBITDA breakeven? And just add on in this question only. once your Odisha railway facility is fully operational, what proportion of production do you see being absorbed internally versus sold to third-party domestic customers and exports? And also, how does the expected margin profile compared with the existing wheel and business?

Your question covers vetting it all 1 question, is Yes. So I will briefly I'll not get into details here, but briefly, we expect our -- we have 2 lines. One is the axle line and one is the wheel line. In FY '27, we expect the axle line to get commissioned. And FY '28 is when we targeted for the wheel line to get commissioned. So once both lines are commissioned, we are looking at revenue of anything between INR 2,500 crores to INR 3,000 crores is our revenue target. And definitely, we are targeting EBITDA of at least 15-odd percent in this business, if not higher. Again, first priority is definitely going to be the captive consumption. And by then, we expect the wagon order books also to become very strong. So definitely, I think as we have always retained that about 50% of the capacity would be for our own internal use and the domestic requirements and 50% of the capacity will be earmarked for the export business. And overall capacity is around 100,000 deal sets is the rated capacity of the facility.

[Operator Instructions] Next question is from the line of Koundinya Niagara from Jefferies.

Three questions from my end. So the first thing, if I were to look at it, right, you were wagon realization seems to have gone up this quarter. I mean, can you throw a little bit of color where would that number be directionally because our stand-alone sales are higher than the wagon sales? Just trying to understand that little breakup, if you can provide some color on that.

So as I mentioned to the last caller that the first quarter was a slight transition period for us because there were a lot of new designs, which we had started producing. So there was a transition period in terms of the prototypes, which we had to make. But from second quarter onwards, definitely, you will see a spike in the wagon numbers...

Sir, my question is a little different, actually. I was trying to understand if the wagon realizations have gone up materially because stand-alone sales growth vis-a-vis the vacant sales growth...

The realization of the -- okay, so the wagon realization continues to remain the same. I don't think there is much change. Yes, but what has happened is that the non-railway side of the business has gone up. So that has definitely resulted because the non-railway, the margins are better. So compared to -- if you look at the same quarter last year, I think it was about average of INR 38 lakhs. And right now, we are at INR 41.5 lakhs.

Understood, sir. Sir, my second question is, if I were to look at the EBITDA level, right? It appears that our subsidiaries have reported an EBITDA loss this quarter. Can you help us understand, I mean, what is happening here? Because our stand-alone EBITDA is higher than console, therefore, subsidiaries haven't contributed a bit actually.

So the mobility, the -- so as we have mentioned that when it comes -- Stone India, we have got the approval now from IDS for the break -- trade break systems. So I think from third quarter onwards, Stone India will become profitable. So maybe in the second quarter, you may see slight bottom line negative numbers. But from third quarter, Stone India will turn positive because now it's a question of ramping up the production. On the Jupiter Electric Mobility, I think which we have continued to maintain is that from FY '28 onwards, the business is going to turn EBITDA positive for us. Because as FY '27 is -- for us is building on our core technology and building on order books, we have seen a sizable order books coming in. So from FY '27, you will see a big ramp-up on the business. I think the only other JV, which is the JWL, which, again, I think by -- in the coming quarters, we will start executing. We have a very strong order book now from Indian Railways. We'll start executing those order books. So I think before the end -- by the third quarter, all the JVs will start reporting positive EBITDAs as per our estimation. Only the GeM numbers, the EBITDA positive -- EBITDA numbers will be in FY '28.

Sure, sir. Sir, on the VSAT side, right now post a transaction, if you I mean, a little compressing for me, if you can help us understand, one, what is the total CapEx? Now, out of that, how much is that we go out of Jupiter pocket? And if you can brief those mechanisms, how does it work?

So the total capital -- the project CapEx remains at INR 2,600 crores. Out of that, Jupiter was supposed to -- Jupiter was supposed to infuse INR 900 crores. Now, out of the INR 900 crores, the new investor brings in approximately INR 300-odd crores. So now Jupiter's infusion now goes down to INR 600 crores.

Understood, sir. Sir, if I may ask 1 last question. What is the status of that INR 1 lakh wheel tender -- wagon tender. Is there any update on that?

So unfortunately, right now, I cannot give you any -- see the railway trade demand continues to grow, and that continues to remain strong. And there is a very -- the railway continues to maintain the target of loading of 3.5 lakh billion tonnes of loading. So again, we don't see any challenges on the demand side. We are just waiting for railways to firm up their requirements.

[Operator Instructions] Next question is from the line of [indiscernible] from Canary Elfa.

And my question on the Stone India side, could we comment of the production on July 26. So that support our order book now. What is the EBITDA percentage after FY '27, the second half we can estimate from there...

So again, from FY '28 -- '27, again, I cannot -- from FY '28 onwards, definitely, the EBITDA will be 15% plus...

FY '28...

FY '28, I can give you -- so the -- as I have told you that volumes are going to build up gradually. So for this year to give you color on the EBITDA numbers, it would be a little challenging. But we expect that by end of this calendar year, we will reach our capacities, which we are estimating. So once we reach the capacities, which we are targeting and estimating, it should be a steady EBITDA of close to 15-odd percent.

Okay. sir. And the second question on percentage of our current rate wagon manufacturing requirement is confined by the Ston India retimers external vendors.

So we -- again, as I told you before end of the calendar year, 100% of our requirements will be met by Stone India.

Okay. Okay. Any current percentage you have...

As we are ramping up, honestly, I don't know have the numbers, but it is not meaningful because -- and I'm talking about in the next 3 to 6 months itself, the ramp-up will happen that 100% of our requirements are fulfilled by the subsidiary.

Next question is from the line of as [indiscernible] from Desperado Research.

I just have 1 question. Our consolidated revenue declined sequentially this quarter. Was this primarily due to the seasonality? Or were there any execution?