Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Jupiter Wagons Ltd (BOM:533272, Financial) reported a total income of INR90,219 lakh, marking a 19% year-over-year increase.
- EBITDA surged to INR12,886 lakh, a 32% rise, with EBITDA margin improving to 14.4%, up from 12.9% in Q1 FY24.
- PAT reached INR8,923 lakh, a 40% increase, and PAT margin grew to 9.9%.
- The company secured a purchase order for LFP auxiliary batteries for Vande Bharat trainset from Siemens and has technically qualified for rail tenders.
- Jupiter Wagons Ltd (BOM:533272) successfully completed a qualified institution placement, raising INR800 crore, reflecting strong institutional confidence.
Negative Points
- Challenges from the general election and peak summer impacted the multi-location plants, causing disruptions in production.
- Order inflows were hampered in the quarter due to political events, affecting the overall order book execution.
- The commercial vehicle volumes showed a decline quarter-over-quarter, raising concerns about potential slowdowns in this segment.
- The company is still in the process of finalizing plans for backward integration in lithium-ion battery technology, indicating potential delays.
- There was a drop in the volume of railway wagons produced compared to the last quarter, attributed to election-related disruptions and extreme summer conditions.
Q & A Highlights
Q: With the budget announcement and the increase in production for locomotives and wagons, what does your order pipeline look like for this year?
A: Our order book is very strong, standing close to INR7,000 crore. We expect a very strong wagon demand from Indian Railways (IR), anticipating anything above 30,000 wagons. The private sector demand also remains robust, and we continue to add significant orders monthly.
Q: Can you give some color on the EBITDA margin improvement and its sustainability?
A: These margins are sustainable. Contributions from our wheel and braking businesses are increasing, which positively impacts margins. We have also started delivering specialized wagons, which we expect to further improve margins.
Q: What factors give you confidence that the order book will be executed and expanded as anticipated, despite the political events mentioned?
A: Post-election, execution numbers have gone up. We are targeting to achieve sales of 10,000 wagons this year and are on track. We are also increasing our foundry capacity, which will help us meet our targets.
Q: Could you elaborate on the company's plans regarding lithium-ion batteries and any significant capex plans?
A: We plan to backward integrate and are finalizing the same. Currently, we are focusing on developing the right technology and getting certified. We will provide more details as plans firm up.
Q: Can you give us a broad landscape of the wheelset business and its market demand?
A: The annual demand for wheelsets in India is expected to be around 6 lakh wheelsets. Our internal demand is close to 60,000 wheelsets, and Europe is a big opportunity. We are setting up facilities to produce about 1 lakh wheelsets by 2027.
Q: What is the average selling price for wheelsets for Vande Bharat and freight?
A: For freight, it is between INR2.7 lakh to INR3 lakh, and for Vande Bharat, it is between INR6 lakh to INR8 lakh. Margins are higher for high-speed applications like Vande Bharat.
Q: Can you provide an update on the EV business and the brake segment regarding Stone India?
A: We have received approvals from ARAI for our EVs and expect to start commercial production by October. For Stone India, we expect railways to grant licenses shortly, with commercial production starting in the next couple of months.
Q: What is the current net debt figure?
A: Our gross debt on a consolidated basis is around INR450 crore, and the net debt is around INR300 crore.
Q: What progress has been made in the commercial vehicle segment, especially with the government's scrapping policy?
A: The market size for 1 to 3 tonne vehicles is around 600,000 vehicles. We expect a significant demand due to the move towards cleaner vehicles, especially in metros and major cities.
Q: What is the total addressable market for the container business over the next two to three years?
A: Globally, it is a business of more than 5 gigawatts, projected to be about 10 gigawatts in the next three years. The market size runs into billions of dollars, with significant opportunities for India to develop capacities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
