Jupiter Wagons Q2 Results Review - The Outlook Remains Strong, Maintain Buy: Systematix

Systematix Research Report

Jupiter Wagons Ltd. exhibited a mixed financial performance in Q2 FY25, as revenue witnessed robust growth but was offset by lower margins. Revenue surged 15% QoQ (+15% YoY) to Rs 10.1 billion owing to 9% growth in wagon manufacturing units to 2,130 in Q2 FY25 and elevated sales of wheels and axles. However, CV bodies volume declined 35% QoQ to 1,590 units container, and somplete mobility solutions crossings volume grew 66% and 70%.

The total number of wheelset assemblies also escalated to 3,327 units versus 1,925 units QoQ. However, the Ebitda margin came down to 13.8% from 15.5% QoQ (13.7% YoY) which led to an Ebitda of Rs 1,395 million, up 15.5% YoY (2% QoQ). This translated to a net profit of Rs 894 million, growing 8.9% YoY (-2.7% QoQ).

Order book declined to Rs 66.4 billion at the end of Q2 FY25 as against Rs 70.3 billion YoY, translated to a fresh addition of Rs 6.2 billion during Q2 FY25. Recent Log9’s, acquisitions of its railway and battery division and its Bangalore facility, aim to bolster in-house capabilities and enhance margins.

The management is confident to achieve ~10,000 wagons during FY25 reaching 12,000 wagons in FY26E. Wheelset capacity expansion is on track and it looks to invest Rs 25 billion to set up a forging and machining unit at Orissa and to increase the total capacity to 1Lwheelsets from the current 20,000.

The launch of e-LCV has been delayed by a quarter and is now expected to be launched by Dec-24. The management expects to sell nearly 1,000 vehicles in CY25.

Also, the commencement of Stone India has been delayed to FY26 from earlier Q3 FY25. We cut our Ebitda estimates by 4%/10%/10% for FY25E/FY26E/FY27E on the back of delays in projects and lower expectations of average prices of wagons (reduced from 4% to 2% hike). We forecast a robust revenue/Ebitda/PAT CAGR of 23%/29%/29%, respectively.

On the back of lower estimates, we cut our target price to Rs 667 from Rs 728 based on 40 times on FY27E. Maintain Buy.

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