Why Jupiter Wagons Share Price is Rising

Last week we wrote to you about why Titagarh Rail System share price is rising. Before that we also wrote to you about why RVNL share price is rising.

Now, another railway company is in the spotlight: Jupiter Wagons. Mirroring the positive trend of other top railway companies, Jupiter Wagons stands out with a 406.3% surge in its share price over the past year.

And 2024 is proving to be another strong year, with the stock price already rallying 101.5% so far.

In fact, the momentum has picked up even more recently, with a significant 14% increase in the share price over the past five days. With such significant growth across various timeframes, it's natural to wonder what's driving this momentum for Jupiter Wagons.

Read on to find out...

#1 Subsidiary's Order Win

Jupiter Wagons' subsidiary, Jupiter Electric Mobility (JEM), got the approval from Automotive Research Association of India (ARAI) to start manufacturing battery-operated light commercial vehicle (LCV).

The battery-operated light commercial vehicle will be manufactured under the JEM TEZ brand name.

A significant order translates to a guaranteed influx of revenue for the subsidiary. Hence, a major order win by a subsidiary sends a strong signal to investors about the parent company's future revenue stream and growth potential.

#2 Good Financial Performance

For FY24, the company's total revenue surged over 76.9% year-on-year (YoY) to Rs 36.7 billion (bn), driven by a significant rise in order inflow during the year.

As of 31 March 2024, the company's order book stands at Rs 71 bn.

This momentum translates to the bottom line as well, with net profit climbing a whopping 174.3% to Rs 3.3 bn.

Fuelling this growth is the rising wagon demand, with increased government spending in the railway sector boosting Jupiter Wagons' profitability.

It maintained industry-leading margin as earnings before interest, tax, depreciation, and amortisation (EBITDA) margin improved to 13.5% in FY24 from 12.3% in FY23.

Adding to the good news, the company declared a final dividend of Rs 0.3 per share for FY24.

Here's a 3-year trajectory of the financial performance of the company.

Jupiter Wagons Financial Performance Summary

What Next?

Jupiter Wagons concluded a successful FY24 with a hefty order book of Rs 71 bn. The private sector played a major role, solidifying the company's dominance in this segment. It commands a 60-70% market share in private rake deliveries, significantly outperforming competitors.

Looking ahead, the firm is confident in maintaining this momentum. It expects a growing share of specialised wagons for the steel, cement, and auto sectors, featuring industry-leading designs, which should improve margins.

The company is ambitious about capacity expansion, aiming to produce 1,000 wagons per month. While global tenders take time, it anticipates significant contributions to the FY25 order book.

The company's recent acquisition of Bonatrans India strengthens its integrated business model. This allows for in-house wheel set production, enhancing vertical integration and production efficiency. Bonatrans is expected to contribute around Rs 4 bn in FY25 revenue.

The company plans for complete backward integration within 18-24 months through a significant investment and partnerships in Europe. The goal is to produce around 200,000 wheels with a strong focus on exports, bolstered by Jupiter Wagons' existing partnerships with Tatravagonka.

FY24 marked a shift for Jupiter Wagons' container business towards specialised production for battery energy storage systems (BESS) and data centers. The company is collaborating with prominent names like GE, Schneider, Toshiba, and Tata Solar.

It plans to offer complete integrated solutions for BESS and data centers, aligning with the government's focus on these sectors and power storage in solar energy.

Overall, the company appears bullish on the future. It is well-positioned to capitalise on strong private sector demand, expand capacity, and achieve greater vertical integration through wheel set production.

The company's focus on innovative containerised solutions aligns with government priorities and presents exciting export opportunities.

However, investors should be aware that the success of these ambitious plans hinges on efficient execution and navigating potential challenges in the global market.

How Jupiter Wagons Share Price has Performed Recently

In the past five days, Jupiter Wagons share price has rallied 13.7%. In the last month, it is up 61.9%.

In 2024, so far it surged more than 105.8%. In the past year it gave multibagger return of 417%

The stock touched its 52-week high of Rs 681.9 on 3 June 2024 and a 52-week low of Rs 125.2 on 2 June 2023.

About Jupiter Wagons

Jupiter Wagons is an integrated railway engineering company for freight wagons and passenger coach items for the Indian Railways.

It offers wagons products, such as open wagons, covered wagons, flat wagons, hopper wagons, container wagons, and special purpose wagons. It offers wagon accessories, such as alloy steel cast bogies, high tensile center buffer coupler, and high-capacity draft gear.

The company also manufactures couplers, draft gears and railway turnouts for the Indian Railways and the North American railroads. It has manufacturing facilities at Hooghly (WB), Jabalpur (MP), Indore (MP), and Jamshedpur (Jharkhand).

To know more about the company, check out Jupiter Wagons' fact sheet and quarterly results.

You can also compare Jupiter Wagons with its peers.

Jupiter Wagons vs Titagarh Rail Systems

Jupiter Wagons vs Texmaco Rail

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...