Jupiter Wagons is planning to expand across multiple vectors and is looking to invest Rs 1,500 crore over the next two years to ensure that the company earns equal revenue from its wagon manufacturing and it's high-margin railway components, commercial vehicles, and container businesses.
"Overall, in the next two years, we plan to do a capex of roughly about Rs 1,500 crores, out of which Rs 1,200 crores roughly will go towards the wheel project," Vivek Lohia, managing director, Jupiter Wagons told Moneycontrol.
Lohia said that Jupiter Wagons will look to increase its train wheel manufacturing capacity to produce 100,000 wheels annually in the next two years from 20,000 at the moment.
He also added that Jupiter Wagons is also planning to launch its first electric light commercial vehicle (ELCV) with the capacity of one tonne by July and then plans to launch other electric light commercial vehicles by the end of the year.
"Our first vehicle will be a one-ton ELCV, a four-wheeler with a one-ton payload that will be launched sometime in July or August. This year, we are looking to launch vehicles up to two ton payloads. Followed by higher payloads from next year," Lohia said.
Both plans are part of Jupiter Wagons' strategy to diversify from its core wagon manufacturing business and increase revenue from other verticals.
“Today wagon is the biggest business for us contributing around 60-70 percent of the revenue. But in the next two years, the share of wagons could be less than 50 percent as we expand the business on the wheels, brakes and commercial vehicles. These are businesses where margins are much higher,” Lohia said.
Jupiter Wagons is also in the process of increasing its wagon manufacturing capacity from 8,000 wagons annually currently to around 10,000 wagons in 2024-25 and 12,000 to 15,000 wagons annually by 2025-26.
The company, which has a market capitalisation of Rs 15,425 crore, has seen its order book swell in the last three years to around Rs 7,000 crore from Rs 4,000 crore in 2021-22.
Lohia said that the company plans to execute the current order book in the next 18 months and expects strong order inflow in 2024-25 and 2025-26 as well.
Earlier this month, Jupiter Wagons posted an over two-fold jump in its standalone net profit to Rs 104.22 crore in the March quarter, on account of higher income.
The company's total income during the quarter rose to Rs 1,121.34 crore from Rs 712.71 crore in the year-ago period.
During the quarter, Jupiter Wagons also secured an order for the manufacturing and supply of four rakes of double-decker automobile carrier wagons totaling Rs 100 crore. As of March 31, the company's order book stands at Rs 7,101.66 crore.
Wagons business
Lohia told Moneycontrol that he expects the Indian Railways and the private sector to place orders for 50,000 wagons in the next two years.
"While the Indian Railways has not come out with one bumper tender for wagons like they did a couple of years ago, they have been coming out with smaller tenders of 10,000 wagons totalling around 40,000 wagons a year, which we expect to continue for the next two years," Lohia said.
He added that the private sector is also expected to come out with orders for 7,000 to 10,000 wagons.
Jupiter Wagons is also hoping that its joint venture partner Rites finalises its contract with the National Railways of Zimbabwe (NRZ) for the supply of rolling stock.
The contract was signed last year between Rites and the National Railways of Zimbabwe (NRZ) for supply of rolling stock (3,000 HP Diesel Electric Locomotives and High Sided Open Wagons is expected to be worth $ 81.175 million.
RITES has a partnership with Jupiter Wagons to supply wagons for its export orders.
So far, Jupiter Wagons has invested more than Rs 200 crore in the last 18 months to expand the foundry capacity of its Calcutta plant.
The company is also adding foundry capacity of 20,000 tonnes of casting and will invest close to Rs 300 crore incremental at its Jabalpur plant.
Wheels business
Jupiter Wagons acquired Bonatrans last year to build its wheelset manufacturing capabilities to reduce import dependencies.
Jupiter Wagons is looking to ramp up wheel supplies to Tatravagonka A S, a promoter of Jupiter Wagons, after Tatravagonka's supplies were hit in the aftermath of the Ukraine-Russia war.
Traditionally, both Ukraine and Russia were key wheelset providers to Europe, but now Tatravagonka needs about 50,000 wheelsets annually and is looking towards India for supply.
Lohia added that the current market price for a basic wheelset is about Rs 3,00,000. For specific uses in metro projects and the Vande Bharat initiatives, the cost per wheelset escalates to between Rs 8 lakh and Rs 10 lakh.
Commercial electric vehicle business
The company is looking to launch its electric commercial vehicles under the Jupiter Electric Mobility brand.
“Our facility at Indore is ready. In the first year, the plan is to make 1,000 vehicles and then take it forward. We will start with a 1-ton truck and that will be followed by 1.5 tons, 2 tons and 3 tons, with the focus on last mile connectivity,” Lohia said.
He added that the ELCVs expected to be launched by August will be priced competitively when compared to traditional LCVs.
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