Jupiter Wagons Ltd:Annual Report 2023-24 Analysis

Jupiter Wagons Ltd: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History: Jupiter Wagons Ltd. (formerly Jupiter Alloys & Steel India Ltd.) was originally incorporated in 1979. The company has evolved over the years, with a significant shift towards manufacturing railway wagons and components.

Headquarters Location and Global Presence: The company’s headquarters are located in Kolkata, India. While primarily focused on the Indian market, Jupiter Wagons is expanding its reach internationally, particularly in areas related to railway infrastructure and component supply.

Company Vision and Mission: (Information not publicly available. Review investor relations or company reports for insights.)

Key Milestones in their Growth Journey:

• Diversification into Railway Wagons: The company’s strategic shift into railway wagon manufacturing marks a crucial milestone.
• Acquisitions: Jupiter Wagons has pursued acquisitions to expand its product portfolio and manufacturing capabilities.
• Capacity Expansion: Investments in expanding production capacity to meet growing demand.
• Technological Advancements: Implementing advanced manufacturing techniques and developing innovative wagon designs.

Stock Exchange Listing Details and Market Capitalization: Jupiter Wagons Ltd. is listed on the Bombay Stock Exchange (BSE: 533207) and National Stock Exchange (NSE: JUPITER). Market capitalization is subject to constant fluctuations.

Recent Financial Performance Highlights: (Refer to latest quarterly or annual reports for up-to-date figures on revenue, profit, and key financial ratios.)

Management Team and Leadership Structure: (Review the company website, annual reports, or LinkedIn for details on the leadership team, including the CEO, CFO, and key executives.)

Any Notable Awards or Recognitions: (Check the company website, press releases, and annual reports for awards related to manufacturing excellence, innovation, or sustainability.)

Their Products #

Complete Product Portfolio with Categories:

• Railway Wagons: Broad Gauge Wagons, Container Wagons, Special Purpose Wagons
• Wagon Components: Couplers, Draft Gears, Bogies, Air Brakes.
• Commercial Vehicles: (Recent addition and expanding. Focuses on electric commercial vehicles.)

Flagship or Signature Product Lines: Railway wagons designed for specific industries, particularly those for transportation of bulk commodities like coal, iron ore, and cement.

Key Technological Innovations or Patents: (Refer to company reports and press releases for detailed information on patents and innovative wagon designs, such as lightweight wagons or wagons with improved loading/unloading mechanisms.)

Manufacturing Facilities and Production Capacity: Jupiter Wagons has manufacturing facilities across India. (Precise production capacity figures need to be obtained from official sources.)

Quality Certifications and Standards: (Confirm from company resources. Typically will include ISO 9001, and industry specific certifications.)

Any Unique Selling Propositions or Technological Advantages: Focus on customized wagon designs tailored to specific customer needs, lightweight wagon technologies, and efficient loading/unloading mechanisms.

Recent Product Launches or R&D Initiatives: Electric Light Commercial Vehicles (LCV) & Electric Heavy Commercial Vehicles (HCV)

Primary Customers #

Target Industries and Sectors:

• Railways: Primarily Indian Railways
• Mining: Companies involved in coal and iron ore mining
• Steel: Steel manufacturers
• Cement: Cement producers
• Logistics: Logistics companies involved in bulk commodity transportation

Geographic Markets (Domestic vs. International): Primarily focused on the domestic Indian market, with growing export initiatives.

Major Client Segments (agricultural, industrial, residential, etc.): Primarily industrial segment, particularly those related to infrastructure and bulk commodity movement.

Any Notable Government Contracts or Institutional Clients: Frequent supplier to Indian Railways.

Distribution Network and Sales Channels: Primarily direct sales through a dedicated sales team.

Major Competitors #

Direct Competitors in India and Globally:

• Titagarh Rail Systems Ltd. (India)
• Rail Vikas Nigam Limited (RVNL) (India)
• BEML Limited (India)
• Texmaco Rail & Engineering Ltd. (India)

Competitive Advantages and Disadvantages:

• Advantages: Established relationships with Indian Railways, customization capabilities, expanding product portfolio.
• Disadvantages: Competition from established players, reliance on government policies related to railway infrastructure.

How they differentiate from competitors: Customization, expanding into Electric Commercial Vehicles, and technological focus.

Industry Challenges and Opportunities:

• Challenges: Fluctuations in raw material prices, dependence on government spending, technological disruptions.
• Opportunities: Growing Indian economy, increasing demand for rail infrastructure, government initiatives to promote rail transport, expansion into adjacent markets like EV.

Market Positioning Strategy: Positioning themselves as a reliable and innovative supplier of railway wagons and components, while expanding into the electric vehicle sector.

Future Outlook #

Expansion Plans or Growth Strategy: Focus on expanding manufacturing capacity, diversifying product portfolio (especially into the EV segment), and increasing exports.

Upcoming Products or Innovations: Development of new wagon designs, electric commercial vehicles, and potentially entering adjacent sectors.

Sustainability Initiatives or ESG Commitments: (Search for details on ESG initiatives in their annual reports, sustainability reports, or company website.)

Industry Trends Affecting Their Business: Increased government investment in railway infrastructure, growing demand for freight transport, adoption of electric vehicles, and focus on sustainable transportation solutions.

Long-term Vision and Strategic Goals: (Review investor presentations and company releases for insights on long-term goals, such as market leadership in railway wagon manufacturing and significant presence in the electric vehicle market.)

Jupiter Wagons Limited - Financial Analysis Report (FY24) #

Comprehensive Performance Overview #

Financial Metrics (Trend Analysis) #

Financial Performance Commentary #

Jupiter Wagons Limited demonstrated robust growth in FY24. Standalone revenue surged by 76.06%, driven primarily by the wagons segment. Profitability metrics showed significant improvement, with standalone PAT growing by 165.16% and EBITDA margin expanding by 121 bps to 13.49%. The consolidated performance mirrored this strong trajectory. The company successfully raised ~₹403 Cr via QIP, strengthening its equity base. Key financial ratios indicate improved financial health and operational efficiency. The order book provides strong revenue visibility for the next three years.

Business Segment Performance (Standalone, FY24 vs FY23) #

Segment Performance Commentary #

The Railway Wagons segment was the primary growth engine, nearly doubling its revenue and contributing over 85% to total revenue. This was fueled by significant orders from both private parties and the Ministry of Railways. Commercial Vehicle Load Bodies & Components also saw healthy growth. The performance of CMS Crossings and Containers segments declined, though the outlook for specialized containers (BESS, Flex Inverter) is improving with new orders and LOIs.

Major Strategic Initiatives and Progress #

1. Capacity Expansion & Modernization:
   • Upgraded manufacturing with full automation for quality and import substitution.
   • Foundry capacity to increase by 8,000 MT/year.
   • Wagon manufacturing capacity increased to ~700 wagons/month, projected to reach ~1,000/month post-foundry expansion.
   • Progress: Ongoing, significant capacity enhancements at Kolkata and Jabalpur.
2. Backward Integration & Acquisitions:
   • Stone India Limited: Acquisition completed. Transition to full control underway. Focus on railway offerings like braking systems, pantographs, air brake components.
     • Progress: Post-acquisition integration on schedule.
   • Bonatrans India Pvt. Ltd. (BIPL): Acquired 94.25% stake, making JWL the first rolling stock manufacturer with its

Detailed Analysis #

Financial Analysis: Jupiter Wagons Limited (JWL) - FY 2023-24 #

Based on Standalone Financial Statements unless otherwise specified. All figures in INR Lakhs unless stated otherwise.

Balance Sheet Analysis #

Comparative Analysis of Assets, Liabilities, and Equity (Standalone) #

The company’s financial position for FY24 and FY23 is summarized below. Detailed FY22 balance sheet data is not available.

Table 1.1: Comparative Balance Sheet Highlights (Standalone)

Significant Changes in Major Line Items (>10% YoY) (Standalone) #

Table 2.1: Significant Changes in Standalone Balance Sheet Items (>10% YoY)

Table 2.2: Significant Changes in Standalone Statement of Profit and Loss Items (>10% YoY)

Jupiter Wagons Limited - FY 2023-24 Financial Analysis #

Revenue Breakdown and Growth Analysis (Standalone) #

Jupiter Wagons Limited’s standalone revenue from operations grew by 76.06% to ₹3,641.25 crores in FY24 from ₹2,068.25 crores in FY23.

Segment-wise Revenue Performance (Standalone) #

• Railway Wagons: Revenue grew by 91.31% to ₹3,110.75 crores (8,020 units) in FY24 from ₹1,626.00 crores (4,192 units) in FY23.
• CMS Crossing: Revenue decreased by 49.04% to ₹18.96 crores (680 units) in FY24 from ₹37.21 crores (1,010 units) in FY23.
• Commercial Vehicle Load Bodies & Components: Revenue increased by 31.64% to ₹414.07 crores (10,683 units) in FY24 from ₹314.55 crores (7,897 units) in FY23.
• Containers: Revenue decreased by 11.77% to ₹44.43 crores (694 units) in FY24 from ₹50.36 crores (1,063 units) in FY23.
• Others: Revenue increased by 79.84% to ₹63.04 crores in FY24 from ₹35.05 crores in FY23.

Geographical Revenue Performance (Standalone - FY24) #

• India: ₹3,640.76 crores
• Rest of the world: ₹0.49 crores

Export contribution was 0.013% of total turnover in FY24.

Cost Structure Analysis (Standalone) #

Raw Materials Cost and Changes in Inventories #

• FY24: ₹2,825.23 crores (77.68% of net sales)
• FY23: ₹1,574.44 crores (76.13% of net sales)

Employee Benefits Expense #

• FY24: ₹50.58 crores (1.39% of net sales)
• FY23: ₹41.16 crores (1.99% of net sales)

Operating and Other Expenses #

• FY24: ₹270.92 crores (7.44% of net sales)
• FY23: ₹198.79 crores (9.61% of net sales)

Finance Costs #

• FY24: ₹40.96 crores (1.12% of net sales)
• FY23: ₹28.93 crores (1.40% of net sales)

Depreciation and Amortisation Expense #

• FY24: ₹27.60 crores (0.76% of net sales)
• FY23: ₹25.02 crores (1.21% of net sales)

Margin Analysis (Standalone) #

Operating Profit (EBITDA) Margin #

• FY24: 13.49% (EBITDA: ₹491.30 crores)
• FY23: 12.28% (EBITDA: ₹254.02 crores)

Profit Before Tax (PBT) Margin (before exceptional items) #

• FY24: 12.18% (PBT: ₹443.68 crores)
• FY23: 9.92% (PBT: ₹205.19 crores)

Net Profit Margin (PAT Margin) #

• FY24: 9.14% (PAT: ₹332.82 crores)
• FY23: 6.06% (PAT: ₹125.30 crores)

Operating Leverage #

The company demonstrated positive operating leverage in FY24. Revenue from operations (standalone) grew by 76.06%, while EBITDA surged by 93.02%. EBITDA margin expanded by 121 basis points to 13.49%.

EPS Analysis #

Basic Earnings Per Share (EPS) #

• FY24: ₹8.09
• FY23: ₹3.22

Diluted Earnings Per Share (EPS) #

• FY24:

Cash Management #

Cash Flow and Liquidity Analysis #

Key Performance Indicators #

Segment Performance Analysis #

Risk Framework #

Comprehensive Risk Assessment #

Jupiter Wagons Limited - Financial Risk Analysis Report #

• Date of Report: August 19, 2024
• Based on Annual Report for F.Y. 2023-24

Risk Profile Summary: #

Jupiter Wagons Limited (JWL) operates in sectors intrinsically linked to economic cycles, government policy, and capital expenditure, leading to a multifaceted risk environment. Key risks revolve around customer concentration, raw material volatility, operational execution, and successful diversification. The company has a substantial order book (₹7,102 Cr as of March 31, 2024), providing revenue visibility but also concentrating risk if execution falters or key orders are impacted. Recent acquisitions (Stone India, Bonatrans India) introduce integration risks but also offer mitigation through backward integration and market expansion. Financial health appears robust, with an upgraded credit rating and successful QIP, but reliance on continued infrastructure spending and managing a diversified portfolio remain critical.

I. Strategic Risks #

1. Dependence on Indian Railways and Government Policy: #

• Severity: High. A significant portion of revenue (Wagons: 85.45% of FY24 operational revenue) is linked to Indian Railways and related PSUs.
• Likelihood: Medium. While current government focus is strong (National Rail Plan, DFCs), policy shifts or budget reallocations can occur.
• Trend: Stable to Slightly Decreasing. Government initiatives like DFCs and station redevelopment indicate continued investment. However, JWL’s diversification efforts aim to reduce this. Wagon revenue as % of total increased from 78.64% in FY23 to 85.45% in FY24, indicating current higher reliance.
• Mitigation Strategies:
  • Diversification into private sector wagon orders (2,150 units, ₹1,060 Cr in FY24 from private parties).
  • Expansion into new verticals: eLCVs (Jupiter Electric Mobility), brake systems (JVs with DAKO-CZ, Kovis), containers, Defence (₹473 Cr BOM wagon order), marine, and global markets (MoU with RITES for Zimbabwe, Mozambique tenders).
  • Acquisition of Stone India (braking systems, engineering) and Bonatrans (wheelsets) to broaden railway offerings and reduce import dependency.
• Control Effectiveness: Partially Effective. Diversification is underway, but the core wagon business, heavily reliant on Railways, has grown proportionally faster in FY24.
• Potential Financial Impact: Adverse policy changes could significantly impact order inflow, revenue, and profitability. A 10-20% reduction in railway orders could translate to a ₹300-₹600 Cr revenue impact based on current wagon revenue.

2. Competition Risk: #

• Severity: High. Operates in competitive tenders (public sector) and faces established players and new entrants (private sector, global players).
• Likelihood: High. The industry is inherently competitive.
• Trend: Increasing. As the market grows, more players are attracted. Foreign entrants are a possibility.
• Mitigation Strategies:
  • Value-added diversification (special-purpose wagons, eLCVs, BESS containers).
  • Technological alliances (Tatravagonka, DAKO-CZ, Kovis, CAF, etc.) for advanced products.
  • Backward integration (foundry, wheel plant via Bonatrans) for cost control and supply security.
  • Focus on quality (ISO, AAR M-1003 certifications) and manufacturing excellence (automation).
  • Building relationships with a diverse customer base (+40% new clients in FY24).
• Control Effectiveness: Moderately Effective. JWL is winning orders, but margin pressure can arise from intense competition.
• Potential Financial Impact: Price wars could erode margins (EBITDA margin FY24: 13.5%, FY23: 12.3%). Loss of market share to competitors.

3. Diversification and New Business Integration Risk: #

• Severity: Medium to High. Successful execution of new ventures (eLCVs, drones, BESS, expanded container types, global markets) and integration of acquisitions (Stone India, Bonatrans) is crucial.
• Likelihood: Medium. New ventures carry inherent execution and market acceptance risks. Acquisition integration often presents challenges.
• Trend: Increasing, as the company actively pursues diversification and inorganic growth.
• Mitigation Strategies:
  • Strategic JVs and technology partnerships for new product segments.
  • QIP (₹403 Cr) to fund growth, working capital, and inorganic expansion.
  • Phased rollout plans (e.g., eLCVs targeting specific metros initially).
  • Experienced management team overseeing new ventures.
• Control Effectiveness: To Be Determined. Early stages for many new ventures. Successful QIP provides financial backing.
• Potential Financial Impact: Failure in new segments could lead to write-offs of investment and R&D costs. Integration challenges with acquisitions can delay synergy realization and impact profitability. For instance, the ₹1600 Cr planned investment in Bonatrans over two years needs to yield expected returns.

4. Cyclicality of Commercial Vehicle (CV) Industry: #

• Severity: Medium. CV load bodies constitute a portion of revenue (approx. 11.3% in FY24).
• Likelihood: High. The CV industry is inherently cyclical, linked to GDP and industrial activity.
• Trend: Currently Stable, but with potential for downturn. MD&A notes CV sales may decline in FY25 after a strong period.

Financial Analysis: Jupiter Wagons Limited (JWL) #

Long-Term Strategic Goals and Progress #

JWL aims to become a global contributor to mobility, defense, civic services, and healthcare, leveraging advanced technologies. Key priorities include market share growth, product portfolio expansion, cost efficiency, and improved profitability.

Progress:

• Order Book Growth: ₹7,102 crore as of March 31, 2024.
• Product Portfolio Expansion: Entry into brake systems (JWL DAKOCZ, JWL KOVIS), eLCVs (JEM TEZ, EV STAR CC), and drone manufacturing.
• Capacity Enhancement: Wagon manufacturing capacity increased to ~700 wagons/month, projected to reach ~1,000/month. Foundry capacity to increase by 8,000 MT/year.
• Market Diversification: MoU with RITES Limited for global projects.
• Financial Strengthening: QIP of ₹40,300 lakhs. Credit rating upgraded to ‘AA(-)’ (long-term) and ‘A1(+)’ (short-term) by CRISIL.

Competitive Advantages and Market Positioning #

JWL leverages vertical integration, extensive manufacturing infrastructure, a diversified product portfolio, technological collaborations, and a strong track record.

Advantages:

• Vertical Integration: Captive alloy-steel foundry and CRF mill. Acquisition of Bonatrans (wheelsets) and Stone India (braking systems, pantographs).
• Extensive Manufacturing Infrastructure: Eight facilities with a planned capacity of 10,000 wagons/year.
• Diversified Product Portfolio: Catering to over 20 sectors.
• Technological Collaboration: JVs and MoUs with global leaders.
• Established Track Record & Customer Base: Over 40 years of experience.
• Certifications: G-105, M-1003, ISO 9001, ISO 14001, LRQA, BVQI.

JWL is positioned as a leading comprehensive mobility solutions provider in India.

Innovation Initiatives and R&D Effectiveness #

JWL’s innovation strategy involves in-house development and strategic collaborations.

Initiatives:

• New Product Development:
  • Brake Systems: JVs with DAKO-CZ and Kovis D.O.O..
  • Electric Vehicles (EVs): Jupiter Electric Mobility launched eLCVs.
  • Drones: JV with TSAW Drones.
  • Specialized Wagons & Components: Development of specialized wagons and components.
• Process Innovation: Full automation in manufacturing facilities.
• R&D Focus: Developing intelligent wagon bogies, advanced track solutions, and enhancing energy efficiency.

M&A Strategy and Execution #

JWL focuses on acquisitions for backward integration, product portfolio enhancement, and self-reliance.

Acquisitions:

• Stone India Limited: Completed, enhancing railway offerings.
• Bonatrans India Private Limited: Acquired 94.25% stake. Planned investment of ₹1,600 crores.

Acquisitions are targeted at securing component supply, incorporating new technologies, and expanding market reach.

Management’s Track Record in Execution #

Management has demonstrated a strong track record in financial performance, order acquisition, capacity expansion, and strategic initiatives.

Key Achievements:

• Financial Performance: Highest-ever annual revenue (₹3,641 Cr, +76% YoY), EBITDA (₹491 Cr, +93% YoY), and PAT (₹333 Cr, +165% YoY) in FY24.
• Order Acquisition: Robust order book (₹7,102 Cr).
• Capacity Expansion: Upgrading and expanding manufacturing capacities.
• Strategic Initiatives: Acquisitions (Stone India, Bonatrans), JVs, and QIP.

Jupiter Wagons Limited - ESG and Financial Analysis (FY 2023-24) #

Environmental Metrics and Targets #

Energy Management #

• Prioritizes efficient energy use, decreasing environmental impact, and promoting sustainability.
• Secured permission for maximum demand increase (7 MVA to 10 MVA) for the Bandel unit to meet production needs.
• Implemented solar energy generation at Jabalpur and Indore plants with reverse metering for cost savings.
• Implemented LED lighting across plants and offices.
• Utilizes a Power Factor Correction System and a 33 kVA electric substation to optimize energy consumption.
• Introduced gas-fired heat treatment furnaces, reducing demand on heat power and fossil fuels.
• Planning to install solar power generation facility at the Bandel factory.
• Energy intensity per rupee of turnover (FY24): 0.000751 GJ/₹ Lakhs (Standalone).
• Total energy consumed from non-renewable sources (FY24): 2,73,641 GJ (Standalone).

Water Management #

• Adopts comprehensive water management, including water-efficient technologies, rainwater harvesting, conservation programs, regular audits, and stakeholder collaboration.
• Water is primarily utilized for domestic, washing, and gardening purposes.
• Implementing Sewage Treatment Plants (STPs) across all plants to monitor discharge, recycle wastewater for operations and gardening.
• Total water withdrawal (FY24): 25,011 KL (Standalone), primarily groundwater and third-party water.
• Water intensity per rupee of turnover (FY24): 0.0000687 KL/₹ Lakhs (Standalone).

Emission Management #

• Manages emissions through advanced manufacturing, renewable energy integration, robust monitoring, sustainable product development, and regulatory compliance.
• Total Scope 1 emissions (FY24): 10,887 tCO2e (BRSR).
• Total Scope 2 emissions (FY24): 36,855 tCO2e (BRSR).
• Total Scope 1 and Scope 2 emissions intensity per rupee of turnover (FY24): 0.000131 tCO2e/₹ Lakhs (BRSR).
• Reported NOx, SOx, and Particulate Matter emissions (BRSR, Section C, Principle 6).

Waste Management & Circular Economy #

• Committed to circular economy principles: reducing waste, reusing materials, recycling products.
• Employs lean manufacturing, recycling and reuse, waste segregation, and investment in waste management technologies.
• Plastic waste disposed of through authorized vendors.
• Hazardous waste stored in separated scrap yards and disposed of by authorized vendors.
• E-waste disposed of through authorized recyclers.
• Fly ash and sand waste repurposed for road construction; ~70% of sand waste recycled and reused in casting.
• Scrap metal from wagon manufacturing is melted and repurposed for casting rail components.
• Total waste generated (FY24): 11,624.37 metric tonnes (BRSR), primarily non-hazardous.

Biodiversity #

• Integrates biodiversity management, including green infrastructure development, habitat conservation, water body preservation, employee/community engagement, and regulatory compliance.

Targets #

• The BRSR mentions a commitment to provide occupational health and safety training to all workers.
• Commitment to adopt 3R principles (reduce, reuse, recycle) across operations.
• Maintain ‘Zero Tolerance’ towards human rights cases.

Social Responsibility Programs #

Employee Well-being and Safety #

• Prioritizes employee well-being and safety, leveraging AI, ML, and tech-enhanced HR processes.
• Implemented mental health support, wellness programs, and ergonomic workplace design.
• Spending on well-being measures (FY24): 0.11% of total revenue (BRSR).
• Provides health insurance and accident insurance to 100% of permanent and other-than-permanent employees and workers (BRSR).
• Maternity and Paternity benefits provided to 100% of eligible employees (BRSR).
• Retirement benefits (PF, Gratuity, ESI) provided to 100% eligible employees and workers, deducted and deposited with authorities (BRSR).
• Three out of six plants are ISO 45001 (Health Management System) certified.
• OHS SOP includes protocols for hazard identification, risk assessment, emergency response.
• Regular safety training, periodic health check-ups, on-site first-aid facilities.
• Safety committee meetings conducted monthly.
• In FY24, LTIFR for employees was 0.27 and for workers 0.18. No fatalities reported for employees or workers (BRSR).

Community Initiatives (CSR) #

• CSR expenditure in FY24: ₹2.5 Cr (Corporate Overview) / ₹250.00 lakhs (Board’s Report Annexure D).
• CSR policy focuses on social, economic, and environmental development of the community.
• Key CSR areas: Eradication of hunger and poverty, promoting healthcare (including preventive healthcare and sanitation), financial assistance for education & sports promotion, medical aid to destitute.
• FY24 initiatives:
  • Financial assistance to Maitreyi Charitable Trust for hospital infrastructure development.
  • Financial assistance to East Bengal Club for sports promotion and allied activities.
• Average net profit for CSR calculation (last 3 years): ₹11,991.28 lakhs; 2% CSR obligation: ₹239.83 lakhs (Board’s Report Annexure D).

Human Rights #

• BRSR policy and POSH policy incorporate human rights guidelines.
• Prohibits child and forced labor.
• Internal Complaints Committee (ICC) established to address sexual harassment and human rights grievances.
• No complaints on sexual harassment, discrimination, child labor, forced labor, wages, or other human rights issues reported in FY24 (BRSR).
• 100% of plants and offices assessed for child labor, forced/involuntary labor, sexual harassment, discrimination at workplace, and wages (BRSR).

Employee Development and Engagement #

• Focus on employee involvement, empowerment, and inclusivity.
• Expanded leadership development programs, resulting in a significant increase in internal promotions.
• Continuous training programs to increase employee skills and knowledge (100% coverage for employees and workers on health & safety and skill upgradation - BRSR).
• Mentorship programs.
• Internal talent marketplace for exploring new roles and projects.
• Team-building activities, social events, and celebrations.
• Rewards and recognition programs.
• Total employees as of March 31, 2024: 973 (Board’s Report).
• Turnover rate for permanent employees (FY24): 16.20% (BRSR).

Governance Structure and Effectiveness #

Board Structure #

• 11-member Board (as of March 31, 2024, and report date): Managing Director, 3 Whole Time Directors (including CEO), 1 Woman Independent Director, and 5 other Non-Executive Independent Directors.
• The Chairman of the Board and MD/CEO positions are separate.
• Board Diversity Policy in place, encouraging diversity of thought, experience, knowledge, perspective, age, and gender.

Committees #

• Audit Committee: Comprises 3 Independent Directors (Chairperson) and 1 Executive Whole Time Director & CEO. All members financially literate, one with accounting/financial management expertise. All recommendations accepted by the Board.
• Nomination and Remuneration Committee: 3 Non-Executive Independent Directors.
• Stakeholders Relationship Committee: 2 Non-Executive Independent Directors (Chairperson) and 1 Executive Whole Time Director & CEO.
• Risk Management Committee: 2 Non-Executive Independent Directors (Chairperson) and 1 Executive Whole Time Director & CEO.
• Corporate Social Responsibility (CSR) Committee: 2 Non-Executive Independent Directors (Chairperson) and 1 Whole Time Director.
• Other committees: Committee of Directors, QIP Committees (dissolved post-completion), Fund Raising Committee.

Policies and Ethics #

• Adheres to stringent governance standards, guided by robust corporate policies and a Code of Conduct.
• Key Policies: Archival, Board Diversity, Determination of Materiality, Board Evaluation, Fair Disclosure of UPSI, Familiarization for Independent Directors, Dividend Distribution, Insider Trading, Material Subsidiaries, Risk Management, Related Party Transactions, POSH, Whistleblower, Nomination & Remuneration, IT Policy.
• Vigil Mechanism/Whistle Blower Policy established; direct access to Audit Committee Chairman. No personnel denied access.
• Code of Conduct for Board and Senior Management; annual affirmation of compliance. CEO/CFO certification on financial statements and internal controls.

Effectiveness and Evaluation #

• Board evaluation conducted annually (self, committees, individual directors). Independent Directors evaluate Non-Independent Directors, Board as a whole, and Chairperson.
• Independent Directors met on March 30, 2024, to review performance and information flow.
• Familiarization programs for Independent Directors.
• Internal Financial Control Systems: Maintained adequate IFC system over financial reporting; operating effectively as of March 31, 2024. Statutory auditors issued an unmodified opinion on IFC.
• Internal Audit: Assigned to a leading auditing firm; reports reviewed by Audit Committee.

Risk Management #

• Robust risk management as a critical component of business strategy. Systematic evaluation of risk likelihood and potential consequences.
• Agile methodology, regular reviews.
• Key risks identified: Economy, Compliance, Competition, Reputation, Financial (raw material volatility), Operational (breakdowns), Cyber security, Diversification. Mitigation strategies outlined for each.
• Risk Management Committee oversees identification, monitoring, and review of risks.

Sustainability Investments and ROI #

R&D and Capex for Environmental/Social Impact #

• FY24 R&D investment in specific technologies for environmental/social impact: ₹0.
• FY24 Capex investment in specific technologies for environmental/social impact: ₹6,51,22,000.
• Capex initiatives in FY24 included: Power factor correction, installation of gas fire furnace, foundry expansion, machine for track product (eliminating dust), 2nd track installation (optimizing wagon route, reducing fossil fuel), new shed for radiography, installation of Sewage Treatment Plants.

Specific Technology/Solutions for Resource Efficiency #

• Optimization of energy use: Identifying significant machinery, monitoring energy consumption, power factor correction, load balancing. Outcome: Improved power factor from 79% to 98%.

Acquisitions with Sustainability Implications #

• Acquisition of Stone India Limited: Enhances railway offerings including braking systems. A high-reach pantograph manufacturing line is being established, aligning with 100% electrification of Indian Railways.
• Acquisition of Bonatrans India Pvt Ltd: In-house wheel plant, aims to reduce import dependency for wheelsets, potential for export hub. Investment of ₹1,600 crores planned over next two years for capacity and backward integration.

Return on Investment (ROI) #

• Highlights cost savings from energy efficiency (e.g., solar power, power factor correction reducing per unit cost to < ₹9) and reduced penalties.
• Investments in backward integration (foundry, wheel plant) are aimed at operational efficiency, self-reliance, and enhanced profitability.
• The financial impact of CSR (₹2.5 Cr spent) is primarily social return; direct financial ROI is not typically measured for such activities.
• The acquisition of Stone India and Bonatrans are strategic investments expected to enhance product portfolio, operational efficiency, and market position, leading to future financial returns.

ESG Ratings and Peer Comparison #

Credit Ratings #

• CRISIL upgraded long-term and short-term bank loans to ‘AA(-)’ & ‘A1(+)’ respectively, with a stable outlook, signifying improved credit quality and low risk of default.
• ICRA and ACUITE also provided ratings (AA- / A1+).

Peer Comparison #

• JWL stands out in India’s railway wagon sector with its captive foundry, a “rarity among industry players.”
• It boasts “one of the highest capacity complements” and is “India’s largest manufacturer of 25-tonne wagons.”
• The acquisition of Bonatrans makes JWL the “first rolling stock manufacturing company to possess our own wheel plant in India.”
• Aims to set industry benchmarks for excellence and manufacturing standards.

Jupiter Wagons Limited (JWL) - Financial Analysis (FY24) #

Executive Summary & Company Overview #

Jupiter Wagons Limited (JWL) is a leading provider of mobility solutions, specializing in railway wagon manufacturing, commercial vehicle load bodies, and related components. The company holds a strong order book of ₹7,102 crore as of March 31, 2024, and is strategically focused on backward integration, capacity expansion, and product diversification into new mobility and energy storage solutions. Acquisitions of Stone India Limited and Bonatrans India Private Limited are crucial for enhancing its capabilities in braking systems, railway engineering products, and wheelset manufacturing self-sufficiency.

Financial Performance Highlights (FY24 Standalone) #

JWL reported strong financial results in FY24:

• Revenue from Operations: Increased 76.06% to ₹3,641.25 crore from ₹2,068.25 crore in FY23. Railway wagon sales grew 91.31%, and load bodies & components increased 31.10%.
• EBITDA: Increased 93% to ₹491.07 crore from ₹254.01 crore in FY23. EBITDA margin improved 121 bps to 13.49% from 12.28%.
• Profit Before Tax (PBT): Increased 116% to ₹443.68 crore from ₹205.19 crore. PBT margin improved to 12.18% from 9.92%.
• Profit After Tax (PAT): Increased 165% to ₹332.90 crore from ₹125.65 crore. PAT margin stood at 9.14% compared to 6.08% in FY23.

Key Financial Ratios #

• Return on Net Worth (RoNW): Improved to 20.75% from 15.85%.
• Debt-Equity Ratio: Improved, indicating better leverage management.
• Current Ratio: Increased to 1.61 from 1.42, showing improved liquidity.
• Interest Coverage Ratio: Strengthened significantly to 12.55 times from 8.97 times.
• Debtors Turnover Ratio: Moderated to 10.67 times from 14.55 times.
• Inventory Turnover Ratio: Stood at 4.05 times.
• Dividend: A final dividend of ₹0.30 per share has been recommended, in addition to an interim dividend of ₹0.30 per share paid, totaling ₹0.60 per share for FY24.
• Growth Capital: Raised ~₹403 crore via Qualified Institutional Placement (QIP) for capex, working capital, and backward integration.
• Credit Rating: Upgraded by CRISIL to ‘AA(-)’ (Long Term) and ‘A1(+)’ (Short Term) with a stable outlook.

Segmental Performance & Outlook #

Wagons and Rail Components #

• Performance: This segment is the dominant revenue contributor, with 91.31% sales growth in FY24. Strong order inflow from Indian Railways and private players.
• Outlook (Management Guidance): Continued strong demand is anticipated, driven by Indian Railways’ “Hungry For Cargo” initiative, the National Rail Plan (targeting 45% freight market share by FY30), and significant investments in Dedicated Freight Corridors (DFCs). Completion of EDFC and WDFC, with proposals for three new DFCs (₹2 trillion investment), should drive wagon demand. Management expects growth aligned with the rail freight sector’s upward trajectory.
• Assumptions: Sustained government focus on railway infrastructure, achievement of DFC operational targets, and continued private sector participation.

Load Body & Components for Commercial Vehicles (CVs) #

• Performance: Sales grew by 31.10% in FY24.
• Outlook (Management Guidance): The CV industry is transforming (alternative fuels, electrification). While long-term demand is positive (8% CAGR projected for CV market till 2028), FY25 volumes are expected to plateau. Management anticipates a 10-12% upward trend in the application business due to OEM focus on fully built solutions and growth in the trailer segment.
• Assumptions: Sustained infrastructure capex, recovery in economic activity post-elections, and successful adaptation to evolving CV technologies.

Financial Analysis Report: Jupiter Wagons Limited (FY 2023-24) #

Auditor’s Opinion and Qualifications #

Standalone Financial Statements #

• The Statutory Auditors, Walker Chandiok & Co LLP, issued an unmodified opinion, stating that the standalone financial statements give a true and fair view in conformity with Ind AS.

  • Key Audit Matter (KAM): Revenue Recognition was identified as a KAM due to the multiplicity of products, varied customer specifications, diverse contract terms, and management judgment in determining transaction price including variable consideration.
  • Reporting under Companies (Audit and Auditors) Rules, 2014 (Rule 11(g)): An exception was noted regarding the accounting software (SAP). While the audit trail (edit log) feature at the application level was operational, the feature was not enabled at the database level to log any direct data changes. The auditors stated they did not come across any instance of the audit trail feature being tampered with, other than the consequential impact of this exception.

Consolidated Financial Statements #

• The Statutory Auditors, Walker Chandiok & Co LLP, issued an unmodified opinion, stating that the consolidated financial statements give a true and fair view in conformity with Ind AS.

  • Emphasis of Matter: Attention was drawn to Note 53 regarding non-settlement of foreign currency payables by subsidiary Bonatrans India Private Limited (BIPL) aggregating ₹5,811 Lakhs, due for more than six months (some over three years), which is beyond RBI permitted timelines. BIPL has communicated with the AD Bank and RBI for an extension. The opinion is not modified in respect of this matter.
  • Key Audit Matters (KAMs):
    1. Revenue Recognition: Same as standalone.
    2. Acquisition of Stone India Limited (SIL) and Bonatrans India Private Limited (BIPL): Accounting for these acquisitions was a KAM due to the materiality of amounts, management judgment in determining the acquisition date, identifying assets acquired and liabilities assumed, and their fair valuation (especially for BIPL which involved intangible assets and goodwill).
  • Other Matter: The audit relied on reports of other auditors for one subsidiary and four joint ventures (financials audited by others) and on management-certified financial information for parts of two newly acquired subsidiaries (SIL and BIPL for the post-acquisition period, deemed not material). Unaudited financial statements of one subsidiary (Habitation Realestate LLP, deemed not material) were also considered.
  • Reporting under Rule 11(g): Same exception regarding the audit trail feature in SAP at the database level was noted for the Group.

Internal Financial Controls (Standalone & Consolidated) #

• An unmodified opinion was issued on the adequacy and operating effectiveness of internal financial controls with reference to financial statements as of March 31, 2024.

Key Accounting Policies and Changes #

Basis of Preparation #

• Financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), on an accrual basis under the historical cost convention, except for certain financial instruments and plan assets measured at fair value.

Key Policies #

• Revenue Recognition (Ind AS 115): Recognized at a point in time when control of goods is transferred. Involves a 5-step process. Transaction price considers fixed and variable consideration (e.g., price adjustments for raw materials).
• Inventories: Valued at the lower of cost (weighted average for raw materials; manufacturing cost for finished goods/WIP) and net realizable value.
• Property, Plant and Equipment (PPE): Stated at cost less accumulated depreciation and impairment. Depreciation is on a straight-line basis over useful lives specified in Schedule II of the Companies Act, 2013.
• Goodwill: Arising on amalgamation/acquisition, tested for impairment annually or when indicators exist. Not amortized.
• Intangible Assets: Software is amortized over 3-5 years; customer relationships (from BIPL acquisition) over 10 years.
• Leases (Ind AS 116): Right-of-use assets and lease liabilities recognized. Short-term and low-value leases are expensed on a straight-line basis.
• Financial Instruments (Ind AS 109): Measured initially at fair value. Subsequent measurement depends on classification (amortized cost, FVTPL, FVOCI). Expected Credit Loss (ECL) model applied for impairment.
• Foreign Currency Transactions: Recorded at exchange rates on transaction dates. Monetary assets/liabilities restated at year-end rates.

Changes in Accounting Policies #

• No new standards or amendments issued by MCA were applicable to the company for the financial year ended March 31, 2024, that necessitated a change in accounting policies. Policies appear consistent year-on-year.

Internal Control Effectiveness #

Management’s Assessment #

• The Board’s Report and MD&A state that the company has a comprehensive internal control mechanism, and management has tested its effectiveness. Internal audits are conducted by a leading auditing firm and reviewed by the Audit Committee.

Auditor’s Opinion #

• The Statutory Auditors, in their Annexure B to both Standalone and Consolidated Audit Reports, issued an unmodified opinion, stating that the company has, in all material respects, adequate internal financial controls with reference to financial statements and such controls were operating effectively as of March 31, 2024.

Specific Weakness (Audit Trail) #

• The auditors’ report on compliance with Rule 11(g) regarding the audit trail feature in SAP (not enabled at the database level for direct data changes) indicates a specific internal control deficiency related to IT systems for financial record keeping, even though the application-level audit trail was functional.

Regulatory Compliance Status #

Overall Compliance #

• The Secretarial Audit Report (Annexure E to Board’s Report) states that the company has complied with the provisions of the Companies Act 2013, SCRA 1956, Depositories Act 1996, FEMA 1999 (to extent applicable), and various SEBI Regulations. No qualifications were made.