City-based Jupiter Wagons is betting on multiple vectors of growth that may result in the entity earning as much revenue from wagons in two years as from high-margin railway components, commercial vehicles and container businesses.

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. While the stock prices of the company have zoomed from Rs 15.30 on April 1, 2021, to Rs 374.15 on March 28, 2024, the market cap to sales ratio has improved from 0.5 to 4.8 during the same period.

“Today wagon is the biggest business for us contributing around 60-70 per cent of the revenue. But in the next two years, the share of wagons could be less than 50 per cent as we expand the business on the wheels, brakes and commercial vehicles. These are businesses where margins are much higher,” said Vivek Lohia, managing director, Jupiter Wagons.

The company has planned a capex plan of around Rs 2,000 crore to expand capacity across its business verticals.

Wagons capacity

Buoyed by the rising demand for wagons from the Indian Railways, Jupiter Wagons has stepped up its production and foundry unit capacity.

“This year we will be very close to producing about 10,000 wagons. Next year, the target is to be close to 12,000 wagons. We have already done the expansion that is required in our facilities in Calcutta and Jabalpur. In Calcutta, we have invested more than Rs 200 crore in the last 18 months to expand the foundry capacity. In Jabalpur, we are adding foundry capacity of 20,000 tonnes of casting and we will invest close to Rs 300 crore incremental,” Lohia said during an interaction with The Telegraph last week.

“What we understand is there could be a requirement of 50,000-60,000 additional wagons from the railways. So, in terms of demand, we don’t see a challenge in the next 3-4 years. Our whole focus therefore is how we can increase capacity,” he added.

Replacement demand

Lohia said the company has forged partnerships and made acquisitions to expand the components business. It decided to join hands with companies with core competence instead of wading into new categories from ground up. “We do not want to reinvent the wheel,” the MD explained.

The company has recently announced the acquisition of Bonatrans India Private Limited for Rs 271 crore which already has a plant in Aurangabad, with a production capacity of 20,000 wheels and 10,000 axles, annually.

“Currently India is a net importer of wheels, sourcing close to 100,000 wheelsets from China to meet its requirement in passenger and metro coaches and freight wagons. We see this as a big opportunity for us for domestic manufacturing. Also, with Tatravagonka as a strategic investor in Jupiter Wagons (with a 19.24 per cent stake), they are keen on export opportunities in Europe,” Lohia said.

“Overall, we expect a business of around Rs 1,000 crore from forged wheels in the next 3-5 years,” he added.

Jupiter Wagons has also formed joint ventures with Slovenian company Kovis and Czech company Dako to make brake systems for high-speed passenger trains including Vande Bharat and freight cars. The company has also acquired Stone India through the NCLT route which will further bolster its capabilities in the brake systems business.

“Including Stone India, in the next 3-4 years we want the braking business to be about Rs 1,000 crore,” Lohia said.

“We aim to lock the entire value chain. We were already making wagons. The two major areas that were left out were braking systems and wheel sets. With these available, 80 per cent of the whole value chain is now in-house,” he said.

Commercial EVs

The company has also expanded into road mobility and is also looking to launch its electric commercial vehicles under Jupiter Electric Mobility brand early next fiscal.

“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 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.