Jupiter Wagons chugs along to add value and volume to its business
Jupiter Wagonssays that dedicated corridors plans of Indian Railways can bring in an order windfall.
- It also sees a ‘substantial volume upside’ from its electric LCV business.
- The company also kick started its high-margin business of brake disc assemblies.
The Kolkata-based wagon maker is diversifying into new areas like electric vehicles. It sees a “significant value upside” from its new business of manufacturing electric light commercial vehicles.
Vivek Lohia, managing director of Jupiter Wagons admits that the auto sector business is not a very high margin business, but eLCVs has a good market size — 400,000-600,000 per annum — and is growing.
“There are huge savings that come from operating electric vehicles. With good economics and the growing charging infrastructure, there will be a lot of conversion. Definitely in the long term, the business will become subsidy agnostic,” says Lohia.
The company is expected to start rolling out the LCVs in the last quarter of this financial year. The B2B business intends to bridge the gap in terms of ‘last mile connectivity’ which the logistics sector now lacks.
The push of private capex
The company’s first quarter results are also in line with the heavy expectations from the market. Its net profit registered a multifold jump to ₹62.8 crore from ₹12.8 crore in the same quarter last year. Its revenues also went up by 155%.
Its margins expanded by 260 basis points YoY on improved product mix and the introduction of value-added products. The company is sitting on an orderbook of ₹6,122 crore as of the end of June 30, and sees a healthy growth ahead.
“There is huge capex by the private sector which is a game changer for us,” says Lohia. The steel and cement sectors are looking to double their capacities in the next three to five years, and the logistics around it would be huge, Lohia says.
Advertisement“The Indian Railways is looking to build two dedicated steel and cement corridors. Also, exim business is picking up and new ports are coming up, which also plays a crucial part for us,” he adds.
The company has been entering new geographies as well. It has forged joint ventures with mini-ratna company RITES for freight wagons. The PSU company has experience with global tenders and also has offices across the world.
The JV participated in global tenders in Zimbabwe and Mozambique, also hopes to gain orders in the African continent and is also eyeing for opportunities in Bangladesh, Sri Lanka and even Australia.
“Over time, we see getting 10-15% of our business from exports and international orders,” Lohia says.
In addition to more business, the company has also just made its entry into the high margin business of brake disc assemblies for the railways sector.
It also partnered with European company Kovis Proizvodna družba for a manufacturing JV to cater to high speed passenger trains and additionally to export to Asia-Pacific region as well as the EU. It has started delivering its products in the Indian market. They are also participating in regional tenders and expect a sizable order book in the next three to four months.
Over time however it has widened its interests from being a railway focussed company — with its new ventures providing it with volume and value.
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