Target: ₹824
CMP: ₹696
Jupiter Wagons is positioned for substantial growth between FY25E-FY28E, driven by increased wagon production and a strategic diversification plan implemented by the management into segments like wheel manufacturing, brake systems & disc, E-LCV etc.
At a macro level, the capital expenditures by Indian Railways on the Dedicated Freight Corridor are expected to introduce approximately 600,000 new wagons by 2030. In FY24, Jupiter Wagons reported revenues of ₹3,643.70 crore which grew by 76 per cent over FY23, achieving an EBITDA of ₹489.20 crore and a PAT of ₹331 crore.
We anticipate healthy future growth of 35 per cent CAGR for FY25E-FY26 driven by a robust order book that is double its FY24 revenue and expected growth in wagon orders in coming quarters. Management is also actively diversifying into wheel manufacturing, containers, and other sectors to improve overall revenue & profitability.
We recommend a ‘Buy’ rating for Jupiter Wagons, targeting a price of ₹824, reflecting a P/E multiple of 53.8x based on an anticipated EPS of 15.3 (FY26). This recommendation is underpinned by substantial growth prospects driven by rising wagon orders resulting from investments in the DFC. Additionally, the company’s diversification into multiple segments promises improved margin profiles compared to its current offerings.