Jupiter Wagons and Titagarh Rail Systems: Key takeaways on growth, challenges, and future outlook

Wagon sales

Titagarh Rail Systems has outperformed Jupiter Wagons in terms of wagon sales. In H1FY25, TRSL sold 4,743 wagons — a 48% YoY growth, and the company aims to stabilise production at 12,000 wagons annually.

In comparison, Jupiter Wagons produced fewer wagons — 4,100 wagons — and is targeting 10,000 wagons annually.

Key Metrics

Product diversification

Product diversification is crucial for mitigating risks and ensuring stable topline growth. In this regard, Jupiter Wagons goes beyond wagon manufacturing. The company also produces several railway components, including wheels, axles, brake systems, commercial vehicle bodies, and containers.

Additionally, JWL is expanding into new markets like electric vehicles and energy storage systems, which are expected to contribute nearly 50% of its revenue in four years.

On the other hand, Titagarh Rail Systems remains more focused on wagon production and is now investing in wheelset manufacturing to support increasing demand.

Profitability and revenue growth: JWL Leads

When it comes to profitability, Jupiter Wagons has the edge. Its EBITDA margin stood at 14.6% in H1FY25, up from 13.3% last year. In contrast, Titagarh’s EBITDA margin came in at 11.8%, slightly lower than last year’s 11.98%.

JWL also leads in profit growth. Its profit after tax (PAT) grew 25.1% YoY, compared to TRSL’s PAT growth of 12.98%.

A similar trend is observed in revenue growth. JWL’s revenue from operations increased 15.7% YoY, while TRSL’s revenue grew by 6.16% YoY.

Share price performance

JWL has outperformed Titagarh, with a one-year return of 67.20%, compared to Titagarh's one-year return of 25.58%.

Challenges faced by both companies

Despite their strong performance, both companies face challenges:

• Jupiter Wagons is experiencing supply chain bottlenecks for critical components like brake systems and wheels.
• Titagarh Rail Systems faced delays in production due to visa issues with China, though this problem has now been resolved.

Outlook

Both companies remain optimistic about the future of the Indian railway industry:

• Titagarh Rail Systems is ramping up its wagon production to 12,000 units per year and investing in a facility to produce 100,000 wheelsets annually.
• Jupiter Wagons is focusing on electric trucks and railway batteries, which are expected to contribute significantly to its revenue over the next few years.

Conclusion

The two companies analysed are performing well in the industry, though margin differences exist. However, JWL is expanding more aggressively into trucks and railway batteries, which aligns synergistically with its current operations.