Jupiter Wagons: PAT growth of 165% & Revenue growth of 77% in FY24 at 72 PE

Revenue growth of 50% expected in FY25. Order book at 1.5X FY25 expected revenue in place to support FY25 growth. JWL looking to grow from Rs 3600+ cr in FY24 to Rs 10,000 cr by FY27 or FY28

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1. One of the largest player in India’s Railway sector

jupiterwagons.com | NSE: JWL

2. FY21-24: PAT CAGR of 84% & Revenue CAGR of 54%

3. Strong FY23: PAT up 151% & Revenue up 76%

4. Strong 9M-24: PAT up 170% & Revenue up 87%

5. Strong Q-24: PAT up 156% & Revenue up 57% YoY

PAT up 25% & Revenue up 24% QoQ

6. Strong FY24: PAT up 165% & Revenue up 77%

7. Business Metrics: Strong & improving return ratios

8. Outlook: Revenue growth of 50%+ in FY25

i. FY25: Revenue growth of 50%

Revenue expectation of Rs 5,500-5,600 cr in FY25 implies a 50% growth in FY25

ii. FY25: Strong revenue visibility. Order book 1.5X FY25 revenue

Assuming about Rs 5,500 cr in FY24 implies order book in place to support 1.5X FY25 expected revenue. 75% of existing order book to be executed in 18 months and the remaining 25% to be executed within FY25

• Order backlog of INR 7,10,166 lakh our highest ever

• About 75% would be wagon, and I think these order books have to be executed over the next 18 months.

• Entire remaining almost about INR 1,700 crores, INR 1,800 crores of CV business would be executed in the current year.

iii. Rs 10,000 cr revenue by FY27 or FY28 - Revenue CAGR of 29-40%

9. PAT growth of 165% & Revenue growth of 77% in FY24 at a PE of 72

10. So Wait and Watch

If I hold the stock then one may continue holding on to JWL.

• Coverage of JWL was initiated after Q1-24 results. The investment thesis has not changed after a strong FY24. The delivery of a strong FY24 has increased confidence in the management to deliver a stronger FY25

• The EBITDA margin was 13.3% in Q4 FY '24, highlighting our focused execution strategy as we continue to report industry-leading margins.

• We are proud to have achieved the significant milestone of surpassing INR 1,10,000 of revenue in a single quarter for the first time ever.

• JWL management is quite confident about its prospects in FY25 with expectations of 50%+ top-line growth

We anticipate a significant increase in execution and performance throughout fiscal year 2025 and remain confident in the growth trajectory of these businesses.

• JWL management indicating that the journey to Rs 10,000 cr of revenue will be completed in the next 3-4 years is a reason to continue with the stock.

11. Join the ride

If I am looking to enter JWL then

• JWL has delivered PAT growth of 165% & Revenue growth of 77% in FY24 at a PE of 72 which makes valuations fairly priced in the short term.

• JWL is guiding for 50% revenue growth on the back of a strong order book in FY25 at at a PE of 72 which makes valuations fairly priced in the short term

• Over the longer term JWL is guiding for revenue CAGR of 29-40% till FY27/FY28 at PE of 72 valuations reasonably priced in the short term

• There is opportunity in JWL if execution goes as per plan. On the flip side the margin for error is small. One bad quarter and the asking rate to sustain a PE of 72 will become quite high. At a PE of 72, the stock can become expensive quite quickly if execution falters by a little.

• Positions need to be built over time over bad days or periods when the stock is not doing well.

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Previous coverage of JWL

Jupiter Wagons: PAT up 280% & Revenue up 129% in H1-24 with similar trajectory for H2-24 at a PE of 54

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