Titagarh Railsystems vs Jupiter Wagons : Railways are used to transport goods in bulk to any location with connectivity, which is beneficial to the logistics industry. The growing population and faster transportation will make railways a better choice for travel due to cost, comfort, and efficiency.

Titagarh received an order for Rs. 857 crore from GMRCL for 72 standard gauge cars, and Jupiter Wagon received an order for Rs. 1,617 crore from Railways for 4,000 wagons. These orders are just a part of their mammoth order book. In this article, we will look at Titagarh Railsystems vs Jupiter wagons which are into manufacturing wagons, containers, and coaches for railways.

Titagarh Rail systems vs Jupiter Wagons

Company Overview

Titagarh Rail System logo Image

Titagarh Railsystems Jagadish Prasad Chowdhary founded Titagarh Wagons later renamed Titagarh Railsystems, in 1997 and the company is headquartered in Kolkata, West Bengal. Titagarh stretches its global reach and presence through factories in India and Italy. The company caters to passenger railway rolling stock, including trains and metros. 

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In 2015, the company acquired a 100% stake in Titagarh Firema SpA, an Italian company, which aided its entry into the Italian market and increased its expertise in manufacturing passenger rolling stock. The product range expands to include electric propulsion equipment such as traction motors and vehicle control systems. Titagarh also designs and manufactures container flats, grain hoppers, cement wagons, clinker wagons, and tank wagons.

Jupiter Wagon Logo Image

Jupiter Wagons M.L. Lohia founded the company in 1979 in West Bengal. Previously, it was named Commercial Engineers & Body Builders Co. Limited (CEBBCO). Jupiter Wagons completed a reverse merger with CEBBCO and went public on June 30, 2022. Jupiter’s product line includes track solutions, wagons and their accessories, brake systems and discs, commercial vehicle load bodies, and electric vehicles and containers. 

The company has manufacturing integration and a pan-India presence in 7 locations (Jabalpur, Jamshedpur, Kolkata, Bandel and Indore).For more than a decade, the company has served the growing needs of demanding private sector giants such as Tata Motors, Volvo, Eicher Motors, and Ashok Leyland, as well as public institutions such as Indian Railways and the Indian Armed Forces.

Segment Analysis

Titagarh Rail systems revenue was generated by two segments: Freight Rail Systems, which contributed 80.98% of total revenue in FY23 and increased by 76.81% year on year. Passenger rail systems contributed the remaining 19.01% of revenue in FY23, a 171.90% increase year on year. As of March 31, 2023, the order book stood at Rs. 27,546 crore, which is 17 times the order book for FY23.

Jupiter Wagons: In FY23, Jupiter Wagons domestic revenue accounted for 99.87% of total revenue, with exports accounting for the remaining 0.12%.The company recognizes its revenue under one segment which is metal fabrication comprising load bodies for commercial vehicles and rail freight wagons and manufacturing of railway transportation equipment. The orderbook in FY23 was 58,200 crores, out of which 50,000 crores were for wagons which provides visibility for future years.

Industry Analysis

The Indian rail freight industry is experiencing growth and improvements, with ambitious plans and increased investment by the government and schemes such as Gati Shakti, which aim at enhancing capacity, efficiency, and sustainability. The annual freight target is expected to rise from 1400 million tonnes to 3000 million tonnes by 2027, implying an increase in the wagon fleet from 336,900 to 500,000 by 2027.

The railway sector in India aims to contribute about 1.5% to the country’s GDP by building infrastructure to support 45% of the modal freight share of the economy. The National Rail Plan aims to increase railways’ freight modal share to 45% by 2030, up from 27% currently. Railway passenger traffic is projected to reach around 12 billion per year by 2031, and freight traffic is expected to cross 8,220 million tonnes by 2031.

Titagarh Railsystems vs Jupiter WagonsFinancials

Disclaimer: Jupiter wagons consolidated data was available from FY21 to FY23 because of their merger with CEBBCO.  FY19 and FY20 data of Jupiter Wagons are on a standalone basis.

Revenue and Net Profit:

Titagarh Railsystems vs Jupiter Wagons had revenue of Rs. 2,779.59 crore and Rs. 2,068.24 crore in FY23 as compared to Rs. 1,467.50 crore and Rs. 1,178.35 crore in FY22. 

Particulars/ Financial YearRevenue (Cr.)
Titagarh RailsystemsJupiter Wagons
2022-23₹ 2,779.59₹ 2,068.24
2021-22₹ 1,467.50₹ 1,178.35
2020-21₹ 1,520.63₹ 995.75
2019-20₹ 1,766.32₹ 125.74
2018-19₹ 1,710.77₹ 215.79

Titagarh Railsystems vs Jupiter Wagons net profits in FY23 were Rs. 125.71 crore and Rs. 120.67 crore as compared to Rs. -0.68 crore, and Rs. 49.65 crore in FY22, respectively.

Because of the mergers and strong order growth, both companies’ revenue and net profits have increased exponentially. Jupiter’s revenue increased due to increased sales of railway wagons, load body components, and container business. Further years will yield more clarity on its growth prospects based on its ability to convert its order book into revenues.

Particulars/ Financial YearNet Profit (Cr.)
Titagarh RailsystemsJupiter Wagons
2022-23₹ 125.71₹ 120.67
2021-22₹ -0.68₹ 49.65
2020-21₹ -18.78₹ 53.39
2019-20₹ - 36.14-₹ 0.13
2018-19₹ - 22.52₹ 88.67

Profit Margins

Titagarh Railsystems vs Jupiter wagons OPM were 10.23% and 12.43% in FY23, respectively, compared to 12.23% and 9.95% in FY22.

Particulars/ Financial YearOPM (%)
Titagarh RailsystemsJupiter Wagons
2022-2310.23%12.30%
2021-2212.23%9.95%
2020-216.90%10.86%
2019-203.44%4.27%
2018-192.66%5.98%

Titagarh Railsystems vs Jupiter wagons NPM were 4.52% and 5.83%, respectively, in FY23, compared to -0.04% and 4.21% in FY22. Both companies’ OPMs improved in FY22, Titagarh’s margin fell marginally and Jupiter improved in FY23. Titagarh’s increased costs, such as raw material costs, impacted its revenue margin. 

Particulars/ Financial YearNPM (%)
Titagarh RailsystemsJupiter Wagons
2022-234.52%5.83%
2021-22-0.04%4.21%
2020-21-1.18%5.36%
2019-20-2.05%-5.33%
2018-19-0.96%-9.09%

Return Ratios

Titagarh and Jupiter RoE were 13.93% and 16.24% in FY23, respectively, up from -0.07% and 7.55% in FY22.

Particulars/ Financial YearRoE (%)
Titagarh RailsystemsJupiter Wagons
2022-2313.93%16.24%
2021-22-0.07%7.55%
2020-21-2.23%8.44%
2019-20-4.57%-0.14%
2018-19-1.78%-19.64%

Titagarh and Jupiter RoCE were 16.82% and 23.88% in FY23, respectively, up from 8.87% and 11.74% in FY22.

Due to mergers and acquisitions that produced better measures, both companies ratios have improved. In this instance, nevertheless, Jupiter has a higher RoE and RoCE than Titagarh. However, in the future, we must determine whether the returns are sustainable or improve over time.

Particulars/ Financial YearRoCE (%)
Titagarh RailsystemsJupiter Wagons
2022-2316.82%23.88%
2021-228.87%11.74%
2020-214.27%11.24%
2019-201.87%2.36%
2018-191.08%1.06%

Debt Analysis

Titagarh and Jupiter’s debt-to-equity ratios in FY23 were 0.71 and 0.29, respectively, compared to 1.05 and 0.21 in FY22.

Particulars/ Financial YearDebt to Equity
Titagarh RailsystemsJupiter Wagons
2022-230.710.29
2021-221.050.21
2020-210.980.22
2019-201.030.37
2018-190.915.75

Titagarh Railsystems vs Jupiter Wagons Interest Coverage were 3.24 times and 7.94 times in FY23, respectively, compared to 2.81 times and 5.16 times in FY22.

Both companies have reasonable D/E ratios; Titagarh has reduced debt, while Jupiter has maintained but increased debt in FY23. Both companies’ interest coverage ratios have improved, but the increase in profit margins and decrease in interest costs will help the company strengthen its financial position.

Titagarh’s most recent QIP was for working capital and outstanding debt, which can assist the company in debt reduction. Jupiter QIPs aimed at expansion and debt can be sustained.

Particulars/ Financial YearInterest Coverage
Titagarh RailsystemsJupiter Wagons
2022-233.247.94
2021-222.815.16
2020-210.924.12
2019-200.36-0.48
2018-190.270.11

Key Metrics

Here are some of the key metrics of Titagarh and Jupiter.

ParticularsTitagarh RailsystemsJupiter Wagons
CMP₹ 958.7₹ 349.9
Market Cap (Cr.)₹ 13,994 ₹ 16,324
EPS (TTM)₹ 18.97₹ 6.44
Stock P/E (TTM)49.7354.97
Price to Book Value13.1517.63
Promoters Holding (%)42.46%70.12%
Enterprise Value (%)₹ 3,285.09₹ 3,688.74
Net Interest Margin4.52%5.83%

Titagarh Railsystems vs Jupiter WagonsFuture Plans

Titagarh Railsystems

  • The company is looking to raise up to Rs.700 crore through QIP and is looking for a JV in the shipbuilding segment to diversify.
  • Titagarh intends to increase its production capacity from 600 to 700 wagons per month to 1,000 wagons per month by the end of the year.
  • Titagarh has a strategic partnership with ABB for metro projects and uses technology, expertise, and electrical components. It also entails obtaining manufacturing rights and production licenses for traction motors.

Jupiter Wagons

  • The company intends to enter the brake discs and brake systems segment for various railway segments, passenger coaches, freight wagons and Vande Bharat coaches, with the goal of increasing revenue to Rs.5 billion and gaining a 20% market share within 3 to 4 years.
  • The company is opening up an electric division that is concentrated on the commercial vehicle segment with strategic partner Green Power, with products like JEM TEZ and EV Star CC and would like to further increase their presence in EV market.
  • The acquisition of Stone India might increase their business by leveraging their licenses and infrastructure abilities. The CAPEX was added to the acquisition and amounted to an additional 30 crore for modernization and operations.

Conclusion

As we near the end of the article, let us take a look at these businesses. The government’s investment in railway infrastructure and connectivity benefits both companies. These companies’ revenues have increased, and their profit margins have improved. 

Diversification of business may help to mitigate risks associated with technological advancements and competition, which are two of the industry’s risks. What are your thoughts on the prospects of both companies? According to your analysis, which companies have a competitive advantage? Let us know your views in the comments section below.

Written by Santosh

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