Titagar Rail Systems vs Jupiter Wagons

Titagarh Railsystems vs Jupiter Wagons: Railways are used to transport goods in bulk to any location through connectivity, which is beneficial for the logistics industry. With population growth and faster transportation, rail will become a better choice for travel due to its cost, comfort, and efficiency.

Titagarh received orders for Rs. 857 million was paid by GMRCL for 72 standard gauge vehicles and the Jupiter Wagon was ordered for Rs. 161.7 billion from railways for 4,000 wagons. These orders are only part of a larger order book. In this article, we take a look at Titagarh Railsystems and Jupiter Wagon, manufacturers of railway wagons, containers and carriages.

Comparison of Titagarh Railway System and Jupiter Wagons

Company Overview

Titagarh Railway System Jagadish Prasad Chowdhary founded Titagarh Wagons in 1997, later renamed as Titagarh Railsystems, and the company is headquartered in Kolkata, West Bengal. Titagarh is expanding its presence and presence globally through factories in India and Italy. The company deals with passenger rail vehicles, including trains and subways.

In 2015, we acquired a 100% stake in Italian company Titagarh Firema SpA, supporting our entry into the Italian market and increasing our expertise in passenger train manufacturing. 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 ML Lohia founded the company in 1979 in West Bengal. Formerly Commercial Engineers & Body Builders Co. Limited (CEBBCO). Jupiter Wagons completed its reverse merger with CEBBCO and went public on June 30, 2022. Jupiter’s product line includes track solutions, wagons and accessories, brake systems and discs, commercial vehicle load bodies, electric vehicles and containers.

The company has manufacturing integration and a pan-India presence in seven locations (Jabalpur, Jamshedpur, Kolkata, Bandel and Indore). For over a decade, the company has been meeting the growing requirements of demanding private sector giants such as Tata Motors and Volvo. , Eicher Motors, Ashok Leyland, Indian Railways and public sector organizations such as the Indian Armed Forces.

segment analysis

Titagarh Railway System Revenues came from two segments. Freight rail systems contributed 80.98% of total revenue in FY23, up 76.81% year-on-year. Passenger rail systems contributed the remaining 19.01% of FY23 revenue, an increase of 171.90% year-on-year. As of March 31, 2023, the order value is Rs. This is 17 times the FY23 orders at ₹27,546 crore.

Jupiter Wagon: In FY23, Jupiter Wagon’s domestic revenue accounted for 99.87% of total revenue, while exports accounted for the remaining 0.12%. The company recognizes revenue from one segment, the metal manufacturing segment, which consists of rail manufacturing and loading bodies for commercial vehicles and rail freight wagons. Transportation equipment. The order volume in FY23 was KRW 5.82 trillion, of which KRW 5.0 trillion was for wagons, providing visibility into the future.

industry analysis

The Indian rail freight industry is experiencing growth and improvement through the government’s ambitious plans and initiatives such as Gati Shakti, which aims to increase investment, increase capacity, efficiency and sustainability. The annual freight transport target is expected to increase from 1.4 billion tonnes to 3 billion tonnes by 2027, which means the wagon fleet will increase from 336,900 to 500,000 units by 2027.

India’s railway sector aims to build infrastructure to support 45% of the modal freight share in the economy, contributing around 1.5% to the country’s GDP. The National Rail Plan aims to increase rail’s share of freight transport from 27% currently to 45% by 2030. Rail passenger traffic is expected to reach approximately 12 billion tons per year by 2031, while freight traffic is expected to exceed 8.22 billion tons by 2031.

Titagar Rail Systems vs Jupiter Wagons – finance

disclaimer: Jupiter Wagon consolidated data was available from FY21 to FY23 due to the merger with CEBBCO. Jupiter Wagons’ FY19 and FY20 data is on a standalone basis.

Revenue and Net Profit:

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

The net profit of Titagarh Railsystems and Jupiter Wagons in FY23 was Rs. 125.71 crore and Rs. 120.67 crore compared to Rs. -0.68 crore and Rs. 49.65 billion each in FY22.

The merger and strong order growth led to exponential growth in both companies’ sales and net profits. Jupiter’s sales increased due to increased sales of its rail wagon, freight car parts and container businesses. Over the next few years, growth prospects will become clearer based on our ability to convert order books into revenue.

profit

Titagarh Railsystems vs Jupiter Wagon OPM was 10.23% and 12.43% in FY23 and 12.23% and 9.95% in FY22, respectively.

Titagarh Railsystems vs Jupiter Wagons NPM was 4.52% and 5.83% respectively in FY23 and -0.04% and 4.21% in FY22. OPM of both companies improved in FY22, Titagarh’s margins declined slightly and Jupiter’s improved in FY23. Rising costs at Titagarh, such as raw material costs, have impacted its profit margins.

rate of return

Titagarh and Jupiter RoE increased to 13.93% and 16.24% respectively in FY23 from -0.07% and 7.55% in FY22.

Titagarh and Jupiter RoCE increased to 16.82% and 23.88% respectively in FY23 from 8.87% and 11.74% in FY22.

Better-taken mergers and acquisitions have improved the ratios of both companies. Nevertheless, in this case Jupiter has higher RoE and RoCE than Titagarh. But going forward, we’ll need to determine whether returns are sustainable or just improving over time.

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.

Titagarh Railsystems vs Jupiter Wagons interest coverage was 3.24x and 7.94x respectively in FY23, which was 2.81x and 5.16x in FY22.

Both companies have reasonable D/E ratios. While Titagarh reduced its debt, Jupiter maintained its debt but increased its debt in FY23. Both companies’ interest coverage ratios have improved, but their financial soundness is expected to be strengthened due to increased profit margins and reduced interest costs.

Titagarh’s most recent QIP was for working capital and outstanding debt, which could help reduce the company’s debt. Jupiter QIP targeting expansion and debt may persist.

key indicators

Below are some of the key indicators of Titagarh and Jupiter.

Titagar Rail Systems vs Jupiter Wagons – Future Plans

Titagarh Railway System

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

Jupiter Wagon

• The company plans to enter the various railway segments, brake discs and brake systems for passenger coaches, goods coaches and Vande Bharat coaches, with the aim of increasing its revenue to Rs 5000 crore and achieving 20 per cent market share in three to four years. .
• Together with its strategic partner Green Power, the company seeks to further expand its presence in the EV market by opening an electric division focused on the commercial vehicle segment with products such as JEM TEZ and EV Star CC.
• Acquiring Stone India will enable us to grow our business by leveraging our licensing and infrastructure capabilities. CAPEX added to the acquisition amounted to an additional $30 million for modernization and operations.

conclusion

We’ll take a look at these companies as we near the end of the article. Government investment in rail infrastructure and connectivity benefits both companies. These companies’ sales have increased and profit margins have improved.

Business diversification can help mitigate the risks associated with technological advancements and competition, two risks in the industry. What do you think about the prospects for both companies? According to your analysis, which companies have a competitive advantage? Let us know your thoughts in the comments section below.

Written by Santosh

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