2 weeks ago
Jefferies Cuts Jupiter Wagons Target, Sees 27% Downside
Jefferies is a financial company that studies businesses and their shares.
It lowered its expected price for Jupiter Wagons from Rs 210 to Rs 185.
This suggests the brokerage thinks the stock could fall by about 27%.
The change followed weaker-than-expected results for the June quarter.
Jupiter Wagons still has orders worth Rs 3,000 crore for 7,000 wagons.
However, approvals for new wagon designs slowed production and delivery.
The company’s profit margin also fell compared with last year.
Jefferies expects wagon sales to remain a large part of the business.
A new wheel factory and more wagon orders could improve the outlook.
Jefferies lowered Jupiter Wagons’ price target to Rs 185 from Rs 210, implying 27% downside.
The brokerage cut its FY27E–29E earnings-per-share estimates by 6–20% after a June-quarter miss.
Jupiter Wagons’ Rs 3,000 crore order book covers 7,000 wagons, with 80% from private-sector customers.
Jefferies said wagon-design approvals slowed execution and gross margins fell 700 basis points year over year.
A new wheel-manufacturing plant and stronger wagon orders could provide upside, but the plant is expected only by FY28-end.
- Who
- Jefferies and Jupiter Wagons.
- What
- Jefferies cut Jupiter Wagons’ price target and earnings estimates while identifying possible upside catalysts.
- Where
- The article discusses Jupiter Wagons’ railway and wheel-manufacturing businesses; no specific location is stated.
- When
- The assessment followed Jupiter Wagons’ June-quarter results; the new plant is expected to commission by the end of FY28E.
- Why
- Jefferies cited a June-quarter earnings miss, slower wagon execution, lower margins, valuation concerns and limited visibility on a large wagon tender.
Jefferies’ concerns
Potential upside
Earnings outlook
Jefferies’ concerns
Jefferies cut FY27E–29E EPS estimates by 6–20% after the June-quarter miss and said standalone EBITDA missed its estimate by 12%.
Potential upside
Jefferies still estimates 23% annual EPS growth for Jupiter Wagons over FY26–30E.
Order execution
Jefferies’ concerns
New-wagon design and prototype approvals slowed execution, while visibility on the 1 lakh Wagon tender remains low.
Potential upside
An uptick in wagon orders and approval of new designs could improve execution and earnings.
Manufacturing expansion
Jefferies’ concerns
The new wheel-manufacturing plant is not expected to commission until FY28E-end, delaying a key catalyst.
Potential upside
A strong pickup in profits from the wheel-manufacturing joint venture and the new plant could provide upside.
Key facts
- New price target
- Rs 185, reduced from Rs 210
- Implied downside
- 27%
- FY27E–29E EPS revision
- Reduced by 6–20%
- Wagon order book
- Rs 3,000 crore, covering 7,000 wagons
- Private-sector orders
- 80% of the wagon order book
- Estimated EPS growth
- 23% annually over FY26–30E
- Plant timeline
- The new wheel-manufacturing plant is expected to commission by FY28E-end
Quotes
Jefferies analyst
Investment banking analyst at Jefferies
“"We cut FY27E-29E EPS by 6-20 per cent to reflect Jun-26 quarter miss."”
businesstoday.in
Sources
Related news
Jupiter Wagons, Texmaco, Titagarh: Best railway stock for freight boom?
Private Investment Set to Boost India's Rail Wheel Manufacturing, Exports
Jefferies Backs Six Indian Stocks With 15% To 39% Upside
Railway Stocks Rise After Government Approves Major Infrastructure Projects
VA Tech Wabag Stock: Orders Support Bullish Brokerage Outlook
Brokerages Favor Indian Auto Stocks as Truck Sales Surge
Jefferies Sets Target Prices for Indian Industrial Stocks
Jefferies Sees 33% Reliance Industries Upside Amid Refinery Disruptions
Jefferies Sees 28% Upside in Allied Blenders Stock
MSCI Rebalancing Sends Adani Stocks Into Closing-Auction Volatility
