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Jupiter Wagons Ltd
Earnings Call Analysis
Q3-2024 Analysis
Jupiter Wagons Ltd
In the third quarter of the financial year 2024, a remarkable year-on-year revenue growth of 39.4% was reported, with earnings standing at INR 90,081 lakhs. The company's performance was further underscored by an outstanding increase in Profit after Tax (PAT) of 170.2% compared to the same quarter last year. EBITDA for the quarter also marked a significant increase of 54.7%, positioning the company as an industry leader in terms of EBITDA margins, which improved by 140 basis points to 13.9%.
The company has seen a consistent increase in wagon volumes, averaging nearly 850 wagons a month. To further support this demand, the company is enhancing its foundry capacity to 5,000 metric tons, which will enable an increase in wagon production to approximately 1,000 units per month. Moreover, newly won orders from the Government of India and private customers, including a significant INR 2,200 crores order from Indian Railways, bolster the order backlog to INR 7,076 crores and are a testament to the company's market strength and innovation in wagon manufacturing.
The company anticipates sustained growth in the demand for wagons and associated products, supported by the government's heightened investment and emphasis on infrastructure enhancements. Specifically, the establishment of new economic rail corridors and the conversion of 40,000 rail bogies into Vande Bharat class aim to increase freight movement efficiency, reduce logistics costs, and improve passenger safety and comfort. These initiatives are expected to lead to further investment in the rail sector and scale up demand for the company's products.
There have been no delays reported in the company's electric vehicle rollout plan, with the commercial launch scheduled for the last quarter of FY '24. Post-launch, the company aims to provide volume projections, and FY '25 is expected to bring in substantial new revenues from the EV business, although specific revenue numbers have not been disclosed yet.
The revenue in FY '25 for the brake business is projected to be between INR 400 crores to INR 500 crores with an anticipated growth that could lead the business to reach around INR 1,000 crores over the next three years. The company's planned capital expenditure (CapEx) of over INR 1,000 crores in the next 2 to 3 years would increase wagon production further. Simultaneously, Indian Railways forecasts require between 20,000 to 30,000 additional wagons in the upcoming year, presenting a clear opportunity for the company to capitalize on its growing capacity.
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Thank you, and good evening, ladies and gentlemen. Thanks for joining us today in the 9 months and Q3 earnings FY '24 earnings call of Jupiter Wagons Limited. On behalf of Systematix, I would like to thank the management for giving us the opportunity to host this earnings call.
Today, we have with us Mr. Vivek Lohia, Managing Director; and Mr. Sanjiv Keshri, Chief Financial Officer.
I'll now hand over the call to the management for their opening remarks. And after that, we can open up for the Q&A. Thanks, and over to you, Vivek sir.
Yes. Thank you, Sudip for the introduction. Good evening, everyone, and thank you for joining us on this call to discuss the earnings for the third quarter and 9 months of FY '24. We are pleased to announce that we have sustained robust momentum in our performance with stellar growth in revenue, EBITDA and profit after tax for the quarter and the 9 months ending December 31, 2023. This performance validates the progress in execution of our strategic objectives as we continue to scale our diverse business lines encompassing mobility solutions.
In Q3 FY '24, we reported total income of INR 90,081 lakhs, up 39.4% year-on-year. EBITDA for the quarter stood at INR 12,480 lakhs, up 54.7% year-on-year. The EBITDA margin has improved by 140 basis points from 12.5% in Q3 FY '23 to 13.9% in Q3 FY '24. This has been driven by enhanced product mix and economies of scale.
We continue to report an industry-leading EBITDA margin. Profit after tax for the quarter stood at INR 8,340 lakhs, higher by 79.8% year-on-year. For the first 9 months, we reported total income of INR 2,54,090 lakhs, up 86.7% year-on-year. EBITDA for the period stood at INR 34,331 lakhs, up 113.4% year-on-year. The EBITDA margin has improved by 170 basis points from 11.9% in 9 months FY '23 to 13.6% in 9 months FY '24.
Profit after tax for the period stood at INR 22,858 lakhs, higher by 170.2% year-on-year. The Wagon business has sustained a strong performance, enabling us to surpass the milestone of INR 90,000 lakhs in total income this quarter, despite losing 10 days of production due to pooja and other festivities in West Bengal.
As you can see from our presentation, wagon volumes have increased further this quarter, averaging nearly 850 wagons a month. The expansion of Kolkata foundry and the establishment of a greenfield foundry at our unit in Jabalpur will result in doubling of overall foundry capacity to 5,000 metric tons. The new foundry at Jabalpur is expected to take around 18 months to set up and combined with the brownfield expansion at Kolkata, will enable us to enhance wagon production to approximately 1,000 units per month.
The addition of the Jabalpur unit is expected to result in significant cost savings, especially in freight expenses. Our strategic focus on improving backward -- on improving backward integration, reducing freight costs and implementing production efficiency measures are designed to further enhance operational efficiencies, laying the ground for an enriched margin profile.
We also witnessed increasing volumes of CV bodies and our JV company, JWL Kovis has witnessed a ramp-up of hubs to the export market. In an eventful quarter from -- it was an eventful quarter from the perspective of order wins. The wagon business won orders of over INR 2,200 crores from Government of India as well as private customers. This includes a substantial INR 1,617 crores order from Indian Railways, INR 473 crores order from Defense Ministry and INR 100 crore order from the automotive major for 4 sets of Double Decker Automobile Carrier Wagons. Aided by our global partnership, we continue to introduce pioneering technologies to the mobility sector in India. Additionally, we received an order value at INR 112 crores for the axle-mounted disc brake system in our JV company, JWL DAKO CZ India, reflecting our strength and expertise in wagon and associated component manufacturing.
With these wins, the aggregate Order Backlog now stands at INR 7,076 crores. Another meaningful development during this quarter was the successful conclusion of our second round of Qualified Institutional Placement amounting to INR 403 crores by issuing 1,28,06,595 new equity shares to qualified institutional buyers, which includes prominent investors like Tata Mutual Fund, HSBC Mutual Fund, Bandhan Equity Fund and FIIs like Societe Generale and Copthall Mauritius Investment Limited.
Our business of braking systems and brake discs are scaling as expected, with anticipation of a significant uptick in execution and performance through fiscal year 2025, instilling confidence in the brake business. In Electric Mobility, we await ARAI certification for our E-LCVs with scheduled commercial launch in the fourth quarter of this financial year.
In December 2023, ACUITE upgraded our long-term and short-term bank rating to AA-. And A1+ respectfully, indicating enhanced credit quality and reduced default risk. This positive assessment reflects improved financial standing, providing a stable outlook. The tailwinds for our business are likely to sustain with government -- likely to sustain spending on infrastructure in the vote of account presented yesterday.
Honorable Finance Minister has indicated plans to establish 3 significant corridors aimed at addressing congestion issues in existing rail lines, primarily in the eastern part of the country. These commodity-specific economic rail corridors are designed to facilitate faster freight movement, reduce turnaround time and lower logistic costs for mineral and cement corridor, and a high traffic density corridor. This will be in addition to the Eastern dedicated freight corridor, which was completed during the quarter and undertook its first commercial service on November 1.
In addition to this initiative, the Finance Minister revealed plans to convert 40,000 normal rail bogies into Vande Bharat to enhance the safety, convenience and comfort of passengers. Furthermore, key rail infrastructure projects such as Metro Rail and Namo Bharat will see expansion into more cities, contributing to the overall development of country's rail network.
We anticipate a sustained growth momentum in the demand for wagon, passenger coaches and metro coaches. This continued trust by the government, supported by greater investments and participation by private sector is leading to accelerated investment into the rail sector and rapid scale up of demand for wagons and accessories. We are well poised to capitalize on this opportunity, and our optimism is grounded in our impactful partnership, cutting-edge technology, strategic global expansion and a solid order book.
We can now pick up your queries. Thank you.
[Operator Instructions] The first question is from the line of CA Garvit Goyal from Invest Analytics.
Am I audible?
Yes.
Congrats for a good set of numbers. My first question is on the commercial EV side. So whether the testing has happened for the same? And I think you mentioned some delays has happened on this test. So what is the reason for the delay, that is one. And secondly, are we still intact on selling 5,000 to 6,000 vehicles in FY '25 with an approximate revenue of INR 300 crores to INR 400 crores?
Yes. So I -- there is no delay in our rollout plan. We have always mentioned that it will be in the last quarter of this financial year, and it is as per our target. The vehicle is currently under final certification by ARAI, and we are expecting the certification very shortly. So in terms of the rollout, there is no delays at all. The volumes, I don't think we have given any forward-looking projections on volumes. So I think just after post rollout only, we will be able to give any indicative volume. But right now, we have not given any volume projections.
So do we expect any kind of revenues from EVs in FY '25 or it will not be there?
No, definitely, if we are launching the vehicle by end of FY '24, definitely, FY '25 will see good set of revenues coming in from the EV business. But however, we have not given any kind of indication on the revenue numbers.
So will it be profitable in the initial year?
I think it's too forward-looking question. I think like once the rollout happens and then we will take it from there.
Understood, sir. And coming to your brake system part. So we are doing it via JV called DAKO and subsidiary Stone India. So can you share the ballpark order book that the Stone India is having right now? Or what are the developments happening in their own? And what is the outlook for FY '25 in Brake System segment?
So again, FY '25 outlook is very strong. As I had mentioned in my last call, we were expecting sizable order books for the LHB brake systems. We already have gotten order book of about INR 115 crores from Indian Railways, and we are going to be starting the execution in the coming quarter. Again, as I have projected, the brake business in FY '25, we should see revenues of anything between INR 400 crores to INR 500 crores.
That is from the Stone India and the JV, I think, it will contribute to your bottom line, right?
No, I'm talking about the brake business. All put together, would -- we are looking at a revenue of INR 400 crores to INR 500 crores in FY '24. And as we have mentioned that over the next 3 years, we expect the business to be about INR 1,000 crore business.
Understood, sir. And one last question on the order book. So we are having INR 7,000 crores kind of orders. So can you give a breakup in terms of what is -- what portion is...
Mr. Goyal, may we please request you return to the question queue for any follow-up...
Just last question. Actually it is almost completed. So we are having order book INR 7,000 crores. So I just need the breakup in terms of wagons, commercial bodies and CMS.
Garvit, we would like that you send the e-mail to us, then we will provide that. Right now, we are not carrying the breakup of the order book.
The next question is from the line of Mohit Kumar from ICICI Securities.
Congratulations on a very good set of numbers. So my first question is on the recent tender, which Indian Railways have floated and we have won.
Hello?
I really apologize for that. The current questioner seems to have dropped from the queue. The next question is from the line of Mr. Bala Subramanian.
Sir, we have raised the QIP of INR 403 crores, like how much we have utilized until now? And what are the plans for that? And under the CapEx side, like what are the -- how much we have spent in this quarter? And how much we are focusing in next 2 to 3 years? And we are doing CapEx, like specifically for this Jabalpur plant on the foundry side? And then how much, like cost benefits we can expect in the next 2 to 3 years?
Yes. Bala, this is Sanjiv. We have raised under the QIP around INR 403 crores, and the bifurcation already given in the PD. On the utilization side, around INR 90 crores has been utilized, against this QIP amount. On the CapEx side, the CapEx is going on. But on the payment side, it has not been done to the parties because the work is under the progress. So in next quarter, we will give you the exact number of what the -- against the CapEx we have done. However, as per the regulation, the utilization certificate will get uploaded within 2 or 3 days. So you will get the details from there itself.
And in terms of our CapEx plan, we have been -- we have already mentioned that in the next 2 to 3 years, we plan to do over INR 1,000 crores of CapEx, and that will -- as mentioned, that will result in additional capacity of wagon. So right now, we are doing approximately 800 wagons a month. And our target is that with the additional CapEx, we will go up to about 1,000 wagons. And definitely, on the Brake System side also, we are expanding the brake business, so we'll be doing additional CapEx there.
Okay, sir. Sir, on that CMS side, like earlier, the volumes have been restricted because of the foundry side? Like how we can expect on the improvement on CMS side because if you are doing CapEx on foundry side also?
Yes. So as we have mentioned in our call, we have already undertaken a brownfield expansion on the existing foundry, which we expect to be completed in the next 3 to 4 months. I think post that expansion, definitely, you will see volumes of the CMS crossing -- improving significantly. Already the volumes are better, but definitely, still we are constrained on the foundry capacity. But I think in the -- on FY '25, I think by quarter 2 FY '25, you will see a significant jump in those numbers.
Okay, sir. Sir, like what will be the railway and private mix in this quarter, on the wagons side?
So it is about -- right now, order book is about 60-40. 40% is Indian Railways and 60% is the private order book.
The next question is from the line of Mohit Kumar from ICICI Securities.
Yes. Congratulations on a very good set of numbers, sir. My first question is, in the recent tender, which was floated by Indian Railways and where we have got around 4,000 wagons. So my question is, why the recent tender was undersubscribed? And any comment on the competitive intensity in the tender?
So honestly, we cannot speak for our competitors. So we had bid for, in the tender, given the capacity which we had available, since the supply had to be done in a very short period. So we had bid for 4,000 wagons and we got that order book from Indian Railways.
And any comment on this pricing?
So the pricing is as per our expectations, and we will continue to maintain the margins, what we have projected on the pricing.
Understood, sir. My second question is, sir, how do you think about the opportunities from Indian Railways, especially for the wagons for the next 6 to 12 months. And we -- I do understand that there is one tender, which is floated by the Indian Railways for modern wagons, just supposed to be -- supposed to be conducted in the month of March. Do we have the capacity to produce the modern wagons? And are we participating in tender, sir.
Definitely, we have the capacity to produce the modern wagons and we are a serious bidder in that tender. We -- as you are aware that we already -- Tatravagonka, who is the leading producer of freight cars in Europe is already our partner, and a promoter in Jupiter. So they have all the requisite technologies available. So definitely, we are looking forward to that. And besides that, we see quite robust demand from Indian Railways. There is -- there are 2 tenders right now in the pipeline for about 13,000-odd wagons, which are ongoing. Besides that, our expectation is that anything Indian Railways would require -- as per their projections, would require anything between 20,000 to 30,000 additional wagons in the coming 1 year.
Understood. Sir. My last question on the private wagon inquiry side, sir. How is the inquiry from wagon compared to, let's say, a few years -- few quarters? I'm asking the question because the election is coming up, is it slowing down some kind of inquiry from the private wagons side?
No, we see a very robust demand from the private sector itself. And I think quarter-on-quarter, we are seeing the demand to become more robust and our private order books have not slowed down. So I don't think elections will have any impact on this because these are all long-term capital -- everybody has long-term CapEx plans and elections will not have any impact.
And as our Honorable Finance Minister has said -- has already said that we are seeing private capital coming back in a big way. So we don't foresee any letup on the demand.
Is it right to say that GPWIS scheme contributes maximum to this private wagon order, as of now?
I -- again, I would not say it contributes maximum, but yes, there was definitely a sizable inflow from that particular scheme. But besides that -- also, there is a sizable demand from non-GPWIS wagons.
[Operator Instructions] The next question is from the line of Nishant Parikh, who's an individual investor.
Sir, congratulations on great set of numbers. My question is regarding the 10,000 global tender of wagons that you're going to be bidding for. So you had said in the annual report that these wagons will be more specialized in advanced nature and their average price will be higher. So I just wanted to understand what is the average utilization you're looking at? And do we have any prototype of such wagons ready? That's my first question.
So yes, as I have said that these are completely different designs from what right now is plying on the Indian Railways. And definitely, they will have -- in terms of loading capacity, they will have better loading capacity. The bogies also are going to be much more modern on these wagons. So as I mentioned that we are looking at -- being new designs and qualitative products, so we are expecting good margins out of that order book. And again, to give any kind of margin -- any further details right now on that tender would be very difficult.
Correct, sir. And one more question, sir, this -- one more thing, this order, the tender of 10,000 wagons would be given to only 1 player or it will be distributed among multiple players, like how it happens?
No, it will be given to 1 player, and it has to be executed over 5 years.
Okay. Great, great. All the best, sir, for this upcoming tender.
The next question is from the line of [ Atif Shah ] who's Individual Investor.
Congratulations on a great set of numbers. So I just have 2 questions. One is on the expansion of our wagon capacity to 1,000 wagons a month. So, I'm confused, are we going to reach 1,000 wagons a month by the end of this financial year? Or is it only possible when the Jabalpur foundry comes online?
No, we are going to -- our target is to achieve before the Jabalpur foundry comes online. Definitely, we are looking to do that. Once the Jabalpur foundry comes into line, then it will -- it can be more entrenched and then we can have much better backward integration on it.
Okay. And my second question was regarding wheel set manufacturing. Like you had mentioned earlier, we are seriously looking into it. So do we have any time lines, CapEx plans or anything in place? Or is it still under strategizing phase?
No, it is still under strategizing. And as and when we finalize on our plans, we will announce the same.
The next question is from the line of Vikas Vijayvargiya from [indiscerinble].
Hello?
Yes, you're audible.
Yes, Yes, please.
Yes. In the Q2 con call, is our Kolkata foundry capacity has increased from 2,500 to 3,000 metric tons and simultaneously our wagon capacity, 700 to 800 wagons, correct?
No. We are already doing 800 wagons. The idea is that we want to further enhance capacity. And as I mentioned that before end of this year, we are targeting to reach about 1,000 wagons.
On the same foundry capacity of 3,000 metric tons in Kolkata?
Yes.
And in the foundry in Jabalpur, is it 2,000 metric tons, we has come in, might be, 15 to 18 months, correct?
Yes.
And regarding this one, the EV mobility, you last time mentioned about this one is the testing schedule is November '23, whether it is done, sir?
No, we had not mentioned November '23. We had always mentioned that the vehicle will be launched by the fourth quarter.
No, no. Yes. Correct. Commercially launching is Q4 FY '24, but the testing side is November '23?
Yes. So that is as per schedule. As we have mentioned that it is -- we are awaiting final certifications from ARAI.
But testing -- means certification is not completed?
Yes. Yes.
Okay. Testing is done at our end?
Yes.
And we expected commercial launch in next -- in this quarter itself?
Yes, by end of this financial year.
If certification and everything goes well?
Yes.
The next question is from the line of [indiscernible] from Invest Analytics Advisory LLP.
Hello? Am I audible?
Yes, yes, you are.
Sir, we are reaching a capacity of 1,000 wagons per month by FY '24, that will take care for our order book in FY '25. So what after FY '26? Are there any plan -- do we have any plans related to further expansion of the wagons capacity?
Again, very difficult for us to comment right now. But definitely, we are -- as we have mentioned, and we are enhancing our foundry capacity substantially. So definitely, we are creating the pipeline for the same. So beyond that 1,000 number, it will depend on the order flows, which come in, in the next 2 to 3 quarters.
Understood. And sir, in our JV Kovis, we did something called Hubs. Can you put some color on it? What is the product [indiscernible], and how much JWL Kovis did in first 9 months FY '24 in revenue terms and PAT terms?
Again, I don't have the numbers readily available with me. So Hubs is part of the brake discs which we are exporting. And I think in the coming quarters, we have now got substantial export order books and the export business in the JV will see a substantial increase and further new set of castings -- we will see much more bigger and much more complex castings being exported out of it.
So when you mentioned we are having some export orders of Hubs. So are these figures included in INR 7,000 crores order book? Or it is a separate figure?
No. That's a separate -- it is, no -- it is included in the INR 7,000 crores order book.
Okay, sir. Okay. And the brake system order of INR 115 crores, that is also included in INR 7,000 crores order the book? Hello?
Yes, it is included.
[Operator Instructions] The next question is from the line of Pankaj from Affluent Assets.
Sir, in answer to one of the participants earlier, you mentioned that you would be increasing our capacity from 100 wagons to 1,000 wagons. So did I hear it right?
No, from 800 wagons, which we are doing currently, I said 2,000 wagons.
Okay, okay, okay. So does it mean that our revenue potential increases by around 25% from here?
Yes, definitely, as the wagon production goes up, definitely it will have an impact on the revenue.
Okay. Secondly, sir, just wanted to understand, we are -- how sustainable are our margins given that we are drawing around double -- mid-teens of margins, whereas our competitors are struggling to reach even double-digit margins. So where do we get this differential margins? And yes, that's from my side.
I think that is a mix. See, as we mentioned earlier. One is that we are very focused on our backward integration, and efficiencies of operation, I think that's where our focus is, and that's where we stand out from our competitors. And secondly, if you look at our order books on a continuous basis, the private order books are much bigger, and we do more specialized wagons, which are -- which have higher margin profiles. I think it's -- and then obviously, now we are adding much more higher technology products such as brake systems which again carry better margins in our profile. I think it's a mix of all these aspects.
Okay. And lastly, if I could squeeze in, what are other than the CapEx...
Pankaj sir, could you please return to the question queue for the follow-up question? Next question is from the line of Parvez Qazi from Nuvama Group.
Congratulations for a great set of numbers. So 2 questions from my side. You said that on the wagons side, there are 2 tenders in pipeline from Indian Railways for 13,000 wagons. Did I get that number correct?
Yes, Parvez, you got it absolutely right.
So one tender is for the new age wagons of 10,000 wagons.
It is besides that. This is besides the -- if you include that, it is about 23,000 wagons.
Okay. So the second tender of 13,000 wagons. I mean, is it similar to the 11,000-odd wagons which railways awarded recently?
It's a completely new design of wagons. It has got -- the designs are separate. So the tender for 12,000 wagons of that particular design, and there are 2 small tenders of 500 each.
And then there's obviously the new age wagon tender of 10,000?
That is in addition to these.
Great. The second question is, just wanted to get some update about Stone India, how are things progressing there?
So the progress of Stone India is as per our expectations. And as we have mentioned that by beginning of FY '25, we will be commencing commercial operations in that company.
Sure. And last question for Sanjiv ji. Sir, would it be possible to get the gross debt and the cash numbers at the end of Q3?
Gross debt and cash numbers at end of Q3.
The gross debt, if you see that -- we are net debt free because -- around INR 300 crores is the short-term borrowings we have right now in books, against that around INR 500 crores is lying on the liquid cash we have. And this is the number. So we are net debt free.
The next question is from the line of [indiscernible] Mittal from Invest Research.
Hello? Am I audible?
Yes, you are.
Sir, I will ask only one question, sir, but I would request you to spend some more time on explaining this question. See, we are not as investors -- long-term investors, we are not seeing you as a wagon manufacturer, right? As you rightly pointed out some time back that you are a mobility player, correct? You are transforming yourselves from being a wagon manufacturer to a mobility player, right? So I'm coming from the point of derisking your revenue model from depending on railway -- railways' orders or orders from railways, to being a consistent company churning out revenue and growth on a year-over-year basis. So what is your strategy on that, sir? We can see that you're entering defense, you are getting into LCV on EV size, right? So if you can spend some time explaining how we can see you as a mobility player rather than the wagon manufacturer?
I think you have highlighted most of the products. So as -- see, right now, primarily, definitely wagon is one of our key focus areas, and we see a lot of opportunity in this segment in the next 3 to 4 years. We see a lot of robust demand and the segment growing year-on-year. However, on the other side, we are already into manufacturing of commercial vehicles, into manufacturing of containers. And our idea is to take that business forward. So we are launching our first line of E-LCVs. And the idea is that in the coming 1 or 2 years, we will have at least 3 to 4 vehicles from 1-ton payload all the way up to 5-ton payload. So that will give us a substantial presence in that segment.
And the E-LCV segment is growing at a very rapid pace, even if you have Honorable Finance Minister, in our budget, it is one of the priority sectors, again for the Government of India, and they are very focused on developing this segment.
Besides that, again, as I mentioned earlier that right now, our focus is to add products which are -- which have a high level of technology and the brake business is one of the ways through which we are introducing these products. They are not only meant for the Indian market, but they will be also exported to the global market. And we have already started that process, and you will see over the next year or 2 years that a substantial part of the revenue of the company will be coming out of exports.
We already have an MoU with rights where we are already working on a lot of export tenders, and we expect results very shortly. So the idea is that, obviously, it will take some time for you to see the results. But in the next -- in the coming year or 2 years, we expect that more than 50% of our revenues come out of non-wagon business. That is how we are strategizing ourselves as a company.
The next question is from the line of Devesh Kasliwal from Antique Stock Broking.
Am I audible?
Yes. Yes, you are.
Sir, in the last quarter that you had mentioned that you had -- you were L1 in an export wagon order of around 600 wagons, if I'm not wrong. And you were expecting it in this quarter. Just a follow-up on that. Like have you got that order and the opportunity size going forward in the export business, in terms of number of wagons every year percentage of the order book?
No, we have not got that order yet, but it is -- what we can understand is that it is in the final stages of deliberation. So we expect it very shortly. Again, right now, we have participated in tenders for about close to 3,000-odd wagon order books. So these numbers will -- you will see some export order books flowing soon.
Okay. And the second question was on the container business, like it has seen a degrowth in this 9-month period. And if I'm not wrong, we are planning to focus on the other businesses. Even then, how do we actually look at this business going forward for the next 2 years? If any views.
As I mentioned on my other -- our focus is now on specialized and high-end containers. So that's why you see the revenues coming down, but the margins have improved. And now it took us some time to get the prototypes approved and get the infrastructure ready for these containers, and these are containers which are being produced in India for the first time.
So in the next -- over the next financial year, you will see substantial growth now in this segment. And now we have quite strong and robust order books, so you will see growth as well as good margins.
The next question is from the line of Indrajit Chakraborty from [indiscernible] Trading Corporation.
[Foreign Language] I just have a small clarification question, which is, you said that you are having this 10,000 global wagon tender. So when would we expect that thing to be finalized? Can you please tell that -- that's all.
When it will be finalized, honestly, you have to go back to Indian Railways for that, but the tender is supposed to open in -- sometime in February. But when it's going to be finalized...
The global tender which you had?
Yes, the global tender only is supposed to open in February -- sometime in February, but finalization is honestly not in our hand, that is something which you have to ask Indian Railways.
Okay, Okay. No, no, I just was -- Okay. Okay. I thought it was already getting finalized or something like that.
Tender is supposed to open in February.
The next question is from the line of Mehul Mehta from Nuvama BCG.
My question is, in earlier response to a question, you answered that like, in terms of non-wagons business, we should be looking at like about 50% of business from non-wagon business going ahead. So is there any planning on that part to enter into passenger trains as well?
So definitely, that is one segment which we are looking at, and we are in discussions with a couple of global players. And as and when something materializes, we will be announcing that.
And will it be in terms of entire the way a JV with any player to enter passenger trains or in terms of passenger train components or it would be on both sides we can look at?
So components, we are already in the component business as you have a brake system we're already supplying. We are doing certain other components such as couplers, the brake disc. But -- so we are looking at supplying complete train sets.
Right. Okay. And one more question, last is that in terms of working capital cycle at December end, could you share like debtors, creditors and inventory number?
Mr. Mehul, if you could please send the e-mail, we will share that because this is not in the results. So I'm not carrying that numbers with me.
The next question is from the line of Aakash from Dalal & Broacha Stock Broking.
Hello? My question is more on our -- focusing on our brake disc and brake system business. So initially, we had guided that both businesses combined will be generating a top line of around INR 100-odd crores this year and will scale up to as good as INR 250-odd crores next year. So how well have we done on that front? And if you could share some color on how these businesses will be shaping up in the coming next 2 years, 1, 2 years?
So what I mentioned was that on the brake disc, we expect to do a revenue of INR 100-odd crores this year, and we are in line for the same. On the brake system business, I clearly mentioned that we will be getting orders in this financial year and which we'll be executing over the next financial year. And as you can see that we have already won an order book of INR 100 crores. So as I have mentioned earlier in my call, in next financial year, overall, on the brake business, we are looking at revenues of anything between INR 400 crores to INR 500-odd crores, of which exports also will form a sizable part.
Got it, sir. And the second question was relating to the new impetus that the yesterday's budget gave for replacing all the normal bogies with Vande Bharat bogies. So will we benefit out of that in some ways?
Definitely, because we are supplying a lot of critical components and brake systems and couplers and other such components. So definitely, it is something which we are going to benefit substantially from and we are looking ahead for the tenders to come out for these conversions.
Got it. So is that current order book on brake system pertaining to Vande Bharat?
No, the current order on brake system is pertaining to the LHB coaches, but in terms -- in brake disc, we already have orders for Vande Bharat. And on the brake system, we are already -- our prototype is in the process of getting ready, and we will be getting into that segment very shortly.
Got it, sir. Any guidance on how these businesses will shape up by FY '26. Last question, last question. This is just a follow-up.
As I told you, in the next 3 to 4 years, we are looking at the brake business to be about INR 1,000 crores business for us. So we are very, very bullish on this segment. And again, as the rolling stock population goes up, not only the OEM business, but the replacement business as well as the maintenance business, you will see a substantial contribution coming from all these segments.
That's great.
Ladies and gentlemen, we would take that as our last question for today. I would now like to hand the conference over to the management for closing comments.
Yes. Thank you. I appreciate everyone's participation in today's call. The ongoing momentum in infrastructure development nationwide continues to provide a strong tailwind. The business outlook remains strong with a large backlog of orders for wagons, supported by increasing traction in new areas. We anticipate further scaling up across business lines of brake disc and braking systems too. We look forward to interacting in the next quarter. Thank you.
Thank you.
Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.