Jupiter Wagons: Railway stock sees price target cuts; still a buy?

Shares of Jupiter Wagons Ltd on Tuesday fell for the second straight session, as a couple of brokerages cut their target prices on the stock after underwhelming March quarter results that trailed the anticipated growth targets.  

The railway stock fell 4.55 per cent to hit a low of Rs 393.10. With this, the scrip is down 14 per cent from its previous session's high of Rs 457.20 apiece.  

Jupiter Wagons reported a flattish net profit of Rs 103 crore for the March quarter compared with Rs 105 crore in the same quarter last year. The consolidated total income for the quarter fell to Rs 1,057 crore from Rs 1,127 crore in the corresponding quarter last year.

Given Jupiter Wagons' weak ordering activity and near-term sectoral challenges, Antique Stock Broking cut its target price to Rs 431 from Rs 468 earlier, valuing the stock on a P/E multiple of 32 times its FY27E earnings per share.

Systematix Institutional Equities has reduced its FY26 Ebitda and PAT estimates by 7.8 per cent and 8.4 per cent and 13.5 per cent and 14.9 per cent for FY27 primarily owing to the lower execution of wagons. 

"The company expects brake and wheelset business to double in FY26 from Rs 100 crore and Rs 300 crore in FY25, respectively. Also, The company highlighted that wheelset supply concern from IR impacted the volume in Q4 and in Q1FY26 TD. The management expects the supply to normalise from Jun’25 onwards," it said. 

The brokerage said Jabalpur plant is also fully operational after the couple of weeks shutdown due to labour issues and the management expects the big tender from IR to come in H2FY26. For now, Systematix Institutional Equities has cut its target price on the stock to Rs 517 from Rs 607 earlier. 

Antique Stock Broking said Jupiter Wagons is well-placed to register a revenue and earnings CAGRs of 18 per cent and 21 per cent over FY25-27E supported by strong capabilities that it has developed on multiple fronts coupled with sectoral tailwinds that it enjoys in the business segments that it operates in. 

"However, to factor in the weak wagon segment ordering activity and lower guidance of wagon volume sales, we trim our FY26/27E EPS estimates by 7 per cent/ 8 per cent," Antique said.

Arihant Capital Markets said the company faced constraints in Q4 FY25 due to wheelset shortages from Indian Railways, which also impacted the early part of FY26.  Supply normalisation is expected by mid-June 2025, it cited the company as saying.