`FINANCIAL ANALYSIS OF JUPITER WAGONS

LIMITED
Submitted in partial fulfillment of the requirements for the award of the Degree of

B.COM HONOURS of

GRAPHIC ERA HILL UNIVERSITY

By
MANAS MEHTA
ROLL NO. PV-D2024082

Department of Commerce
GRAPHIC ERA HILL UNIVERSITY

2023
DECLARATION

I affirm that the FRP report titled "Financial Analysis of

Jupitor Wagons Ltd." submitted for the completion of my
Bachelor of Commerce degree is entirely my own work.
This report has not been previously used as a basis for any
academic qualification or recognition, including degrees,
diplomas, fellowships, or similar titles.

MANAS MEHTA

BCOM 6th SEM

ACKNOWLEDGEMENT
I am grateful to acknowledge the contributions of several
individuals who have played a crucial role in bringing this
report to fruition. I would like to express my sincere
gratitude to those who have supported me throughout the
process and helped me transform my ideas into a tangible
document. Special thanks go to Dr. Amar Singh, Faculty
Department of Commerce at Graphic Era Hill University,
Dehradun, for his unwavering support, cooperation, and
invaluable guidance during my project. Without his
assistance and provision of essential information,
completing this manuscript would not have been possible. I
would also like to extend my appreciation to the librarian
and staff members of Graphic Era Hill University,
Dehradun, for their assistance in obtaining the necessary
books and resources in my field of study. Additionally, I am
grateful to my friends who have consistently been there to
lend a helping hand, even during unconventional hours.
 CERTIFICATE BY GUIDE

I am pleased to confirm that MANAS MEHTA is a student enrolled in the

Bachelor of Commerce (Honours) program at Graphic Era University.

His/Her University Roll No. is PV-D2024082. I have supervised his/her

Dissertation work titled "Financial Analysis of Jupiter Wagons."

I hereby verify that this work is the original and independent effort of

MANAS MEHTA, and it has not been plagiarized from any other source.

Furthermore, this Dissertation report has not been submitted to any other

university in pursuit of a degree.

This dissertation report satisfies the requirements of the curriculum

prescribed by Graphic Era P University, Dehradun, for the aforementioned

course. I highly recommend this project work for evaluation and

consideration towards the award of a degree to the student.

Signature :

Name of the Guide: Dr. Amar Singh

 ABSTRACT

The preparation and maintenance of financial statements play a key role in each and every
company. The financial statements are prepared from time to time that helps in the
comparison between time periods of the same company and that with different companies as
well. Due to this comparison of statements various decisions can be taken and assumptions
can be made. In this research study the main focus is on the comparison of the last five years
balance sheets and profit and loss accounts. This is done with the use of ratios of current,
liquidity, leverage and trend in nature. The change in the statements was the main focus in
this project along with an assumption of what may be the reason for the change in statements.
The research project carried out also focuses on giving suggestions based on the findings with
the help of the ratios used. The research finally concludes that the company has to put great
focus on moderate levels of returns on capital employed and also shift the focus to weak solo
financial profile and work to improve it.
 TABLE OF CONTENTS

Chapter Particulars Page No.

No.

1. Introduction -

1.1 Introduction 1-2

1.2 Introduction to Finance 3
1.3 Techniques of Financial Analysis 4-5

1.4 Brief History of Indian Financial System 5-8

2. Review of Literature & Design of the Study -

2.1 Introduction 9

2.2 Review of Literature 9-12

2.3 Statement of Problem 13

2.4 Objectives of the Study 13

2.5 Hypothesis of the Study 13

2.6 Research methodology 13-14

2.7 Scope of the study 14

2.8 Limitations of the study 14

3. Organisational Study -

3.1 The Company Profile 15

3.2 Major Events 16-21

3.3 Product Portfolio 22-23

3.4 Vision 24

3.5 Mission 24

3.6 Values 24

3.7 SWOT Analysis 25

3.8 Major Competitors 26

3.9 Other Performance Indicators 26

4. Results, Analysis and Discussions -

4.1 Financial Analysis of Jupiter Wagons Co Ltd. 27-37

4.2 Stock Market Performance 38

4.3 Jupiter Wagons Peer Comparison 39-59

5. Summary of Findings, Conclusions and Suggestions -

5.1 About the Company 60
5.2 Quick Fundamental Look 61
5.3 Credit Strengths 61
5.4 Credit Challenges 61-62
5.5 Rationale 62-63
5.6 Liquidity Position 64
5.7 Findings 64-65
5.8 Suggestions 65-66
5.9 Conclusions 66
5.10 References 67
5.11 Annexures 68-70
 List of Figures

Figure Particulars Page No.

4.1.1 Sales Growth of Jupiter Wagons Co Ltd.

4.1.2 Profit Growth of Jupiter Wagons Co Ltd. 35

4.1.3 RoE % of Jupiter Wagons Co Ltd. 36

4.1.4 RoCE % of Jupiter Wagons Co Ltd. 37

4.1.5 Share Holding Pattern of Jupiter Wagons Co Ltd. 37
4.3.1 Sales Growth of Hindustan Aeronautics Ltd. 41
4.3.2 Profit Growth of Hindustan Aeronautics Ltd. 41
4.3.3 RoE % of Hindustan Aeronautics Ltd. 42
4.3.4 RoCE % of Hindustan Aeronautics Ltd. 42
4.3.5 Share Holding Pattern of Hindustan Aeronautics Ltd. 43
4.3.6 Sales Growth of Cummins 45
4.3.7 Profit Growth of Cummins 45
4.3.8 RoE % of Cummins 46
4.3.9 RoCE % of Cummins 46
4.3.10 Share Holding Pattern of Cummins 47
4.3.11 Sales Growth of Thermax 49
4.3.12 Profit Growth of Thermax 49
4.3.13 RoE % of Thermax 50
4.3.14 RoCE % of Thermax 50
4.3.15 Share Holding Pattern of Thermax 51
4.3.16 Sales Growth of Grindwell Norton Ltd. 53
4.3.17 Profit Growth of Grindwell Norton Ltd. 53
4.3.18 RoE % of Grindwell Norton Ltd. 54
4.3.19 RoCE % of Grindwell Norton Ltd. 54
4.3.20 Share Holding Pattern of Grindwell Norton Ltd. 55
4.3.21 Sales Growth of Bharat Dynamics 57
4.3.22 Profit Growth of Bharat Dynamics 57
4.3.23 RoE % of Bharat Dynamics 58
4.3.24 RoCE % of Bharat Dynamics 58
4.3.25 Share Holding Pattern of Bharat Dynamics 59

Chapter – 1
 Introduction

1.1 INTRODUCTION

How Does Financial Analysis Work?

The practice of assessing firms, projects, budgets, and other financial-related transactions to
ascertain their efficacy and suitability is known as financial analysis. Financial analysis is
frequently used to determine whether a company is stable, financially sound, liquid, or
profitable enough to justify a financial investment.

KEY TAKEAWAYS:

•If done in-house, financial analysis can assist fund managers in making judgements about
the future of their company or in looking back at historical trends to determine prior
successes.

•Financial research, when done externally, can assist investors in selecting the finest
investment possibilities.

•The two primary categories of financial analysis are fundamental analysis and technical
analysis.

•Fundamental analysis analyses ratios and financial statement information to calculate a

security's intrinsic value.

•Technical analysis concentrates on trends in value over time since it makes the assumption
that a security's worth is already decided by its price.
What is the reason behind your company's financial analysis?

A financial analysis will not only provide you a better understanding of your company's
financial situation and enable you to assess its creditworthiness, profitability, and capacity for
wealth creation, but it will also give you a more detailed understanding of how well it runs
internally. Consequently, this study is a helpful health checkup that will enable you to
comprehend the needs of your business better. It can give you a more thorough picture of
your company's tax situation and assist you in managing it more effectively, which could
ultimately result in higher profits and more financial security.

Additionally, this kind of analysis is quite helpful when you need to request finances or
submit a loan application. To assess your company's capacity to repay the loan(s) you will
get, the majority of financial institutions want a balance sheet and financial analysis.

The position of your company in respect to the industry is identified by a financial analysis,
allowing you to monitor the competition. It also takes into account any hazards that can have
an impact on the market. This might help you develop a strategic business plan and reduce
your exposure to these risks.
1.2 INTRODUCTION TO FINANCE

Investment, borrowing, lending, budgeting, saving, and forecasting are all part of the
discipline of finance, which is referred to as the management of money.

Giving examples of the tasks that finance entails is the simplest approach to define it. A vast
variety of vocations and career pathways exist that carry out a variety of financial tasks. A list
of the most typical instances is provided below:

•Personally investing money in securities such as stocks, bonds, or GICs (GICs).

•A public corporation borrowing money by issuing bonds to institutional investors.

•Giving people a mortgage to use as collateral for a loan so they can use it to purchase a
home.

•Developing a corporation's financial model and budget using Excel spreadsheets.

•Saving money for personal use in an account that pays a high interest rate.

•Developing a forecast for government spending and revenue collection.

1.3 Techniques of financial analysis

 The methods of financial statement analysis that an investor can use to evaluate whether or
not to invest in a company are listed below:

1) Trend analysis

In order to predict where stock values are headed, trend analysis typically entails tracing their
trajectory. Trends can be upward or negative and signify a bull market or a bear market. This
is one of the unique tools of financial analysis since it can be used to forecast how various
external circumstances would affect a stock.

2) Vertical analysis second

In the vertical analysis, every line item on a financial statement is expressed as a percentage
of a specific header. For instance, a company's net income, various expenses, input costs, etc.
could be expressed as a percentage of sales. This tool is typically used to obtain
understanding of the relationships between various production parameters and performance
measures.

3) Horizontal analysis

This is among the most often used approaches to financial statement analysis. You may have
observed that news anchors on television frequently mention that XYZ company's net income
has grown by a specific percentage either annually or sequentially. The many indicators in a
financial statement, such as income, sales, interest margin (for lenders), etc., have risen or
faltered through time. Horizontal analysis enables us to understand this development.

4) Analysis of cash flows

 Analysing cash flow entails monitoring a company's costs and profits over a given time
frame. It makes it easier to determine the company's working capital needs and, in turn, how
quickly it will expand in the market and how much debt it will need.

5) Ratio analysis

Ratio analysis is one of the few methods of financial research that can assist an investor in
comparing a firm to its peers, or businesses of a similar size and industry. The earnings to
price ratio, the net income to sales ratio, and the return on assets ratio are a few examples.
This approach is helpful for identifying the gaps in private companies.

1.4 A brief history of Indian Financial System

"A well-developed and effective financial system is like the human body's circulatory system
for any economy." Similar to how blood circulation is essential for a body's growth and
survival, it is essential for the formation of capital, the creation of wealth, and its distribution
in any economy. Achievements are due to a personality with a sound, goal-oriented mind and
body.

The "Intermediaries" in the financial system work in the "Financial Markets" with the aid of
the "Instruments." "Regulators" control the intermediaries' commercial operations (Please see
to graphical representation). The Indian subcontinent has always had some basic kind of a
working financial system because it is an ancient civilization. A historical 32% contribution
to the world GDP was made possible by this early banking system. But as time passed, the
fractured Indian subcontinent fell behind the rest of the world in terms of socioeconomic
growth.

The years leading up to independence, particularly the years 1857 to 1947, were not favorable
for the contemporary "Indian Financial System's" rebirth. The financial system at the time
was very informal and had simple financial market mechanisms. Financial intermediaries
were beginning to take shape, but there was little capital flow for long-term finance.

Political leadership adopted a socialist philosophy and a planned economic growth strategy
after "Independence." The allocation of financial resources under governmental oversight was
necessary for this strategy. The Reserve Bank of India (founded in 1935) was the first
financial institution to become publicly owned as a result of this requirement for oversight.
Nationalization: 1949 The "Imperial Bank" changed its name to the "State Bank of India" in
1956. The "Life Insurance Company" (LIC) of India was established in the same year the
political leadership nationalized 245 insurance companies and provident societies.
Government nationalized 14 banks in 1969; the same thing happened again in 1980 with the
nationalization of 6 additional banks. In this period, other institutions under government
supervision were also established, such as "Unit Trust of India" (1964), which gave rise to the
nation's Mutual Fund business. The establishment of "General Insurance Corporation" (GIC)
in 1972 strengthened the government's authority over the insurance sector.

With the development of numerous financial organizations, such as Development Finance

Institutions (DFIs) like the "Industrial Finance Corporation of India" (IFCI) in 1948 and State
Finance Corporations at the state level, this state-controlled financial system came to
dominate the economy. The creation of "Industrial Credit and Investment Corporation Ltd."
(ICICI) as a project of "Government of India" (GOI) and the "World Bank" was one of the
most important developments in the development finance sector. Even though it happened
slowly, the Indian Financial Sector underwent tremendous progress throughout this time in
terms of the regulatory frameworks, operational policy, and legal structures that strengthened
the financial system even more. The "Capital Issue (Control) Act 1947," "Companies Act
1956," "Security Contract Act 1956," "Monopoly Restriction and Trade Practice Act 1970,"
and "Foreign Exchange Regulation Act 1973" were some significant legal structural
developments. As a result, the financial system adopted diverse, unique structures to support
the planned economy strategy.

This state-owned Indian Financial System prior to 1991 had an inefficient setup for effective
capital sourcing, management, and distribution. It was a DFI-dominated system for industrial
finance, with state/sponsor dependence as opposed to "institutionalization of public saving"
as the source of funds. The scope of the erroneous intermediary group's financing was fairly
constrained. It resulted in a number of problems, including the uneven capital structure of
investment enterprises and the political-industrial nexus (high debt to equity, lesser promoter
risk as capital at risk is low, probability of default was high). This defective system prevented
the engagement of the general public and SMEs. The system had certain benefits, including a
focus on processes, a decrease in dependency, and the emergence of a more modern sector
under state control.

After the BOP crisis of 1991 and the ensuing economic liberalization, the Indian Financial
System underwent a wave of change. The political elite in India after 1991 adopted the
principles of a liberal market economy. State authority over the financial sector began to
decline with the adoption of the market-led approach. As opposed to being the owner of
financial intermediaries and markets, the state began to assume a complex role as a facilitator,
regulator, and reformer. A substantial restructuring of the financial system was sparked by
this change. Three new regulatory bodies were created by political leadership: SEBI (founded
in 1992; granted legal standing in 1999), IRDAI (founded in 1999), and PFRDA (Est. 2003).
The financial system and markets were opened up to private participants by the government.
Some already-existing DFIs, notably IFCI and IDBI, attracted private investors as a result.
DFI power over the financial sector decreased as a result of the fall in state control. With the
creation of ICICI Bank Ltd., a big change occurred (Erstwhile ICICI Ltd was merged with the
subsidiary). The government also took action to transform Industrial Investment Bank of
India (IIBI, founded in 1971) into a commercial bank and shut it down in 2006.With the
arrival of private (there are currently 22) and foreign players, the banking industry underwent
major change (currently 46). Additionally, RBI was crucial in facilitating the NBFC industry
and the Fintech space. The financial system has become more diverse as a result, and it has
been able to meet the markets' many specific needs. As a regulator, the RBI played a
significant part in the restructuring of the financial system. One important element in this
shift was RBI's autonomy.

The level of industrial participation in the capital market is starting to rise. A number of
significant organizations were established, including National Stock Exchange Ltd. (NSE),
Stock Holding Corporation of India, and ICICI Securities and Finance Limited (Est. 1995;
launched an electronic brokerage platform in 2000). Under the authority of SEBI, the security
markets, a component of the Indian financial sector, underwent major change. In the primary
market, specialized market intermediaries for the facilitation of "new issue" began to play
important roles. The secondary market was also affected by the wave of transition.
Screenbased trading was introduced by NSE in 1992. Greater openness, inclusion, and
liquidity resulted from this disruptive entry, which altered how secondary market participants
interacted. With the passage of The Depository Act, 1996, two depositors, namely National
Securities
Depository Limited (NSDL, Est. 1996) and Central Depository Services Limited (CDSL, Est.
1999), were established. Since practically all traded shares have been dematerialized by
NSDL and CDSL, ownership is now transferred using the book-entry system. One
noteworthy occurrence was the beginning of derivative trading in India in 2001.

Insurance and mutual funds are two industries that deserve recognition, and the years
following 1991 were particularly fruitful for these fields. As more domestic and international
organizations start to join in the mutual fund industry, the industry becomes more diverse.
With the involvement of domestic and international firms, the insurance sector has developed
into a much more organized and vibrant sector under the regulatory authority of IRDA. This
industry has improved India's financial system by offering a wide range of clients a highly
diverse product portfolio.

A newer type of organizational infrastructure, such as Credit Rating Agencies, Technical

Consultancies, Custodian Service Providers, portfolio managers, and Foreign Institutional
Investors, contributed much-needed energy to the Indian Financial System in the post-1991
era. India, which is now on the rise, has a rather sophisticated financial structure.
Nevertheless, it has taken our nation a long time to get to this point. The aftereffects of the
socialist era are still something we are working to overcome. I remain confident that our
nation can attain the goal of "prosperity for all" if the Indian Financial System is strengthened
and made more effective.
 Chapter – 2

Review of Literature & Design of the Study

2.1 Introduction

The literature evaluation aids researchers in understanding the methodology employed, the
limitations of the many available estimating procedures, and database, logical interpretation,
and resolution of the disagreeable outcomes.

In addition, the analysis of empirical studies looks into potential directions for ongoing and
future study on the topic. Research can benefit from the expertise of its researchers just by
means of their published works in the event of contradicting and unexpected outcomes.
Researchers, economists, and academicians in India and elsewhere have conducted a variety
of research studies on various elements of performance rating. Performance has been
examined from a variety of angles by many scholars. It's critical to analyse these analyses in
order to create an approach that may be applied for studying the Indian automobile sector. In
light of this, the current chapter covers empirical studies pertaining to several components of
financial performance analysis.

2.2 Review of Literature

1. Rao (2003) covered the topic of "Financial Appraisal of Indian Automotive
Industry." The study's primary goal was to investigate the financial health—both
the strengths and weaknesses—of the Indian automotive industry.
Through the use of inter-company and inter-sector analysis, he has been evaluated
and his financial performance measured during the years 1981 through 1988. He
has discovered that while inventory was maintained reasonably well, the fixed
asset utilisation in several of the automotive ventures was less profitable than
anticipated. He believed that the overall profit performance of the automotive
sector was inconsistent and ineffective. He has made several suggestions for
enhancing financial performance.

2. Rao (2005) In his article, "Impact of Debt-Equity Ratio on Profitability-An

Exploratory Study of Engineering Industry," Rao explores the relationship
between debt-equity ratio and profitability in engineering firms. The research
based on Profitability has a negative correlation with the debt-to-equity ratio. For
example, a high debt-to-equity ratio would result in low profitability due to high
interest costs, whereas a low debt-to-equity ratio would result in good profitability
due to low interest costs. Profits generated by the company ultimately determine
how well it operates and what a suitable rate of return on owner's capital should
be. Profits are therefore important to maintain the company in the current
environment of fierce competition and to protect it from business rivalry.

3. Zafar S.M. Tariq and Khalid S.M.'s (2012) study explored that ratios are
determined using financial statements that are created in accordance with the
management's planned depreciation and stock valuation policies. Ratio is a
straightforward comparison of a numerator and that fails to give a complete and
accurate picture of the firm. Results are influenced and may not show additional
aspects that have an impact on a company's performance by the promoters.

4. Mistry Dharmendra S. (2012) study examined the impact of numerous

determinants on the profitability of the chosen organizations was understood by
 the author. It was determined that the debt-to-equity ratio, inventory ratio, and
total assets were significant factors that had a positive or detrimental impact on
profitability. It suggested enhancing solvency in order to lessen the fixed financial
strain on business profits and provide shareholders with the benefit of trading on
equity.

5. Daniel A. Moses Joshunar (2013), the study was carried out to determine the
financial strength and weaknesses of Tata Motors Ltd. utilising financial
statements from the previous five years. Trend analysis and ratio analysis are used
to comment on a company's financial situationIt is advised to boost the company's
debt levels for improved performance even while the financial performance of the
company is satisfactory.

6. Aruna Srivastava (2014) Top-down data analysis techniques, such as economic,

industry, company, and technical analysis, have been used to determine the
relationship between the market index and the automobile sector index. Mahindra
and Company having a strong stock market position, which will draw investors
and potentially spur growth and expansion. Tata Motors and Maruti Suzuki must
therefore be concerned about their inventory and growth.

7. Dieter Becker (2015) The report provides information on the state and prospects
of the global vehicle industry. The manufacturer, executive, and consumer
perspectives on four factors—mobility culture, technology fit, business model—
are reported in this survey also market share and readiness.

8. Takeh Ata and Navaprabha (2015) The author has created a conceptual model to
explain how capital structure affects financial performance. Capital structure is an
independent variable, and its value is determined by four ratios: financial debt,
equity, long-term debt, and short-term debt. Financial performance is a dependent
variable that is valued using four ratios: return on assets, return on equity,
operating profit margin, and return on capital employed. Total debt equity, total
asset debt, and interest coverage ratio are used to quantify financial success. With
the aid of SPSS22, the researcher has chosen 13 significant steel industries and
 implemented various statistical methods like standard deviation, correlation
matrix, anova, etc. for evaluating hypotheses.

9. Jothi K., and Geethalakshmi, A. (2016) attempt to assess the profitability and
financial status of a few selected companies in the Indian automobile sector, Using
statistical methods like ratio analysis, mean, standard deviation, and correlation.
The report reveals the profitability, short-term capital, and long-term capital have
a favourable association.

10. Velmurugan (2018) In the year 2018, study was conducted on "Determinants of
Profitability in the Indian Automobile Industry." Following the economic reforms
of 1991, the government altered the regulations for the automotive industry and
permitted 100 percent foreign direct investment. Positive changes in the industry
resulted from this transition. The study came to the conclusion that factors such as
leverage, size, age, working capital, asset turnover ratio, etc. have an impact on
the company's profitability. The research included the years 2008 through 2019.
For the study, manufacturers of motorcycles were chosen. According to several
analyses of the company's financial data, age, the expense to income ratio, and
assets invested in the business all have an impact on the company's profitability.

11. Dr.S.Saraswathi, (2019) An investigation was conducted in 2019 on the subject

of "A study on Financial Performance Evaluation utilizing Dupont analysis in
chosen Automobile Companies." The analysis of performance automotive
manufacturers was the goal of the study. The device DuPont analysis charts were
employed in this investigation. The Dupont analysis calculated return on equity
(ROE). Ten firms that are listed on the NSE stock exchange and involved in the
Indian automobile industry were chosen for the study. The data was chosen to
cover the years 2013 through 2017. Equity multiplier, net profit margin, and asset
turnover ratio were utilised in the study to compute return on equity. To support
 the hypothesis, statistical methods including correlation and regression analysis
were used in the study. The study came to the conclusion that all the variables are
positively correlated. In the financial performance of a few organizations, a
significant discrepancy was discovered.

12. Kaur Harpreet (2019) This study attempts to analyze the strengths and
weaknesses of Maruti Suzuki Co. and how both affected its market share in India.
Secondary data for this study has been gathered from yearly reports, journals, and
report automotive websites. Results indicate that MSL has successfully led the
Indian automotive industry over the past few years.

2.3 STATEMENT OF PROBLEM

The return on assets (ROA) decreased for all three categories of businesses, with small cap
businesses experiencing the greatest decline (Figure 1). The ROA has generally decreased but
has usually remained positive for large-cap and mid-cap companies, while it went negative
for small-cap companies between 2015 and 2018. Construction and real estate, consumer
goods, FMCG, industrial equipment, ports, mining & metals, power generation/distribution,
and textiles are some of the industries that have small cap enterprises with negative ROA.
Table 1 contains the analysis broken down by industry. The ROA of all manufacturing
companies has dramatically decreased in the sectors of real estate and construction, consumer
goods and FMCG, and industrial equipment throughout the period of 2005–19. This study is
an attempt to understand working, decline and recovery of manufacturing sector in India.

2.4 OBJECTIVES OF THE STUDY

•To conduct financial analysis of Jupiter Wagons Ltd. using various financial tools.

•To analyze the financial situation of large, mid and small cap firms of different
manufacturing sectors and compare their financial performance.
2.5 HYPOTHESIS OF THE STUDY

• How Jupiter Wagons Ltd. and other manufacturing firms dealt with downward trend for all
the firms with a recovery phase in the later years particularly for small cap firms and mid cap

firms.

2.6 RESEARCH METHODOLOGY

By using financial ratios as variables and firms as instances, principal component analysis of
factor analysis creates factor patterns of financial ratios. To produce more structured financial
patterns, the initial results of principal component analysis were rotated using the varimax
approach. By mandating that all components' eigenvalues be greater than 1, the number of
factors to be retrieved has been established. Data collection through secondary sources and
collection through articles, published report and magazines

2.7 Scope of the study

•The study will be conducted on behalf of the finance department of Jupiter Wagons Ltd.

•The study is done to know the financial performance of Jupiter Wagons Ltd., how they
analyze their financials and what measures they take to overcome challenges.

•The various financial ratios and financial analysis techniques used to understand the
performance of manufacturing sector.

2.8 LIMITATIONS OF THE STUDY

•The survey will be conducted only on available data.

•The accuracy of the results of study will depend on the data collected from various sources.

•Findings of this study may be influenced by personal bias of data providers.

(14)
 CHAPTER 3

Organizational Study

3.1 COMPANY PROFILE

ABOUT MANUFACTURING SECTOR :

The manufacturing sector is part of the goods-producing industries super sector group. The
Manufacturing sector comprises establishments engaged in the mechanical, physical, or

chemical transformation of materials, substances, or components into new products.

ABOUT JUPITER WAGONS LTD :

HISTORY- The Company was incorporated as a private limited company with the name
"Commercial Engineers & Body Builders Co Private Limited" on September 28, 1979. It
commenced business in 1979. Its name was changed to "Commercial Engineers & Body
Builders Co Limited" on March 25, 2010, reflecting the change in the constitution of the
Company from a private limited company to a public limited company under the Companies
Act, 1956, pursuant to a special resolution of the shareholders of the Company at an
extraordinary general meeting held on March 18, 2010.The fresh certificate of incorporation
consequent upon the change of name was granted on March 25, 2010 by the RoC.
(15)
3.2 Major Events:

29 January 1996

The Company signs a contract for the installation of a single wind electricity generating unit
with Madhya Pradesh Windfarm Limited.

September 2005

The Company welcomes Mr. Ajay Gupta as an Additional Director.

(i)The company started commercial production in 2005-2006 in the Mandla Factory, which it
later leased from Kailash Auto Builders.

(ii) The Company and Cho Thavee Dollasien Co. Ltd. of Thailand entered into a Technical
Know-How Agreement for the production of heavy vehicles such as tippers, bumpers, and
trailers under the combined trademark "CTVCEBBCO." Refer to "Strategic Alliances" in this
section of the Draft Red Herring prospectus for more information regarding this agreement.

1st September 2007

The draught Scheme of De-Merger proposed to be brought before the BIFR was approved by
the Company's shareholders in an EGM (see below in the entry against August 18, 2008).

August 1st 2007

A private equity fund named NYLIM made an investment in the company on August 1 in
accordance with the NYLIM SHA, and as a result, the company granted NYLIM 3,000
Mandatory Convertible Preference Shares with a face value of Rs. 100 apiece for a premium
of Rs. 99,900. The money was used to build new facilities as well as expand the company's
Richhai Factory I and Mandla Factory. Later, these Preference Shares were changed into
Equity Shares (see below in the entry against December 25, 2007).

(16)
December 25, 2007

Pursuant to the NYLIM SHA the Company allotted 142,789 Equity Shares at a premium of
Rs.
2001 each to NYLIM upon conversion of the 3,000 Preference Shares allotted to NYLIM.

August 18th 2008

The Mandla Factory was separated from Kailash Auto Builders Private Limited on August 18,
2008, and transferred to the company in exchange for 11,835 equity shares to be distributed to
Kailash Auto Builders Private Limited shareholders. Additional information about the
Scheme of De-Merger is provided below in this section of the Draft Red Herring Prospectus.

In 2007-2008

The Richhai Factory I and the Mandla Factory underwent expansion and renovation.

2008

Dun & Bradstreet and Fullerton India presented the 2008 "Best Medium Enterprise of the
Year" award to the company.

Corporation Bank's "Excellence Award, 2008" for Small and Medium Enterprises was given
to the company as part of the Corp Exel Awards.

November 2008

(i)The Company started commercial production at the Indore Factory in November 2008 (ii)

Asia MotorWorks Limited placed the company's first order for the supply of trailers.

2008-2009

(i)The company started operating in the railways division in 2008-2009.

(ii)At Richhai Factory I, the company installed robotic welding equipment.

(iii) TUV SUD Management Service GmbH granted the company accreditation in accordance
with ISO/TS 16949:2002.

12 December 2008

The Indian Railways issued the company its first purchase order for the provision of 290 side
and end walls.

The Scheme of De-Merger was submitted to the RoC on December 16, 2008, and it took
effect retroactively on March 31, 2007.

6 February 2009

Hino Motors Sales Private Limited, a group company of Toyota group India placed the
company's first order for the supply of refrigerated containers.

March 2009

The Company commenced commercial production at Richhai Factory II.

April 20, 2009

The Company received a purchase order for supply of ‘long hood structures’ from Diesel
Locomotive Works.

May 27, 2009

The Company entered into a Technical Know-How Agreement with a French company by the
name of Le Capitaine for the manufacture of vehicles fitted with refrigerated bodies and

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refrigerated containers. For further details as to the Le Capitaine Agreement, refer to
"Strategic Alliances" in this section of the Draft Red Herring Prospectus.

August 10, 2009

The Company obtained an order from the Indian Railways for the upgradation of 250 BOXN
wagons.

September 2, 2009

The Company obtained an order from the Indian Railways for supply of 200 Side- Walls and
End- Walls.

September 23, 2009

The Company obtained performance certificate from Wagon Repair Shop, Kota for
successfully supplying Side- Walls, End- Walls within the due date of delivery and in
accordance with specifications.

September 28, 2009

In order to operate the Jamshedpur Factory, the Company and Mithila Motors signed into a
Joint Project Agreement. Refer to "Strategic Alliances" in this section of the Draft Red
Herring Prospectus for additional information regarding the Joint Project Agreement.

November 6, 2009

(i) the Company received a request for the upgrade of 200 BOXN waggons from the Indian
Railways.

(ii) The Company and M. P. have a power purchase and wheeling contract.

For the captive use of the energy produced by its 225 KW wind electricity producing unit at
No. 35, Village Jamgodrani, District Dewas, Power Trading Co. Ltd. and M. P. Wind Farms
Limited.
December 2009

At the Jamshedpur Factory, the Company started producing on a commercial scale.

At Richhai Factory II, the company established a manufacturing facility for refrigerated vans,
which is now being tested.

The RDSO gave the company permission to proceed with the production of the end walls,
side walls, and flap doors for BOXNR waggons.

December 4, 2009

Integral Coach Factory evaluates the business and determines that it has the necessary
equipment and personnel to produce and provide the following items:

ICF MD Spec-200 Rev. 02 LHB Side-Wall and Roof Assemblies; car line pillars.

To lead its business in the railways sector, the company names Mr. Pradeep Gupta, who has
more than 30 years of experience in project management, production, marketing, product
engineering, quality assurance, vendor development, and export execution in the railway
industry.

January 18, 2010

Company received its first order for supply of tippers from Man Force Trucks Private
Limited.

February 15, 2010

Company’s Quality Management System’s compliance with ISO 9001:2008 standards

certified by Moody International Certification Limited.

March 2010
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Company nominated for the award of 'Truck Application Builder' of the year by CV
Magazine.
2011

-Jashn Beneficiary Trust sold shares to Commercial Engineers & Body Builders Co Ltd.

-At its Deori Plant, the company has begun commercial production and operation.

-The company and the Disaster Response Solution (DRS), Inc., an Ohio corporation, have
signed an MOU.

2012

-Company has received an order from Tata Motors Limited to supply of four number of
refrigerated vans.

-Intimation regarding MOU with 'Stone Intermodal Private Limited'.

2013

-"CEBBCO appoints Deepak Tiwary as CEO".

KEY PEOPLE-

• CEO - Abhishek Jaiswal

• MANAGING DIRECTOR - Vivek Lohia
• CFO - Sanjiv Keshri

HEADQUARTERS - Kolkata, West Bengal, INDIA.

3.3 PRODUCT PORTFOLIO

Jupiter Wagons Products

•WAGONS

•Open Wagons

•Covered Wagons

•Flat Wagons

•Hopper Wagons

•Container Wagons

•Special Purpose Wagons

Jupiter Wagon Accessories Products

•WAGON ACCESSORIES

•Alloy Steel Cast Bogies

•High Tensile Centre Buffer Coupler

•High-Capacity Draft Gear Jupiter Passenger Coach Products

PASSENGER COACH

•Train Set (Train 18)

•Passenger Coach

•Metro Coach

(23)
Jupiter Passenger Coach Accessories Products

•PASSENGER COACH ACCESSORIES

•Fabricated Bogies

•Coupler with Balanced Draft Gear

•Axle Mounted Disc Brake System

•Brake Disc and Split Brake Disc

•Brake Pad

Jupiter Complete Track Solutions Products

•COMPLETE TRACK SOLUTIONS

•Cms Crossings for Indian Railways

•Weldable Cms Crossings on Psc Slippers for Indian Railways

•Weldable Cms Crossings for European Railways

•Cms Arema Frogs American Railroads

•Rbmi Frogs & Smsg FrogsJupiter

3.4 VISION OF JUPITER WAGONS LIMITED

•To become first National and then a Global contributor to fundamental growth engines that
include mobility, defence, civic services and health care sectors by employing State of the Art
technologies at an optimum cost.

•We shall generate employment, develop skills for the local youth, be equal opportunity
employer, uphold the social obligations and control environmental risks.

3.5 MISSION

To be the best in our nation for both roads and railroads when it comes to mobility solutions.
By producing rolling stock (waggons and coaches), parts, and accessories, such as steel
castings and fabricated items, Axle Mounted Disc Brake Systems and Disc Brakes, cast
manganese steel crossings, and Weldable Crossings for various operations like Heavy-Haul
and High Speed, we will logically engage with the National Railways for both the freight and
passenger segments.

Our participation into Roadways mobility sector will comprise of road construction,
municipal disposers, fire engines, milk van, refrigerators van, ambulances, opera Tories,
special purpose defence vehicles, Recci vehicles, RAF vehicles, Water & Oil Tankers in the
heavy commercial automobile sector.

Wherever, essential and beneficial we shall bring in global technologies through joint
ventures, transfer of technology and technical collaborations to achieve the best suitability to
the purpose of application.

(25)
3.6 VALUES
We shall build up a suitable social fabric with our employees, staffs, vendors and associates
to spread the message of equality, harmony and peace.With our product and services we shall
offer the optimum value and effectiveness for a delightful nation.

3.7 SWOT ANALYSIS OF JUPITER WAGONS LIMITED

STRENGHTS-

•High DVM Mid and Small Caps (subscription) 505.9% returns for Nifty 500 over 5.6 years

•Consistent Highest Return Stocks over Five Years - Nifty500

Effectively using its capital to generate profit - RoCE improving in last 2 years -16.8%
returns for Nifty 500 over 1.9 years.

•Company with Low Debt

•Book Value per share Improving for last 2 years

•Company with Zero Promoter Pledge

•FII / FPI or Institutions increasing their shareholding

WEAKNESS-

•Decline in Net Profit (QoQ)

•Declining Net Cash Flow : Companies not able to generate net cash

•Sell Zone: Stocks in the sell zone based on days traded at current PE and P/BV
OPPORTUNITIES-

•High Momentum Scores (Technical Scores greater than 50) 319.5% returns for Nifty 500
over 5.1 years

•Highest Recovery from 52 Week Low

THREATS-
•No Outstanding Threats as such.

3.8 MAJOR COMPETITORS OF JUPITER WAGONS Co LTD.

1. A2Z Infra Engineering Ltd.

2. Cosco (India) Ltd.
3. Midas Infra Trade Ltd.
4. Williamson Magor & Company Ltd.

3.9 Other Performance information

Expensive Stars (DVM) returns of 274.5% for more than 5.4 years

High market capitalization businesses with limited public shareholding

Weekly Plan: Stocks with a High Momentum Score (subscription)

Nifty 500 returns over 1.2 years were 71.7%.

PE is high (PE > 40)

Stocks rising compared to the open price, previous close, and RSI Stocks

with High Trendlyne Valuation Scores indicate Expensive Valuations

Nifty 500 gains over 4.5 years were 177.2%.

New 52-week high for the top gainers.

(27)
(26)
 Chapter 4

Results, Analysis and Discussions

4.1 Financial analysis of Jupiter Wagons Co LTD.

KEY FINANCIAL RATIOS OF MAR MAR MAR MAR

JUPITER WAGONS (in Rs. Cr.) 22 21 20 19 MAR
18

PER SHARE RATIOS

Basic EPS (Rs.) 1.29 1.50 -0.02 14.42

-6.72

Diluted EPS (Rs.) 1.29 1.50 -0.02 14.42

-6.72

Cash EPS (Rs.) 1.89 1.93 0.91 11.07

-4.83

Book Value [ExclRevalReserve]/Share 17.64 16.34 10.67 9.71

(Rs.) -13.86

Book Value [InclRevalReserve]/Share 17.64 16.34 10.67 9.71

(Rs.) -13.86

Dividend / Share(Rs.) 0.00 0.00 0.00 0.00

0.00

Revenue from Operations/Share (Rs.) 30.41 25.70 14.05 24.12

17.68

PBDIT/Share (Rs.) 3.03 2.79 0.60 1.42

0.22
 PBIT/Share (Rs.) 2.43 2.25 -0.33 0.26
-1.66

PBT/Share (Rs.) 1.96 1.70 -0.29 9.91

-6.72

Net Profit/Share (Rs.) 1.29 1.38 -0.02 9.91

-6.72

PROFITABILITY RATIOS

PBDIT Margin (%) 9.97 10.86 4.27 5.86

1.25

PBIT Margin (%) 7.99 8.73 -2.33 1.05

-9.39

PBT Margin (%) 6.45 6.61 -2.03 41.09

-37.98

Net Profit Margin (%) 4.24 5.37 -0.11 41.09

-37.98

Return on Networth / Equity (%) 7.32 8.44 -0.14 102.08

0.00

Return on Capital Employed (%) 13.18 13.00 -2.36 1.43

33.58

Return on Assets (%) 4.66 5.39 -0.06 42.51

-17.70

Total Debt/Equity (X) 0.20 0.22 0.50 0.45

-0.67

Asset Turnover Ratio (%) 1.14 1.67 62.90 103.46

46.59
 LIQUIDITY RATIOS

Current Ratio (X) 1.59 1.51 1.06 1.34

0.19

Quick Ratio (X) 0.70 0.75 0.43 1.05

0.15

Inventory Turnover Ratio (X) 3.25 5.07 2.64 14.94

10.49

Dividend Payout Ratio (NP) (%) 0.00 0.00 0.00 0.00

0.00

Dividend Payout Ratio (CP) (%) 0.00 0.00 0.00 0.00

0.00

Earnings Retention Ratio (%) 0.00 0.00 0.00 0.00

0.00

Cash Earnings Retention Ratio (%) 0.00 0.00 0.00 0.00

0.00

VALUATION RATIOS

Enterprise Value (Cr.) 1,761.07 654.82 113.92 197.30

127.54

EV/Net Operating Revenue (X) 1.49 0.66 0.91 0.91

1.31

EV/EBITDA (X) 14.98 6.05 21.17 15.58

104.61

MarketCap/Net Operating Revenue (X) 1.44 0.59 0.56 0.85

0.83

Retention Ratios (%) 0.00 0.00 0.00 0.00

0.00
 Price/BV (X) 2.48 0.93 0.74 2.10
-1.06

Price/Net Operating Revenue 1.44 0.59 0.56 0.85

0.83

Earnings Yield 0.03 0.09 0.00 0.49

-0.46

Source: Dion Global Solutions Limited

Interpretations:

•At 7.60%, Jupiter Wagons has a subpar ROE. Due to the significant equity investments that auto
businesses make; ROE is a crucial financial metric.

•Additionally, they must incur significant debt to fund their production and research efforts,
thus their debt-to-equity ratio needs to be assessed. The debt-to-equity ratio for Jupiter Wagons
is low, at 0.20.

Jupiter Wagons
Cash Flow ------------------- in Rs. Cr. -------------------

Mar Mar 21 Mar 21 Mar 20 Mar 20

22

12 12 mths 12 mths 12 mths 12 mths

mths

Net Profit/Loss 76.02 0.00 65.90 -2.56 0.00

Before Extraordinary
Items And Taxes
 Net CashFlow From
Operating
Activities 59.51 0.00 67.38 -14.75 0.00

Net Cash Used In Investing -49.11 0.00 -60.20 -12.54 0.00

Activities

Net Cash Used From

Financing
Activities -16.76 0.00 22.39 7.08 0.00

Net Inc/Dec In Cash And sh

Ca
Equivalents -6.36 0.00 29.57 -20.21 0.00

Cash And Cash e

Equivalents Begin
of Year 47.05 0.00 17.48 23.03 0.00

Cash And Cash Equivalents 40.69 0.00 47.05 2.82 0.00

End of Year

Jupiter Wagons
Consolidated Profit & Loss ------------------- in Rs. Cr. -------------------
account

Mar 22 Mar 21

12 mths 12 mths
 INCOME

Revenue From Operations 1,165.29 988.98

[Gross]

Less: Excise/Sevice Tax/Other 0.00 0.00

Levies

Revenue From Operations 1,165.29 988.98

[Net]

Other Operating Revenues 13.06 6.77

Total Operating Revenues 1,178.35 995.75

Other Income 3.39 1.83

Group Share In Joint Ventures 0.00 0.00

Total Revenue 1,181.75 997.58
EXPENSES

Cost Of Materials Consumed 916.89 739.63

Purchase Of Stock-In Trade 0.00 0.00

Purchase of Crude Oil And 0.00 0.00

Others

Cost of Power Purchased 0.00 0.00

Cost Of Fuel 0.00 0.00

Aircraft Fuel Expenses 0.00 0.00

Aircraft Lease Rentals 0.00 0.00

Operating And Direct Expenses 0.00 0.00

Changes In Inventories Of -20.04 1.99

FG,WIP And Stock-In Trade

Employee Benefit Expenses 33.83 26.20

Finance Costs 18.17 21.12
 Provsions and Contingencies 0.00 0.00
Depreciation And Amortisation 23.38 21.18
Expenses

Miscellaneous Expenses 0.00 0.00

Written Off

Other Expenses 133.57 121.60

Less: Inter Unit / Segment / 0.00 0.00
Division Transfer

Less: Transfer to / From 0.00 0.00

Investment / Fixed Assets /
Others

Less: Amounts Transfer To 0.00 0.00

Capital Accounts

Less: Share of Loss From 0.00 0.00

Partnership Firm

Group Share In Joint Ventures 0.00 0.00

Total Expenses 1,105.79 931.72

Profit/Loss Before 75.95 65.86

Exceptional, ExtraOrdinary
Items And Tax

Exceptional Items 0.00 0.00

Profit/Loss Before Tax 75.95 65.86

Tax Expenses-Continued Operations
Current Tax 0.00 0.00
Less: MAT Credit Entitlement 0.00 0.00
Deferred Tax 25.99 12.13

Other Direct Taxes 0.00 0.00

Tax For Earlier Years 0.00 0.27

Total Tax Expenses 25.99 12.40
 Profit/Loss After Tax And 49.97 53.47
Before ExtraOrdinary Items

Prior Period Items 0.00 0.00

Extraordinary Items 0.00 0.00
Profit/Loss From Continuing 49.97 53.47
Operations

Profit Loss From Discontinuing 0.00 0.00

Operations

Total Tax Expenses 0.00 0.00

Discontinuing Operations

Net Profit Loss From 0.00 0.00

Discontinuing Operations

Profit/Loss For The Period 49.97 53.47

Minority Interest 0.02 0.00

Share Of Profit/Loss Of -0.31 -0.07

Associates

Consolidated Profit/Loss 49.68 53.40

After MI And Associates

OTHER ADDITIONAL
INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 1.00 1.00
Diluted EPS (Rs.) 1.00 1.00
Imported Raw Materials 0.00 0.00
Indigenous Raw Materials 0.00 0.00
Imported Stores And Spares 0.00 0.00
Indigenous Stores And Spares 0.00 0.00
 DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 0.00 0.00
Preference Share Dividend 0.00 0.00
0.00
Tax On Dividend 0.00

Interpretations:

•The company's operating profit for the most recent quarter was Rs. 30.27 Cr. It assists in assessing the
operating performance of the business, which is used to guide financial decisions.

•The company reported a profit loss of -6.49% for the year, with the most recent profit of Rs.
50.03 Cr. falling short of Rs. 53.50 Cr. in the prior year. In the upcoming year, profits will rise
as a result of new government permissions and rising demand.
Sales Growth

1 YEAR 18.34% 3 YEAR 76.09% 5 YEAR 62.08%

Figure 4.1.1
Profit Growth

1 YEAR-6.49% 3 YEAR-17.37% 5 YEAR

27.77%

Figure 4.1.2

ROE%
1 YEAR 7.6% 3 YEAR 7.38% 5 YEAR
128.11%

Figure 4.1.3
ROCE %

1 YEAR 11.83% 3 YEAR 11.13% 5 YEAR

23.43%

Figure 4.1.4

Share Holding Patten

 Figure 4.1.5

4.2 Stock Market Performance

As seen in the above figure it is clearly seen that the stock is in a Uptrend. Let us understand what
is a Uptrend structure.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.
 4.3 Jupiter Wagons Peer Comparison

Hindustan Aeronautics Ltd 2,729NSE 15.58 91,234 1.47 1,209 5,145

HAL

Cummins India Ltd 1,330NSE 41.34 36,876 1.39 252 1,922

CUMMINSIND

Thermax Ltd 2,131NSE 106.68 25,371 0.42 93 1,373

THERMAX

Grindwell Norton Ltd 1,941NSE 63.76 21,497 0.62 87 582

GRINDWELL

Bharat Dynamics Ltd 966NSE 28.71 17,705 0.86 76 529

BDL

Name CMP (₹) P/E Mar Cap.(Crs) Div. Yld.(%) NP Qtr (₹.Crs) Sales Qtr.
 Hindustan Aeronautics LTD.

As seen in the above figure it is clearly seen that the stock is in a Uptrend.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.
Sales Growth

Figure 4.3.1

Profit Growth

Figure 4.3.2
ROE%

Figure 4.3.3

ROCE %

Figure 4.3.4
Share Holding Pattern

Figure 4.3.5
 Cummins

As seen in the above figure it is clearly seen that the stock is in a Uptrend.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.
Sales Growth

Figure 4.3.6

Profit Growth

Figure 4.3.7
ROE%

Figure 4.3.8

ROCE %

Figure 4.3.9
Share Holding Pattern

Figure 4.3.10
 Thermax

As seen in the above figure it is clearly seen that the stock is in a Uptrend.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.

Although in past few months we can see that performance of stock has started going downwards we will
have to follow the stock for longer duration before making any conclusions.
Sales Growth

Figure 4.3.11

Profit Growth

Figure 4.3.12
ROE%

Figure 4.3.13

ROCE %

Figure 4.3.14
Share Holding Pattern

Figure 4.3.15
 Grindwell Norton LTD

As seen in the above figure it is clearly seen that the stock is in a Uptrend.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.

Although in past few months we can see that performance of stock has started going downwards we will
have to follow the stock for longer duration before making any conclusions.
Sales Growth

Figure 4.3.16

Profit Growth

Figure 4.3.17
ROE%

Figure 4.3.18

ROCE%

Figure 4.3.19
Share Holding Pattern

Figure 4.3.20
 Bharat Dynamics

As seen in the above figure it is clearly seen that the stock is in a Uptrend.

A stock's progression towards a higher price from its prior state is referred to as a uptrend. It will
continue to exist as long as the stock chart continues to show higher highs and higher lows.
Once the requirements are no longer satisfied, the upward tendency is reversed.
Sales Growth

Figure 4.3.21

Profit Growth

Figure 4.3.22
ROE%

Figure 4.3.23

ROCE%

Figure 4.3.24
Share Holding Pattern

Figure 4.3.25
 CHAPTER – 5

Summary of Findings, Conclusions and Suggestions

Summary of Findings, Conclusions, and Suggestions

In this research project we tried to understand technical analysis starting from scratch to the
point where we can make reasonable decisions. In the following research we studied about
the history relevance, importance, scope of technical, application on asset classes, limitations,
advantages and all other theoretical aspects. We also studied about various indicators and
tools along with their applications.

5.1 About the company

Mr. Kailash Gupta founded CEBBCO in 1979 to create and produce vehicle bodywork for
commercial vehicles (CVs). The business expanded its operations in late 2008 to include the
refurbishing of railroad waggons as well as the production of parts for locomotives, coaches,
and waggons. Furthermore, in November 2010 the business became public. Additionally, it
performs sporadic steel fabrication task labour. JWL purchased a 45.45% share in the
business on January 4. The Group's overall share in CEBBCO, including its firms and the
promoters of JWL, is 60.66%. The business creates and produces bodies for a variety of CVs,
including tippers, trailers, tankers, load freight, waste bin collectors, etc. They ultimately
serve a wide range of industries and sectors, including mining, building roads, moving
commodities, managing solid waste, municipal applications, and defence. Manufacturing
BOXN waggons (open top transporter waggons) and bogie container auto carrier waggons is
done for railways. The company will begin producing waggons in July 2019 after receiving
G-105 clearance from the Research Design and Standards Organization (RDSO). The
company now has six manufacturing facilities, five of which are in Madhya Pradesh and one
in Jharkhand.
In FY2020, CEBBCO reported a standalone net loss of Rs. 0.1 crore on an operating income
of Rs. 125.7 crore compared to a net profit of Rs. 88.7 crore on an operating income of Rs.
215.8 crore in the previous year.

In FY2020, JWL reported a standalone net profit of Rs. 39.4 crore on an operating income of
Rs. 812.6 crore compared to a net profit of Rs. 7.3 crore on an operating income of Rs. 544.7
crore in the previous year.

5.2 Quick Fundamental Look

Jupiter Wagons Limited's operating revenues range is Over INR 500 cr for the financial year
ending on 31 March, 2021. It's EBITDA has decreased by -15.47 % over the previous year.
At the same time, it's book networth has increased by 35.96 %.

5.3 Credit strengths

Consolidated debt protection that is at a comfortable level is provided by JWL, whose stable
cash accruals, strong debt coverage metrics, and low gearing all point to a strong financial
profile. Despite include the debt owed by CEBCCO and the liabilities associated with it as
part of JWL, ICRA believes that the major financial measures are still favourable.

Strong technical capabilities and backward integration - JWL has strong technical capabilities
in its waggon manufacturing business as a result of designing important waggon components,
such as cold rolled form (CRF) sections, in-house in the past.

Additionally, the business is working with an outside partner to create high-speed braking
systems, another crucial component. In the future, if JWL is successful in creating this
component, it will raise the company's total commercial prominence.

Healthy order book position – JWL’s order book position remains healthy with an
outstanding order book of ~1.4 times of FY2020 revenue. The healthy order book position
provides revenue visibility.

Diversifying revenue base with healthy private sector wagon orders – JWL along with
CEBCCO receives regular orders from the private sector. Such orders diversify the revenue
base and provide superior margins compared to orders from the IR.
Favourable outlook for wagon orders from Indian Railways - Demand for wagons from the
IR is likely to remain strong given its focus on expanding the freight business. Regular orders
from the IR are key to stable cash flows to the company.

5.4 Credit challenges

Substantial risks associated with client concentration - Since the IR accounts for more than 70% of
JWL's revenue, there are high risks associated with customer concentration.

Nevertheless, such risks are somewhat reduced by consistent and growing demand from the private
sector.

Weak solo financial profile of CEBBCO: Regular company losses and unfavourable debt
coverage indicators point to CEBBCO's weak standalone financial profile. With consistent
supply to the IR and a growing demand outlook from the commercial vehicle sector, the
company's business is projected to rebound in the current fiscal year.

Moderate levels of return on capital employed (RoCE) - Historically, JWL has reported
moderate levels of RoCE as a result of its business's low capacity utilisation and moderately
high working capital requirements.

The company’s ability to sustainably maintain a high capacity utilisation, which in turn would
result in an improvement in RoCE, is a key rating sensitivity.

5.5 Rationale
The improvement of Commercial Engineers & Body Builders Company Limited's
(CEBBCO) bank facility ratings takes into account the company's close operational and
financial ties to its primary shareholder, Jupiter Wagons Limited (JWL). ICRA has adopted a
consolidated view of the firms when upgrading the ratings. The term CE (Credit
Enhancement), which was formerly attached to CEBBCO's ratings, has been eliminated as a
result of a change in the rating methodology.

The consolidated entity's established market position in the domestic waggon manufacturing
industry, technical know-how and backward integration, as demonstrated by its in-house
design of key waggon components, and its comfortable debt metrics, as demonstrated by
healthy debt coverage indicators and low gearing, are all factors that contributed to the
upgraded ratings. While 2 assigning the ratings, ICRA has evaluated the combined financial
indicators of CEBBCO and its 45.45% shareholder, JWL, given the operational and financial
linkages between the entities. ICRA also notes that a merger of the two companies has been
filed and is awaiting regulatory approvals. The 1,200 crores in pending orders for JWL,
which is more than 1.4 times the company's anticipated sales for FY2020 and provides the
independent firm with visibility into its revenue and cash flow, comforts the ratings. The
financial performance of CEEBCO, which has historically been weak as evidenced by its
consistent business losses and unfavourable debt coverage indicators, is likely to improve in
FY2021. This is because the company has a healthy order book for waggons worth Rs. 160
crore and increased demand from the commercial vehicle (CV) industry.

The above strengths are partially offset by high client-concentration risks of the combined
entity, with orders from the Indian Railways (IR) accounting for the major portion of the
combined order book. ICRA notes that sales to the IR contribute over 70% to JWL’s revenues
and hence, regular wagon orders from the IR are key to stable cash flows of the company.
Inadequate order inflow from the IR in the past vis-à-vis its wagon manufacturing capacity
had resulted in JWL reporting moderate levels of return on capital employed (RoCE).
Nevertheless, an increasing number of private sector wagon orders and a favourable outlook
on steady order inflow from the IR, given the focus of the latter on increasing its freight
business, mitigate such risks to an extent. While assigning the ratings, ICRA has noted JWL’s
plans to invest in joint ventures (JVs) over the near to medium term. These investments are
mainly aimed towards acquisition of technologies, which are likely to strengthen the
operating profile of the company over the long term. The extent of returns, both operational
and financial, as well as the funding pattern of the investments would have an impact on the
overall risk profile of the company going forward. Over the short to medium term, ability to
increase the scale of business of the combined entity while maintaining healthy margin and
liquidity would be key rating sensitivities.

The Stable outlook on the [ICRA]A- rating reflects ICRA’s opinion that cash flows of the combined
entity would remain comfortable relative to its debt service obligations.
5.6 Liquidity position: Adequate

With a good operating cash flow of close to Rs. 50 crore annually, no significant capital
expenditure commitments for FY2021, and moderate working capital utilisation levels of less
than 50%, JWL has sufficient liquidity. Through an equity infusion under Foreign Direct
Investment, the company returned a sizeable amount of its term debt in FY2021 (FDI). The
overall debt commitment will decrease in the future. ICRA anticipates that JWL will be able
to pay its short-term obligations while still having enough cash on hand to cover expenses.

In FY2020, CEBBCO reported a standalone net loss of Rs. 0.1 crore on an operating income
of Rs. 125.7 crore compared to a net profit of Rs. 88.7 crore on an operating income of Rs.
215.8 crore in the previous year.

In FY2020, JWL reported a standalone net profit of Rs. 39.4 crore on an operating income of
Rs. 812.6 crore compared to a net profit of Rs. 7.3 crore on an operating income of Rs. 544.7
crore in the previous year.

5.7 Findings
• The most significant increase in assets is in the non-current investments. The company also
started making current investments from 2021. The company started increasing its inventories
and started to keep fewer quick assets and more current assets in the form of liabilities.

• The quick ratio of the company of the company does not meet the 1:1 ratio, which indicates that
the company is not able to meet the current obligations using liquid assets.

• The fixed assets keep increasing for the last three years. During the pandemic season, there is a
reduction in the amount of fixed assets. The fixed assets continue to grow after pandemic and
asset turnover ratio of 1.14 shows that the company has been using their assets efficiently to
generate sales revenue.

• The inventory and sales of the company has been growing over the past 5 years which shows
that demand of their product is increasing.
•The most significant change in the liabilities is in the total current liabilities. The short-term
borrowings of the company keep increasing over the past 5 years which result in a total
increase in the net current liabilities.

• In the comparative balance sheet between the years 2021 and 2022, the following changes have
been observed

i. The share capital of the company remains constant between the two years.

ii. The total current assets have increased by 17%. iii. The total assets have

increased by 8%. iv. The total non-current assets have reduced by 0.25%.

v. The total fixed assets have increased by 2.5%.

vi. The total non-current liabilities have decreased by 16%. vii. The total

liabilities have increased by 8%.

5.8 Suggestions

• Inventory turnover ratio, which is 3.25 times for Jupiter Wagons, is an important factor in
determining whether the company's inventory is being sold and whether or not the sales
image is accurate. It does a lousy job of controlling its inventory. If the company starts
focusing on their inventory control, they can ultimately improve their profitability.

• A dividend of 0 rupees per share is paid by Jupiter Wagons. It indicates that a business does
not want to distribute profits to its shareholders. At 0%, the dividend yield is small. But it is
fine as long as they offer a lump sum payment at end of investment term.

• With a strong promoter ownership stake of 74.62% and no pledging, the company has no
promoters. The company can dilute their promoter ownership to improve their stock
performance.

• Current Ratio of 1.59 is healthy for the company and looks very promising for the future.

• The company should try to increase their ratio to maintain the recommended quick ratio
that is 1:1. The company is nowhere close to the recommended quick ratio with their
highest quick ratio recorded being 0.70:1. This will intern make the company’s liquidity
position better.
• It’s been suggested to maintain certain number of reserves for the future years, as the company
has large untapped markets in the international sector. The company can use these reserves for
their expansion program.

5.9 CONCLUSIONS

The Company's overall performance keeps improving, as seen by the significant rise in Sales
from the previous years. The company is in a strong financial position, according to the
various techniques used for the financial analysis. The firm has made significant operational
improvement and is expected to improve their profitability in coming years.

By looking at the company's balance sheet, we may determine that it is doing well
financially. Comparative balance sheets, trend analyses, and ratio analyses also show that the
company is doing well.

Additionally, the management is handling the pandemic situation properly. The company's
directors are highly skilled and knowledgeable individuals from various backgrounds and
industries. They aid companies in making choices and implementing particular policies.

Even the company's staff members are well educated and experienced. Additionally, they
function efficiently and effectively. Because the company is a significant co-operative
organization in this city, it has a bright future. Overall, the firm is operating well and is in a

strong financial position.

5.10 References

1. Debarshi Das, Basu, and Deepankar (2015). Working Paper from the University of
Massachusetts on "Profitability and Investment: Evidence from India's Organized
Manufacturing Sector."

2. Dr. Roy, S. G. (2015). Equity Research: Fundamental and Technical Analysis.

International Journal of Science and Research, 4 (9), 272-275.

3. M. Agarwal and A. Chakravarty (2017). China and India: The International Context and
Economic Growth, Manufacturing Performance, and Rural Development, in Manmohan
Agarwal, Jing Wang, and John Whalley (editors.), The Economies of China and India,
Cooperation and Conflict, Volume 1, World Scientific, Singapore, 2017.

4. Abey, Joji & Ramaswamy, Velmurugan. (2018). Determinants of Profitability in Indian

Automobile Industry. International Journal of Pure and Applied Mathematics. 119.

5. Bhagyalakshmi, K. and Saraswathi, S., 2019. A study on financial performance evaluation

using DuPont analysis in select automobile companies. International Journal Of
Management.

6. M. Agarwal, R. Azim, and N. Betai (2020). The finances, growth, and manufacturing
industry of India. Research and Information Systems, New Delhi, Discussion Paper No.
253.

Web References
1. www.moneycontrol.com
2. www.investopedia.com
3. www.ticker.finology.in
5.11 Appendices

Jupiter Wagons
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------
Mar 22 Mar 21 Mar 20 Mar 19 Mar 18

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 387.45 387.45 89.48 89.48 54.94

Total Share Capital 387.45 387.45 89.48 89.48 54.94
Reserves and Surplus 295.87 245.83 5.96 -2.62 -131.11
Total Reserves and Surplus 295.87 245.83 5.96 -2.62 -131.11

Total Shareholders Funds 683.32 633.27 95.44 86.86 -76.17

Hybrid/Debt/Other Securities 0.00 0.00 0.00 8.99 8.99

NON-CURRENT LIABILITIES

Long Term Borrowings 27.50 32.67 26.90 34.03 5.71

Other Long Term Liabilities 0.42 0.42 0.48 28.61 33.94

Long Term Provisions 3.01 2.97 1.25 0.24 0.34

Total Non-Current Liabilities 30.92 36.06 28.63 62.89 39.98
CURRENT LIABILITIES

Short Term Borrowings 111.25 104.59 20.84 4.63 45.21

Trade Payables 143.67 141.50 34.41 25.30 25.59

Other Current Liabilities 100.50 73.70 19.06 17.94 163.20

Short Term Provisions 3.14 2.11 1.52 1.97 1.72

Total Current Liabilities 358.57 321.90 75.82 49.84 235.72
 Total Capital And Liabilities 1,072.81 991.23 199.89 208.58 208.53

ASSETS

NON-CURRENT ASSETS
Tangible Assets 394.29 383.44 110.70 112.68 134.53
Intangible Assets 31.44 32.81 0.36 0.29 0.00
Capital Work-In-Progress 22.20 20.53 5.55 0.13 1.98
Intangible Assets Under 0.00 0.19 0.20 0.00 0.00
Development
Fixed Assets 447.94 436.96 116.80 113.10 136.52
Non-Current Investments 10.04 3.89 0.00 0.00 0.00

Deferred Tax Assets [Net] 27.10 53.09 0.00 0.00 0.00

Long Term Loans And Advances 0.46 0.41 0.56 0.58 0.44
Other Non-Current Assets 17.96 10.47 2.09 27.94 27.76
Total Non-Current Assets 503.49 504.82 119.45 141.62 164.72
CURRENT ASSETS

Inventories 319.43 244.30 47.57 14.44 9.27

Trade Receivables 70.97 72.12 11.11 17.75 6.85
Cash And Cash Equivalents 68.88 71.36 4.50 23.90 4.41
Short Term Loans And Advances 0.56 0.61 1.99 2.50 1.96
Other Current Assets 109.47 98.02 15.27 8.36 21.32
Total Current Assets 569.31 486.41 80.44 66.95 43.81

Total Assets 1,072.81 991.23 199.89 208.58 208.53

OTHER ADDITIONAL
INFORMATION

CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 45.92 54.87 47.24 40.23 46.66

CIF VALUE OF IMPORTS
 EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign Currency 0.61 0.00 0.00 0.00 2.73

REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS

Dividend Remittance In Foreign - - - - -

Currency

EARNINGS IN FOREIGN EXCHANGE

FOB Value Of Goods - - - - -
Other Earnings - - - - -
BONUS DETAILS
Bonus Equity Share Capital 36.77 36.77 36.77 36.77 36.77
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted - - - - -
Market Value

Non-Current Investments 10.04 3.89 - 0.00 0.00

Unquoted Book Value

CURRENT INVESTMENTS
Current Investments Quoted - - - - -
Market Value

Current Investments Unquoted - - - - -

Book Value