Stock of this car & utility vehicles company has zoomed 115% in 3 months

Shares of Olectra Greentech were locked at 5 per cent upper circuit at Rs 854.95 on the BSE on Tuesday on expectation of healthy earnings growth going forward

Shares of Olectra Greentech were locked at the 5 per cent upper circuit at Rs 854.95 on the BSE on Tuesday on expectation of healthy earnings going forward. The stock of the car and utility vehicles company has zoomed 115 per cent in the past three months, as compared to a 0.63-per cent decline in the S&P BSE Sensex. It had hit a record high of Rs 912 on November 18, 2021.

Currently, Olectra Greentech is trading under the T group on the BSE. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed. Till 11:13 am, a combined 321,617 shares had changed hands and there were pending buy orders for 11,051 shares on the NSE and BSE.

Olectra Greentech is into manufacturing of polymer insulators since 2003. The company has tied up with BYD (a Chinese battery and electric car maker) for manufacturing of electric buses. Electric buses are sold under the joint brand name of Olectra BYD. It has successfully delivered a total of nearly 386 e-buses to various state transport undertakings (STUs) in India and a few private parties till September 30, 2021.

On December 13, 2021, ICRA rating agency reaffirmed the enhanced ratings of Olectra Greentech's Rs 265 crore long term/short term – non-fund based instrument with a positive outlook.

"The ratings factor in the expected strong performance of Olectra Greentech’s e-bus division in H2 FY2022 which is likely to support growth in its revenues and margins. The company’s order book of the e-bus division improved significantly to 1,575 buses as on November 16, 2021 as against 792 as on June 30, 2020," ICRA said.

While the order execution was impacted by the Covid-19 pandemic over the past 18 months, the company plans to deliver ~100-110 buses in Q3 FY2022 and ~200 – 300 buses in Q4 FY2022 (as against 88 buses sold in FY2021 and 29 buses in H1 FY2022) which would lead to significant growth in revenues and healthy profits.

It's ability to achieve the growth and the timely delivery of the buses would remain a key rating monitorable. The ratings factor in the favourable demand prospects for electric vehicles (EV'-s), which would aid healthy order inflow and ramp-up in operations, the rating agency said.