Olectra Greentech surges 23% in one week on healthy business outlook

The company had said the strong demand continues with its net order book position of electric buses standing at 8,209 numbers after delivering 214 buses in H1.

Shares of electric vehicles (EV) manufacturer Olectra Greentech hit a new high of Rs 1,648.85, surging 7 per cent on the BSE in Wednesday’s intra-day trade. In past one week, the stock has rallied 23 per cent owing to healthy business outlook.

In past one year, the market price of Olectra has more-than-doubled or zoomed 231 per cent. In comparison, the S&P BSE Sensex gained nearly 19 per cent during the period.

The company is primarily engaged in the manufacturing of composite polymer insulators, electric buses and electric trucks.

The company’s profit after tax (PAT) nearly tripled to Rs 18.58 crore in September quarter 2023-24 (Q2FY24) mainly on the back of higher revenues. In the year-ago period, the PAT was Rs 7.42 crore. Revenue grew 73 per cent year-on-year to Rs 307.16 crore due to increase in vehicle deliveries.

The company said its EBITDA (earnings before interest, taxes, depreciation, and amortization) in Q2FY24 reached an impressive Rs 45.06 crore marking a substantial 72 per cent increase compared to the previous year. About the operating margins, both the divisions earned very good margins due to continuous design optimization and higher export sales in the insulator segment and due to revenue mix in the EV segment, it added.

Olectra had delivered over 1,400-plus electric buses and 35 electric tippers till Q2FY24. The momentum has started in the second quarter and is getting accelerated further in Q3 and Q4 to meet the current financial-year-24 target. The strong demand continues with the company's net order book position of electric buses standing at 8,209 numbers after delivering 214 buses in H1.

In July last year, Olectra said that consortium of Olectra Greentech and Evey Trans Private had received a Letter of Intent (LOI) from MSRTC relating to supply, operation and maintenance of 5,150 electric buses and allied electrical and civil infrastructure on gross cost contract basis.

Convergence Energy Services Limited-CESL under the mandate of NITI Aayog would be calling tenders for procurement of more than 50,000 electric buses within the next few years. The market for electric buses is much higher considering that the 50,000 number is less than 10 per cent of the actual buses plying on Indian roads today, Olectra said in its FY23 annual report dated September 4, 2023.

As the population is rising demand for induction of more buses is already felt as evidenced from various tenders floated by the State Transport Undertakings (STUs) for their new bus depots serving additional routes. Furthermore, many of the internal combustion engine (ICE) buses which are now operational would have to be replaced with electric buses. The demand for electric buses is expected to grow continuously, it added.

There is a surge in the demand for electric tippers and it is expected to grow in the near future owing to the infrastructure developments being undertaken by the Government of India and/or private sector including construction industries, as these industries use heavy earth moving vehicles which includes tippers, the company said.