5 Fundamentally Strong EV Stocks Down 50% from 52 Week Highs

The electric vehicle (EV) industry of India is experiencing some notable changes, driven by integration of connectivity and smart features across motorcycles and four wheelers.

With the rapid evolution of technology, EV manufacturers are incorporating smart features to enhance the overall riding experience and convenience for users.

Additionally, with NITI Aayog aiming for 70% penetration of electric vehicles (EVs) across all types by 2030 and targeting net-zero carbon emissions by 2070, the industry does not seem to have reached its peak.

Many companies are already pouncing on this growth story, leading rational investors to believe that the industry is approaching the height of its cycle.

However, this may not be the case. While numerous EV giants have made significant strides in capitalising on the EV trend and some have been quite successful, there are still companies in the market that are performing well, even though their share prices may not reflect this success.

In this article, we will examine some fundamentally strong EV stocks trading 50% below their 52-week highs, which may potentially indicate a mis-valuation by the market.

Let's have a closer look...

#1 JBM Auto

First on the list is JBM Auto.

JBM Auto is a leading player in the global electric bus and EV ecosystem. It specializes in manufacturing sophisticated, technologically advanced, zero-emission electric buses that set class-leading benchmarks.

It has established the largest dedicated integrated electric bus manufacturing facility outside of China, in the Delhi-NCR region. This facility has the capacity to produce 20,000 buses annually.

JBM currently offers a diverse portfolio of electric buses, including models for city transport, intercity travel, luxury coaches, staff shuttles, school buses, and special purpose vehicles.

Coming to its financials, in the second quarter of FY25, the company reported an increase in sales of 4.5% to Rs 12.8 bn.

The operating profit for the quarter stood at Rs 1.6 bn. While the operating profit margin stood at 12% versus 11%, in Q2 FY24.

The net profit for the quarter stood at Rs 530 m, with the net margin increasing to 4.1% versus 4%, in Q2 FY24.

Below is the chart showing annual performance of the share price.

JBM Auto reached its 52-week high share price of Rs 2,482 on 19 February 2024. Currently, the share price is trading at Rs 1,500, which is 38% lower than the 52-week high.

Going ahead, the company is targeting revenue of Rs 30 bn from its electric vehicle business for the current financial year, a significant increase from Rs 17.5 bn in FY24. Additionally, JBM Auto aims for an operating margin exceeding 12% for FY25.

Currently, the company has an order book of 5,000 buses, and it plans to deliver 2,500 of those within this financial year. It has no plans to list its EV business or bring in a strategic investor.

JBM Auto is also actively seeking more tender opportunities as cities and states across the country prioritise bus transportation.

For more information, you can check out its financial factsheet and quarterly results.

#2 Olectra Greentech

Next in the list is Olectra Greentech.

Olectra Greentech Limited is an India-based company that manufactures electric buses, electric trucks, and composite polymer insulators.

Olectra Greentech's electric buses include the K9, K7, K6, X2, Electric Bus v2, iX Electric Bus, and CX2 Electric Coach Bus. These buses are designed for long-range operations and have customisable seating capacity.

The company manufactures seven-meter, nine-meter, and twelve-meter models of air-conditioned electric buses in India.

Coming to its financials, the company's revenue jumped 70.5% from Rs 3.1 bn to Rs 5.2 bn in September 2024 quarter.

The operating profit for the period stood at Rs 810 m. The operating profit margin stood at 16%, versus 13% YoY.

Meanwhile, net profit rose 156.5% YoY from Rs 477 m to Rs 186 m during the same period. While the net margin saw a rise to 9.2%, versus 6.2% YoY.

Below is the chart showing annual performance of the share price.

Over the past year, the share price of Olectra Greentech reached its highest point on 19 February 2024, at Rs 2,221.9. Currently, the share price stands at Rs 1,395, representing a 37% discount to the 52-week high price.

Olectra Greentech has recently achieved an important milestone by successfully renewing its collaboration agreement with BYD, a leading Chinese electric vehicle (EV) manufacturer. The renewed partnership, lasting until 31 December 2030, highlights the long-term growth potential of bus electrification in India.

In addition to this, Olectra is expanding its manufacturing capacity. The company has initiated a strategic move to acquire land for a new state-of-the-art facility. This plant will be capable of producing up to 10,000 electric buses annually.

With this new facility, Olectra aims to strengthen its position as a leader in the electric bus market while ensuring greater execution efficiency and faster delivery times for its growing order book.

For more information, you can check out its financial factsheet and quarterly results.

#3 Ola Electic Mobility

Next in the list is Ola Electric Mobility.

Ola Electric Mobility is a leading EV manufacturer in India, specialising in the vertical integration of technology and manufacturing for EVs and their components, including battery cells.

Its operations are centered around the Ola Future factory, where production of EVs and critical components like battery packs, motors, and vehicle frames are undertaken.

The company maintains a direct-to-customer distribution network with more than 750 experience centres across India, as well as a robust online presence, making Ola Electric the largest company-owned network of automotive experience centers in the country.

Coming to its financials, Ola Electric saw an increase in sales of 39.1% YoY to Rs 12.1 bn, in Q2 FY25.

Gross margin for the auto segment was 20.6%, a slight increase compared to Q2 FY24.

At the operating level, the company reported a loss of Rs 3.8 bn. The net loss for the quarter was Rs 4.9 bn.

During the quarter, the company experienced an increase in the competition in the auto industry, however the management remains confident in its position.

Below is the chart showing annual performance of the share price.

Since its listing in August 2024, Ola Electric has seen its highest share price of Rs 146, on 19 August 2024. Currently, the share price is trading at Rs 74, which is at a staggering 49% discount versus its highest closing price since listing.

Going ahead, Ola Electric is working aggressively on expanding its distribution and service network to strengthen its market position.

As part of its strategy, the company aims to have 2,000 company-owned outlets and currently operates 1,000 network partner stores, which it plans to increase further by March 2025.

This extensive network ensures that Ola's presence reaches deep into tier 2 and tier 3 towns, offering better access and service support to customers across India.

The company is also focused on launching a series of new products to diversify its portfolio. Over the next two years, Ola plans to roll out over 20 new vehicles, including scooters, motorcycles, and three-wheelers.

This includes the much-anticipated Roadster motorcycle series, set to launch in phases starting in March 2025.

For more details about the company, you can have a look at Ola Electric factsheet and quarterly results on our website.

#4 TVS Motors

Next in the list is TVS Motors.

TVS Motor Company Ltd is engaged in manufacturing two-wheelers and their accessories. It currently manufactures a wide range of two-wheelers and three-wheelers.

TVS is one of the leading players in the two-wheeler industry and is the only company to have a presence in all three categories, i.e., motorcycles, scooters, and mopeds, catering to domestic and international markets.

TVS has been aggressive in the electric two-wheeler (E2W) market, with the company launching new variants to capture the growing demand.

Coming to its financials, the company reported an increase in the sales of 13.8% YoY to Rs 113 bn.

The operating profit for the quarter grew to Rs 16.2 bn, versus 13.4 bn. The operating profit for the quarter remained flat at 14%.

On the bottom-line front, the company saw a 33% YoY growth to Rs 8.9 bn. The net profit margin for the quarter increased to 5.2% versus 4.2%, in Q2 FY25.

Below is the chart showing annual performance of the share price.

In the past 52 weeks, the share price reached its highest point of Rs 2,958 on 27 September 2024. Currently, the share price is trading at Rs 2,304, a discount of 22% to its 52-week high.

TVS Motor is all set to accelerate its EV launch plans. It would be increasing its capacity to manufacture 50,000 electric vehicles per month.

It also has plans to enter the electric three-wheeler segment with both cargo and passenger vehicles. The company has been acquiring electric bicycle brands in Europe and the company has a plan to launch an electric bicycle in India soon.

For more details, check out TVS Motor's fact sheet and quarterly results.

#5 Tata Motors

Next on the list is Tata Motors.

Tata Motors is involved in the production of a wide range of vehicles, including passenger cars, commercial vehicles, utility vehicles, electric vehicles, and defence vehicles.

It has operations in India, the UK, South Korea, South Africa, China, Brazil, Austria, and Slovakia through a strong global network of subsidiaries, associate companies and Joint Ventures (JVs), including Jaguar Land Rover in the UK and Tata Daewoo in South Korea.

Coming to its financial performance, Tata Motors saw a slight decline in the revenue during the quarter Q2 FY25, by 3.5% to Rs 1 tn.

On the operating profit front, the company saw a decline of 12% YoY to Rs 121.6 bn. The operating profit margin for the quarter saw a decline to 12%, versus 13%, in Q2 FY24.

During Q2FY25, the company reported an 11% YoY decrease in consolidated net profit, reaching Rs 34.5 bn, down from Rs 38.3 bn in the same period last year. This decline in net profit reflects challenges in both domestic and international markets.

Below is the chart showing annual performance of the share price.

The share price over the past year reached its highest point on 30 July 2024, at Rs 1,161.8. Currently, the stock is trading at Rs 778, a discount of 33% from its highest price within the past year.

Going ahead, the company is prioritising the EV market, planning to mainstream EVs with a broader portfolio and a strengthened ecosystem to capture significant market share.

As supply constraints ease and demand rises in the latter half of FY25, Tata Motors remains vigilant about global market conditions, especially in China and Europe.

By balancing growth initiatives with careful resource management, Tata Motors is positioned to address immediate challenges while setting the stage for sustained, long-term growth.

To know more about the company, check out Tata Motors financial factsheet and its latest quarterly results.

Conclusion

The electric vehicle industry in India shows immense promise, particularly with the government's ambitious EV targets.

However, there are significant challenges that cannot be ignored. Despite the apparent growth trajectory, several factors, such as fierce competition, and regulatory hurdles continue to create uncertainty.

While some companies are indeed thriving, the market's volatility, coupled with fluctuating investor sentiment, suggests that not all the perceived opportunities are as lucrative as they may seem.

Many fundamentally strong companies are currently trading at considerable discounts, indicating potential mispricing or market overreaction.

As the industry matures and evolves, investors should be cautious of inflated expectations and exercise caution.

Investors should evaluate any investment opportunity on its merit, weighing both the risks and rewards, and keeping a watchful eye on the broader economic and regulatory landscape.

Investors should also consider corporate governance as one of the criteria for due diligence before considering an investment.

Happy Investing.

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