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Why Olectra Greentech Share Price is Rising

Jul 8, 2023

Why Olectra Greentech Share Price is Rising

In our previous article, we discussed the factors behind the surge in Olectra Greentech shares in June 2023. Since then, the electric-bus manufacturer has continued to dominate the market headlines with its impressive performance.

Demonstrating strong momentum, Olectra Greentech shares have once again experienced a significant upward trend.

During the recent trading sessions, the stock recorded substantial gains for a second consecutive day. On Friday, it soared by 17.7%, reaching a new 52-week high of Rs 1,247.8, surpassing its previous closing price of Rs 1,043.3.

So far in 2023, Olectra's shares have soared by an impressive 144%, far outpacing the 8% rise in the Sensex.

Here's what's driving the rally in Olectra Greentech shares...

Mega EV order

Olectra Greentech on Friday secured a Letter of Intent (LoI) from the Maharashtra government for the supply of electric buses. The LoI was awarded to a consortium comprising Olectra Greentech and Evey Trans Private (Evey) for 5,150 electric buses.

The order, received from the Maharashtra State Road Transport Corporation (MSRTC), entails the supply, operation, and maintenance of the 5,150 electric buses. With an approximate value of Rs 100 billion (bn), this order surpasses Olectra Greentech's market capitalisation.

The deal follows a gross cost contract model based on an OPEX (Operating Expense) approach and spans 12 years, as stated by Olectra Greentech.

Under the contract, Olectra Greentech will supply the buses to Evey, who will then facilitate the delivery over 24 months. Additionally, Olectra Greentech will provide maintenance services throughout the entire duration of the contract.

Earlier this year, the company bagged an order from Telangana State Road Transport Corporation for 550 electric buses. The order is worth Rs 32 bn and is the largest electric bus order in Telangana's history.

The company has also inked a pact with Reliance Industries to develop hydrogen buses. The two companies will work together to develop and deploy hydrogen fuel cell buses in India.

Big expansion plans

Going forward, the company aims to expand its manufacturing capacity by setting up a new plant in Andhra Pradesh. This facility, with a capacity of 6,000 buses per year, will enable Olectra Greentech to meet the increasing demand for electric buses in India and overseas.

The company is also establishing a new greenfield plant with a capacity of 5,000 units per year, scalable up to 10,000 units per year. The company has acquired 150 acres of land in Hyderabad for this purpose.

Furthermore, Olectra Greentech has commenced trials of the E-tipper and plans to launch it soon. The company also has plans to enter the staff transport segment and strengthen its presence in inter-city/inter-state private transport.

Additionally, Olectra Greentech envisions deploying TARMAC buses in airports to cater to the specific needs of airport transportation.

Additionally, Olectra Greentech intends to diversify its product offerings by venturing into other EV segments, including three-wheelers and trucks. By expanding its portfolio, the company aims to capture a larger share of the growing electric vehicle market.

Strong growth prospects

Olectra Greentech stands to benefit from strong growth prospects in the electric vehicle market.

The Indian government has displayed a commitment to promoting electric vehicles through significant investments. Initially, Rs 8.9 bn was allocated under the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, which was later increased to an impressive Rs 100 bn in FAME-II.

Furthermore, the government has set an ambitious target of achieving 30% electric vehicles on the roads by 2030. To support this objective, the government has implemented various policies and incentives to encourage the adoption of electric vehicles.

Additionally, the company is planning to expand its export capabilities. The company has been actively exporting its products to different countries and aims to further enhance these capabilities.

These favourable policies, combined with the increasing awareness and demand for electric vehicles, create a conducive environment for Olectra Greentech's growth within the domestic market.

How Olectra Greentech shares have performed recently

Olectra Greentech share price has given real multibagger returns in the last year, rallying around 115%.

The stock is up 54.9% in the past month.

Olectra Greentech touched its 52-week high of Rs 1,249 on 7 July 2023 and a 52-week low quote of Rs 374.1 on 23 February 2023.

At the current price, Olectra Greentech trades at a PE multiple of 142.9x and a price-to-book value multiple of 11.9x.


About Olectra Greentech

Olectra Greentech is India's largest pure electric bus manufacturer. The company's manufacturing facilities are in Hyderabad, India.

After leading in the commercial run of electric buses, the company is expanding its product line in the e-mobility segment for 3-wheeler electric autos and electric trucks.

Olectra Greentech is also an ISO-9001:2008 certified company. Its research & development (R&D) centre is recognised by the Department of Scientific and Industrial Research, Government of India.

To learn more about the company check out, Olectra Greentech's financial factsheet and quarterly results.

You can also compare the company with its peers

Olectra Greentech vs Insolation Energy

Olectra Greentech vs Ultra Wiring

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...


Which are the best electric vehicle stocks in India right now?

As per Equitymaster's Indian Stock Screener, here is a list of the best electric vehicle stocks in India right now...

These companies have been ranked as per their PE (Price to Earnings) ratio. Generally, speaking, high PE stocks are considered to be expensive. And low PE stocks are said to be cheap.

Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.

Where can I find a list of electric vehicle stocks?

The details of listed electric vehicle companies can be found on the NSE and BSE website.

For a curated list you can check out our list of electric vehicle stocks.

What kind of dividend yields do electric vehicle stocks offer?

There is no consistent trend of dividends across the industry, with different companies adopting different dividend policies.

For more details, check out our list of top electric vehicle stocks offering high dividend yields

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