Olectra Greentech stock gains 9% to hit new record high, up 70% in 3 months – here’s why
Olectra Greentech, part of the MEIL Group and India's largest pure electric bus manufacturer, saw its shares jump 9% to hit a new all-time high of ₹2,048 apiece. The stock has gained 70% in the last three months and 327% in a year, delivering a return of 1019% in just three years.
Amidst the current surge in small-cap stocks, many have delivered astonishing returns, with Olectra Greentech emerging as one of them. Maintaining their upward trend, the company's shares in today's trade jumped another 9% to hit a new all-time high of ₹2,048 apiece.
Today's robust rally pushes the stock to gain 70% over the last three months and 327% in a year. Looking back, the stock delivered a whopping return of 1019% in just 3 years.
Olectra Greentech, part of the MEIL Group, is a small-cap stock with a market cap of ₹16,000 crore. The company is India’s largest pure electric bus manufacturer, having manufacturing facilities in Hyderabad, India. It is India’s first-ever electric bus manufacturer, having manufactured and deployed all variants of electric buses in India.
Positioned strategically, Olectra Greentech stands to reap substantial benefits from the burgeoning trend towards EV adoption. Bolstering this trajectory is the government's concerted efforts to bolster the EV ecosystem, including support for manufacturing and charging infrastructure.
A particular emphasis is being placed on increasing EV usage within public transport, as highlighted in the recent Interim Budget 2024-2025 by Finance Minister Nirmala Sitharaman.
Currently, electric buses constitute less than 10% of the total buses operational on Indian roads, a figure set to rise as state governments issue tenders for EV buses while many internal combustion engine (ICE) buses undergo replacement with electric counterparts.
Such ongoing shifts are expected to fuel a sustained increase in demand for electric buses, positioning Olectra Greentech favorably.
Further, the low operational and maintenance cost of electric buses is yet another catalyst for the rise in demand. The fuel cost contributes to approximately 40 to 50% of the ICE bus operations cost as the fuel price continues to rise; the public and private fleets are expected to transition to electric buses in a shorter time.
In recent times, the company has actively engaged in tender processes initiated by several state transport undertakings (STUs) such as BEST, TSRTC, and MSRTC, securing significant contracts along the way.
Recently, the company has secured contracts for 550 buses from the Telangana State Road Transport Corporation (TSRTC), 2,100 electric buses from the Brihanmumbai Electric Supply and Transport Undertaking (BEST), and 5,150 electric buses from the Maharashtra State Road Transport Corporation (MSRTC).
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. Earlier in February, the company unveiled a hydrogen bus in a technical partnership with Reliance. This bus serves as a carbon-free alternative to conventional public transportation.
Healthy performance in Q3
Looking at the company's financials, the company reported the highest-ever quarterly net profit of ₹27 crore in Q3FY24. During the same period last year, the company reported a net profit of ₹15 crore.
The revenue from operations during the quarter surged by 33.6% to ₹342 crore from ₹256 crore in Q3FY23. The e-bus division segment, which accounts for more than 80% of the revenues, recorded a growth of 23.14% to ₹282 crore, up from ₹229 crore, while the revenue from the Insulator division and e-truck division came in at ₹36 crore and ₹23.66 crore, respectively.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
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