Shares of Olectra Greentech Ltd rose sharply in Tuesday's trading session. The stock surged 8.80 per cent to hit a day high of Rs 1,891.85. It was last seen trading 6.45 per cent up at Rs 1,851. At this price, the scrip has gained 47.48 per cent in the last six months.
Domestic brokerage Geojit has given a 'Buy' call on the counter with a 12-month target price of Rs 2,086. "Q4 FY24 revenue de-grew by 23 per cent (YoY) owing to new battery norms and delays in execution owing to pending government approvals. Margin contracted by –137 basis points (bps) owing to lower operating leverage and an increase in other expenses. However, for the full year, the margin expanded by 127 bps and came at 14.2 per cent," the brokerage stated.
"The company has bagged some of the biggest orders from various STUs in India in the last financial year, which include 550 buses from Telangana State Road Transport Corporation (TSTRC), 2,100 electric buses from Brihanmumbai Electric Supply and Transport Undertaking (BEST), and 5,150 electric buses from Maharashtra State Corporation (MSRTC). The first OEM in the country to achieve a milestone of 10,000+ electric bus orders, homologated and completed AIS 038 certification for all bus models for the batteries. Currently, the company holds 27 per cent of the market share in this segment," it added.
With the formation of a JV with BYD (Build Your Design) China (BYD is the largest EV manufacturer in the world), and after leading in the commercial run of electric buses, Geojit said the company is expanding its product line in the e-mobility segment for 3-wheeler electric autos and electric truck tippers.
"The surge in demand for electric tippers is expected to grow going forward, as the success story of the E-bus is likely to create impetus for E-trucks. The technical partnership between Olectra and Reliance Industries Ltd (RIL) on the Hydrogen Bus project will open the Indian market to a cutting-edge transportation system. The system, which consists of Type-4 hydrogen cylinders installed on the top of the bus, successfully extended the cooperation agreement with BYD until December 31, 2030," it further stated.
"There are a few more tenders in the pipeline in which the company has participated in the bidding and is hoping to bag more of such orders. Olectra currently holds 10,966 electric bus orders, with the same to be delivered in the next 12-24 months," Geojit also said.
Given the strong order book, capacity expansion, and scalability of multiple powertrains, we upgraded our rating from 'Accumulate' to 'Buy' with a target price of Rs 2,086 per share, Geojit underscored.
Olectra is a subsidiary of Megha Engineering and Infrastructures Ltd (MEIL) and manufactures electric buses in India. It is also the country's largest silicone rubber/composite insulators manufacturer for power transmission and distribution networks.