Olectra Greentech shares rise 13% on strong June quarter earnings, up 720% in 5 years

Olectra Greentech shares jumped 13% today, climbing to ₹1,742 per share, as investors responded positively to the company's strong June quarter results, which were disclosed after market hours on Monday.

The company saw its consolidated revenue from operations grow by 45.37% year-on-year (YoY) to ₹314 crore. EBITDA also increased by 10% YoY, reaching ₹44 crore, with an EBITDA margin of 14%. Net profit after tax rose to ₹24 crore, marking a 33% increase from ₹18 crore in the same quarter last year.

A small-cap firm with a market capitalisation of ₹13,788 crore, Olectra Greentech is part of the MEIL Group and stands as India's largest manufacturer of pure electric buses. Headquartered in Hyderabad, the company is recognized as the country’s pioneer in electric bus manufacturing, offering a comprehensive range of electric bus models.

Over the last three years, the stock has gained 436%, and in the last five years, it has yielded returns of 720%. 

With state governments progressively embracing green vehicles for public transportation, Olectra Greentech has been actively engaged in bidding processes initiated by various state transport undertakings (STUs).

Order flow

In March, the company secured a ₹15.14 crore order from the Assam State Transport Corporation for 10 electric buses. It has also recently won significant contracts, including 550 buses for the Telangana State Road Transport Corporation (TSRTC), 2,100 buses for the Brihanmumbai Electric Supply and Transport Undertaking (BEST), and 5,150 buses for the Maharashtra State Road Transport Corporation (MSRTC).

Olectra continues to participate in several ongoing tenders and hopes to secure more orders. The Indian government's focus on expanding the EV ecosystem by supporting manufacturing and charging infrastructure is expected to bolster the industry further.

Currently, electric buses represent less than 10% of the total bus fleet operating on Indian roads, highlighting the significant growth potential in this sector.

Olectra Greentech's Insulator division, which contributes 12% to the company's revenue, is positioned for growth amid a favorable market environment. India's electric insulator market, valued at $379.8 million in 2022, is projected to reach $557.4 million by 2028, growing at a CAGR of 6.6% during 2023–2028. 

This expansion is driven by rapid urbanisation, which has increased the demand for heating, ventilation, and air conditioning (HVAC) systems, as well as the growing industrial sector, which has led to higher electricity consumption.

The privatisation of the electricity distribution sector and the subsequent expansion of transmission and distribution (T&D) infrastructure have further boosted the market. As insulators are a critical component of these networks, their increased demand is creating a positive outlook for Olectra's Insulator division, positioning it in a sweet spot for future growth.

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