Original Post | Q3FY25 | Q1FY25 Update | Q4FY24 Update | Q3FY24 Update
I’ve been covering Olectra Greentech for quite some time now. There are not many pure play listed EV players in India, and Olectra gives you exposure to the electric bus market — which is rapidly expanding with the Government quite serious when it comes to the electrification of diesel buses launching schemes like PM e-Bus Sewa / PM E-DRIVE.
The reason I’ve been closely following Olectra is because it has an order book of >10,000 e-buses (for quite some time now) valued at INR 15,000 Cr, which is more than the company’s current market capitalization of INR 12,500 Cr.
So, there’s potential. But execution, is where Olectra falls behind.
Promises made
Let’s look at some of the promises that the company made in the past and let’s compare that with what they actually achieved.
FY25 e-bus delivery target — initial estimate was to sell between 1,500 - 2,000 e-buses, which was lowered to 1,200 e-buses.
FY26 e-bus delivery target — initial estimate was to deliver 5,000 e-buses in FY26, which was revised to 2,500 e-bus deliveries. Wow.
Capacity expansion — initial estimate was to achieve capacity to produce 5,000 e-buses in a year by the end of FY25. This was further delayed to Q1FY26.
MSRTC Order — In July 2023, Olectra won an order from MSRTC to supply 5,150 e-buses to Evey Trans Private Limited (a sister company) which would be delivered to MSRTC by July 2025. The value of this order was INR 10,000 Cr (i.e. 1 e-bus = approx. 2Cr).
The Reality
FY25 e-bus delivery — actual e-buses delivered in FY25 were 972. A shortfall of 228 e-buses from the revised estimate.
FY26 e-bus delivery — In Q1FY26, the forecast for FY26 has been further reduced to 2,000 e-buses. That’s a 60% drop from the initial estimate of 5,000 e-bus deliveries in FY26. I’m flabbergasted.
Capacity expansion — In Q1FY26, management has committed that it will reach a capacity of 5,000 e-buses by the end of FY26. A delay of more than a year compared to original estimates. And I wouldn’t be surprised if this revised target is missed as well.
MSRTC Order — till date, only 220 e-buses have been delivered to MSRTC, which prompted Pratap Sarnaik — Maharashtra’s Transport Minister — to declare on X that they would be cancelling this order since the delivery timelines were not met. Olectra, however confirmed that this order is NOT cancelled (yet).
In Q1FY25, a penalty of INR 2.2 Cr was slapped on Olectra due to non-delivery of e-buses. Wouldn’t be surprised if such penalties are levied in the future too.
Estimates in Q1FY26
The company was able to sell only 161 e-buses in Q1FY26, and expects to meet the target of 2,000 e-buses in the balance 3Qs. Seeing the abysmal forecasting abilities of the management, I’m pretty sure this target will be downgraded to 1,500 e-buses in the future and the actual numbers achieved would be <1,500.
There’s no substantial change in the order book, which stands at 10,193 e-buses as at 30th June 2025. The management is very confident that they will exhaust this order book in the next 2 years. Looks very unlikely if you ask me, since the capacity expansion to produce 5,000 e-buses per year, will happen only by the end of FY26.
When questioned by analysts on missed revenue estimates, the management has mentioned that the entire industry is facing a supply chain issue with respect to battery components / chassis and dependence on China. The whole point of the leadership team, is to forecast such events and mitigate risks in advance.
Olectra wants to be #1 player in the e-bus segment, it is currently #2.
Some silver linings
That said, not everything is dark and gloomy. Olectra is in the process of appointing a new CEO very soon, and I am hoping that the new CEO can run a tighter ship. I would suggest the company to hire a solid FP&A Director, who knows how to read the market trends and generate more accurate forecasts!
Olectra unveiled a new blade battery technology at Bharat Mobility Global Expo 2025 — which would increase bus mileage by 30% and reduce battery weight by 30%. These batteries would be supplied by BYD, Olectra’s technology partner.
Battery prices are coming down, which should bring down the cost of e-buses, leading to volume growth for the whole industry. Olectra is working on localization of components and working on other battery technologies to de-risk itself from BYD in the long term.
Conclusion
Olectra’s share price sums up the current investor sentiment. In the past 1Y, the stock has been flat — a direct function of missed estimates.
At a market capitalization of INR 12,500 Cr at a P/E of 88 times, I think the company is over-valued, given the execution risks. I wouldn’t pay a premium for a management that consistently fails to meet it’s revised estimates.
It raises a very serious question — does the management not have the financial acumen and industry insights to forecast how demand / supply is going to move? How can revenue estimates drop by 60%? How can the management NOT know when capacity will go live?
I’m sitting on the sidelines, unless the stock corrects by 40-50% from current levels, at which point I see limited downside. The industry tailwinds are there, but the million dollar question is — can Olectra execute + capitalize on this growth?
For my subscribers, I have partnered with Finology to get you a one month free subscription to Finology Ticker. Follow the steps listed in the Google Form [Form Link].
[Note: The author is not a SEBI registered investment advisor and the contents of this article do NOT constitute investment advice. Always do your own research before you invest in a company]
Amazing overview and insights into the working of this co.
Thanks