This electric vehicle company recently announced a technical partnership with Reliance Industries for its buses. After delivering multibagger returns in a span of merely six months, its share price tumbled 9 percent on Tuesday’s early trades as it announced its result for the April to June quarter of the current financial year (Q1FY24).
According to an exchange filing, Olectra Greentech’s consolidated net profit after tax declined by 72.99 percent to ₹ 18.07 crores in Q1FY24 as compared to ₹ 66.89 in the January to March quarter (Q4FY23). Its revenue from operations also witnessed an 80.20 percent fall to ₹ 216.20 crore in Q1FY24, when compared to ₹ 1,090.76 crores in the previous quarter (Q4FY23).
However, on a year-on-year basis, the company underwent margin expansion, as its profit increased by 8.33 percent to 18.07 crores in the latest quarter, as compared to ₹ 16.68 crores in the corresponding quarter last year (Q1FY23), while its revenue fell 23.14 percent to ₹ 216.02 crores in Q1FY24, as compared to ₹ 281.06 crores in Q1FY23.
Olectra Greentech is India’s first-ever electric bus manufacturer and has manufactured and deployed multiple variants of e-buses in India. It is also involved in the manufacturing of composite polymer insulators.
The Hyderabad-based company received a letter of intent for the supply, operation, and maintenance of 5,150 electric buses and electric civil infrastructure from the Maharashtra State Road Transportation Corporation. This order was worth a massive ₹ 10,000 crores, which was slightly higher than its market capitalization at that time!
Olectra Greentech’s share price rallied 214 percent in a span of five months to reach a record high of ₹ 1465.00 apiece and deliver multibagger returns. However, its shares fell to the current level of ₹ 1079.50 apiece, as of 01:17 PM on Tuesday. Despite the recent fall, the stock remains a multibagger in a span of six months, with 132 percent returns.
With a market capitalization of ₹ 9,328 crores, Olectra Greentech is a small-cap company. It has a low return on equity of 8.11 percent and an ideal debt-to-equity ratio of 0.16. Its shares were trading at a price-to-earnings ratio (P/E) of 142.24, which is significantly higher than the industry P/E of 28.30, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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