A small-cap multibagger stock that doubled investor’s money in merely three months, soared 14.35 percent after it bagged an order that is worth more than its market capitalization. The company’s share price increased by 114 percent in the past three months. In fact, it gained 42 percent in just the past five days!
Shares of Olectra Greentech reached a record high of ₹ 1,408.70 apiece on Monday. At 11:35 AM, its shares were trading at ₹ 1,370 apiece, up 11.21 percent.
Before it received the order, Olectra Greentech had a market capitalization of ₹ 9,304 crores. It is primarily engaged in the manufacturing of composite polymer insulators and electrical buses. It operates more than 1000 buses commercially in India. Earlier this year, it unveiled a hydrogen bus in technical partnership with Reliance Industries.
According to an exchange filing, a consortium of Olectra Greentech and Evey Trans Private Ltd received an order for manufacturing 5,150 electric buses and allied electrical and civil infrastructure from the Maharashtra State Road Transport Corporation (MSRTC), on a gross cost contract basis/ OPEX model basis for a period of 12 years.
Evey shall procure these buses from Olectra Greentech and deliver them over a period of 24 months. Olectra Greentech will also undertake the maintenance of these buses during the entire contract period.
Currently, Olectra Greentech has a market capitalization of ₹ 10,112 crores and is a small-cap company. It has a low return on equity of 8.11 percent but an ideal debt-to-equity ratio of 0.16. Its shares were trading at a price-to-earnings ratio (P/E) of 154.19, which is substantially higher than the industry P/E of 28.30, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 50.02 percent stake in it, followed by retail investors with 40.85 percent, foreign institutions with 9.03 percent, mutual funds with 0.06 percent and other domestic institutions with 0.04 percent.
In the past three years, the company’s share price increased by a massive 2132.49 percent to deliver multibagger returns. If an investor had invested ₹ 1 lakh in the company’s shares three years ago, the value of their holdings would have been ₹ 22.32 lakhs today!
Written by Simran Bafna
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