Olectra Greentech vs JBM Auto: The electric vehicle segment is fast growing in India with multiple organizations from educational institutions to state transport corporations spending heavily on making their fleet electric.

Unlike the passenger EV market, which is dominated by the likes of Tata Motors and Ola Electric, the electric buses segment is granular. In this article, we’ll conduct a comparative analysis of Olectra Greentech vs JBM Auto, two leading e-buses manufacturers.

Olectra Greentech Vs JBM Auto

We’ll begin our comparative study by reading about the businesses of both companies. Next, we’ll equip ourselves with the respective industry landscape. After that, we’ll race through the finances of both stocks to arrive at the future plans of the companies. Lastly, a summary concludes the article.

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Company Overview

While Olectra Greentech is an electric bus maker, JBM Auto is an auto ancillary company primarily. We’ll read more about the businesses in detail below.

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Olectra Greentech

Olectra Greentech Image

Olectra Greentech is a prominent manufacturer of electric buses in India. It was founded in 2000 and has grown over the years to have a production capacity of more than 1,500 vehicles every year.

It manufactures a wide range of electric buses and electric tippers with an estimated range from 150 km to 300 km. Its product portfolio includes ordinary as well as premium AC buses. The company sold a record 580 electric vehicles in FY23 against 259 in FY22 registering a sharp growth.

In addition to the EV business, Olectra Greentech also sells composite insulators for the transmission and distribution of power. These products find application in the power transmission & distribution industry and the railways industry.

Its majority 86.5% of its revenues in FY23 by selling electric buses. The balance of 11.4% and 2.1% came from the insulator division and e-truck division respectively. 

JBM Auto

Olectra Greentech vs JBM Auto - JBM Auto Logo

JBM Auto (also referred to as the JBM Group because of its multiple business lines) is a leading automobile and automotive components manufacturer in India with multiple business lines.

It is engaged in the production and sale of dies for sheet metal, metal forming systems, skin panels, chassis & suspension systems, pedal boxes, tubular products and safety-critical components & assemblies through its auto-ancillary and tool room divisions.

In addition to this, it also makes buses and electric buses. Furthermore, the automaker provides EV spare parts and charging station solutions making it a well-diversified player in the traditional automobile and the fast-growing EV segment.

It employs more than 9,000 people across its 17 production facilities for its three different business divisions. JBM earned a majority of 78.9% of its FY23 revenue from selling auto components while the balance of 14.2% and 6.9% came from its vehicles segment and tool room segment.

Industry Overview

Auto-ancillary industries and electric buses are two major segments in which the two companies we studied above operate. We’ll now read about them now.

Automobile Components Sector

With a 2.3% share, the automotive products sector is a major contributor to the GDP of India. The sector witnessed a sharp 23% growth in FY22 after two years of consecutive degrowth on account of weak demand for automobiles and the Covid-19 pandemic. 

India’s automobile components industry was valued at $ 56.5 billion in FY22. In the recent fiscal, demand from foreign original equipment manufacturers (OEMs), strong aftermarket sales, and higher realisations have helped auto-ancillary manufacturers to post record margins and volume numbers.

Its growth was estimated to be 12.5% in FY23 with multiple sub-segments such as electric vehicles recording a higher growth rate. Going forward, a variety of factors such as steady exports, optimum monsoons, the rise of EVs, higher disposable incomes, capital expenditure and more are expected to drive the auto-ancillary industry growth.

Electric Buses Sector

The penetration of e-buses in India stands at 4% against that of China and Europe at 26% and 6% respectively. Furthermore, the penetration across major markets is steadily increasing as governments around the world push for sustainable mass and public transportation.

India’s e-bus sector is the second largest in the world with a per annum manufacturing capacity of roughly 14,000 to 20,000 vehicles. The Union Cabinet has taken multiple measures as part of its FAME II scheme to promote the production, sale and adoption of electric buses in India. 

Along these lines, the Centre has earmarked Rs 57,613 crore towards the deployment of 10,000 electric vehicles. What’s more? The National e-Bus Programme (NEBP) has set up an audacious target to launch 50,000 e-buses across the nation. This, with the FAME III policy in future, will provide necessary demand for the country’s nascent e-bus industry.

Olectra Greentech Vs JBM Auto – Financials

Revenue and Net Profit Growth

Olectra Greentech earned a net profit of Rs 67 crore on the sales of Rs 1,091 crore in FY23. Its larger counterpart, JBM Auto clocked a profit after tax of Rs 125 crore on the sales of Rs 3,857 crore in FY23. As of the writing of this article, Olectra Greentech and JBM Auto had market capitalizations of Rs 10,175 crore and Rs 17,684 crore respectively.

While Olectra’s operating revenue increased five-fold on account of a lower base in the previous five fiscals, JBM Auto’s sales almost doubled during the same period. 

The table below highlights the revenue and net profit growth of Olectra Greentech Vs JBM Auto over the past five financial years.

Particulars / Fiscal Year20192020202120222023
Olectra Greentech - Revenue1702012815931,091
JBM Auto - Revenue2,2071,9471,9823,1933,857
Olectra Greentech - Net Profit-161483567
JBM Auto - Net Profit986949156125

(figures in Rs Cr)

Profit Margins

The operating profit margins and net profit margins of Olectra Greentech and JBM Auto stood at 10.8% & 10.32% and 5.9% & 3.24% respectively in FY23. The low-profit margins highlight margin pressure and low capacity utilization. However, it also tells us that both companies are in a good position to increase production numbers as they have capabilities in place.

The table below showcases the operating profit margins and net profit margins of Olectra Greentech and JBM Auto for the past few fiscal years.

Particulars / Fiscal Year20192020202120222023
Olectra Greentech - Operating Profit Margin- 8.9182.5137.17214.26510.8
JBM Auto - Operating Profit Margin11.672 11.82410.29810.74710.324
Olectra Greentech - Net Profit Margin- 9.296.752.875.965.9
JBM Auto - Net Profit Margin4.363.552.494.93.24

(figures in %)

Return Ratios

Olectra Greentech and JBM Auto reported a return on equity (RoE) of 8.00% and 12.99% and a return on capital employed of 13.3% and 11.86% in FY23 respectively. The figures were somewhat lower in the recent fiscal on account of expansion in capital base, interest charges and margin pressure.

Overall, both companies have demonstrated high return ratios in the last few years. The figures below highlight the RoE and RoCE of Olectra Greentech and JBM Auto respectively.

Particulars / Fiscal Year20192020202120222023
Olectra Greentech - RoE- 3.7421.134.668.0
JBM Auto - RoE18.110.246.819.0512.99
Olectra Greentech - RoCE- 1.414.222.447.7313.3
JBM Auto - RoCE17.1912.469.1813.6711.86

(figures in %)

Debt Analysis

Olectra Greentech has largely been a debt-free company until recently when it borrowed some funds for capacity expansion. Nevertheless, its debt-to-equity ratio is low at 0.2 against that of JBM’s at 1.63.

JBM Auto is a highly leveraged company and its debt levels have increased in the past few fiscals. Olectra Greentech and JBM Auto reported interest coverage ratios of 4.8 times and 2.35 times in FY23 respectively.

The table below showcases the debt/equity ratio and interest coverage ratio of JBM Auto and Olectra Grentech respectively.

Particulars / Fiscal Year20192020202120222023
Olectra Greentech - Debt/Equity0.040.030.010.090.2
JBM Auto - Debt/Equity1.210.89 1.111.531.63
Olectra Greentech - Interest Coverage - 0.472.242.456.644.8
JBM Auto - Interest Coverage3.52.672.413.472.35

Future Plans

We are almost at the end of our comparative study of Olectra Greentech vs. JBM Auto. Let us try to get some sense of what lies ahead for the company and its investors.

Olectra Greentech

  1. The company had orders on hand for 3,394 electric vehicles, offering revenue visibility for more than two years with its current production capacity of 1,500 units per year.
  2.  Olectra is currently in the process of developing a greenfield EV production plant which will take the expanded capacity to 5,000 units every year and is scalable up to 10,000 units every year.
  3. The management is targeting staff transport private market and TARMAC buses in airports as an opportunistic source of demand for its vehicles.

JBM Auto

  1. JBM Auto has bagged orders of roughly 5,000 electric buses from multiple state transport agencies such as Gujarat, Haryana, Delhi, etc. and private players for production and supply of vehicles.
  2. Similar to Olectra Greentech, JBM is also targeting the EV aviation market with its newly launched models in the 12-metre low-floor electric bus sub-segment.
  3. The company is also actively working towards developing a SaaS EV solutions platform for providing end-to-end operations and maintenance services for electric buses.

Olectra Greentech Vs JBM AutoKey Metrics

We are almost at the end of our comparative study of Olectra Greentech vs JBM Auto. Let us take a quick look at some of the key metrics of the stocks.

ParticularsOlectra GreentechJBM Auto
CMP ₹1,230.15₹1,494
Market Cap (Cr.)₹10,175₹17,702
EPS₹8₹10.9
Stock P/E150.6137.48
RoE8%12.99%
Book Value₹102₹87
Price to Book Value12.1216.67
Promoter Holding50.0%67.53%

Conclusion

As we conclude our comparative study of Olectra Greentech vs JBM Auto, we can say that although JBM Auto is more diversified and bigger than Olectra Greentech, it has high debt.

However, with the industry gearing for rapid growth in the years to come, the management may plan towards bringing down the debt-to-equity ratio.

The smaller peer, Olectra Greentech seems to have built a respectable presence in the e-bus space. However, there is always a threat from larger peers such as Ashok Leyland, Eicher Motors and Tata Motors.

In your opinion, which of the two is a better company? How about we continue this conversation in the comments below?

Written By Vikalp Mishra

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks also get updated with stock market news, and make well-informed investment decisions.


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