Stock of this electric bus manufacture has zoomed 68% in 10 trading days

In the past three trading days,Olectra Greentech has rallied 24% after EVEY received two Letter of Awards from the Telangana State Road Transport Corporation for 550 Electric Buses

Shares of Olectra Greentech continued their upward movement, surging 15 per cent to Rs 647.95 on the BSE in Thursday's intra-day trade, in an otherwise weak market on the back of positive corporate announcements. In comparison, the S&P BSE Sensex was down 0.50 per cent at 60,053 at 01:07 PM.

In the past three trading days, it has rallied 24 per cent after the company said Evey Trans Private Limited (EVEY) received two Letter of Awards (LOAs) from the Telangana State Road Transport Corporation (TSRTC) for 550 Electric Buses consisting of 500 buses for intra-city and 50 buses for Inter-city operations, respectively.

These orders for supply of 500 Electric Buses and 50 Electric Buses are to be on Gross Cost Contract (GCC) / OPEX model basis for a period of 12 years and 10 years (Contract Period) respectively. EVEY shall procure these buses from Olectra Greentech which shall be delivered over a period of 16 months.

Olectra Greentech, part of the Megha Engineering & Infrastructures (MEIL) Group, is a pioneer in manufacturing electric buses in India. It is also India’s largest silicone rubber/composite insulators manufacturer for power transmission and distribution networks. EVEY is wholly owned subsidiary of Promoters (MEIL Holdings Limited).

Meanwhile, in the past 10 trading days, the stock price of Olectra Greentech has zoomed 68 per cent after the company unveiled its first Hydrogen-powered bus in technical partnership with Reliance Industries (RIL).

The company, on February 23, said the 12-metre low-floor bus has a seating capacity of 32 to 49 seats for passengers and one driver seat. A single hydrogen fill allows the bus to travel up to 400 km. Its commercial launch is expected within a year.

On March 1, Olectra announced that India’s first 6x4 heavy-duty electric tipper from its stable received India’s first homologation certificate from the Indian automobile regulatory agencies. The electric tipper is now roadworthy, adhering to all the Central Motor Vehicles Rules, the company said.

According to Olectra, public and private transport fleets are expected early adoption of Electric Buses due to continuous increase in diesel prices. Diesel cost contributes to 40 to 50 per cent of cost per kilometer; hence price increase in diesel will impact very high in the operations.

NITI Aayog mandated Convergence Energy Services Limited (CESL) for an additional procurement of 50,000 Electric buses in the next few years. This number is less than 10 per cent of total buses running in India. The State Transport Undertakings (STUs) apart from operating city buses are also interested in intercity operations. Similarly, the private operators, mufassil operators, school bus operators, airport transfers and pilgrim/tourist operators etc., are interested in adopting electric vehicles (EVs). This is expected to propel huge demand for EVs in the coming years, the company said in its FY22 annual report.

However, in the past one year, the stock has underperformed the market, by gaining 2 per cent, against a 10 per cent rally in the benchmark index. It had hit a record high of Rs 940 on December 16, 2021.