Olectra Greentech Shares Slide 7% After Electric Bus Deal Faces Cancellation

Olectra Greentech 's stock price fell sharply on Tuesday morning after a big setback in its electric bus deal with the Maharashtra government.

At 9:18 AM, the company’s share price dropped 6.37% to Rs.1,259.60 on the Bombay Stock Exchange (BSE). This fall came after Transport Minister Pratap Baburao Sarnaik posted on X (formerly Twitter) that Olectra failed to deliver even a single bus by the revised deadline of May 22.

Because of this delay, he said the government should cancel the agreement with the company.

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The Electric Bus Contract at the Center of the Issue

In July 2023, the Maharashtra State Road Transport Corporation (MSRTC) gave a Rs.10,000 crore contract to a joint venture of Olectra Greentech and Evey Trans Pvt. Ltd. The deal included the supply, operation, and maintenance of 5,150 electric buses over 2 years.

Olectra was responsible for making and maintaining the buses. The company even called it the world’s largest electric bus order in its FY24 annual report. As of March 31, 2024, its total order book stood at 10,969 units.

Strong Financial Results in Q4 FY24

Despite the current controversy, Olectra reported good financial results on Monday:

Net profit jumped 39% year-on-year to Rs.20.69 crore

Revenue increased 55% to Rs.448.92 crore

The company also recommended a final dividend of Rs.0.40 per share for FY25 (subject to approval)

Investors Still Worried

Even with strong Q4 results, investors are concerned. The minister’s statement and delivery delays raised fresh doubts about the company’s future performance.

Although Olectra’s shares have given massive returns of over 2,250% in the last 5 years, they have dropped nearly 25% in the past year.

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