Olectra Greentech Stock Surges 7% After Winning Bid for 327 Electric Buses – Should You Buy?

Shares of Olectra Greentech, an electric bus manufacturer, surged nearly 7% on Tuesday, October 8, reaching ₹1663.45 per share. This rise came after reports that the company placed the lowest bid to supply 327 electric buses to the Himachal Road Transport Corporation (HRTC), according to ANI. The stock’s increase ended a three-day losing streak.

HRTC had issued a bid for 327 electric buses (297 of 9 meters and 30 of 12 meters) to boost green transportation in Himachal Pradesh. After evaluating the bids, Olectra and Switch Mobility met the technical requirements, and Olectra submitted the lowest bid. HRTC is expected to finalize the order soon. However, the Bombay Stock Exchange (BSE) has requested clarification from Olectra on these reports.

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Increasing Green Mobility

As more state governments focus on adopting green vehicles for public transport, Olectra Greentech has been actively bidding for contracts. As of March 31, 2024, the company’s order book for electric buses stood at 10,969 units, with more tenders expected in the future. By the end of FY24, Olectra had 1,695 e-buses operating on Indian roads, collectively covering over 10 million kilometers each month.

In September, the Union Cabinet approved the “PM-eBus Sewa-Payment Security Mechanism (PSM)” scheme, allocating ₹3,435.33 crore to help Public Transport Authorities (PTAs) buy and operate electric buses. The plan aims to deploy over 38,000 e-buses from FY 2024-25 to FY 2028-29.

Growth in the E-Bus Market

The Indian electric bus market saw strong growth in FY24, with a 75% increase in sales—3,516 e-buses sold compared to 2,006 the previous year. Olectra has been a key player in this growth. According to P&S Market Research, the electric bus market in India, which generated $282.7 million in revenue in 2023, is expected to grow at a rate of 18.2% per year, reaching $905.4 million by 2030.

State Transport Undertakings (STUs) will need around 370,000 buses by 2030, including plans to replace 35,000 older diesel buses with greener alternatives. Olectra is in a strong position to benefit from this shift.

In Q1 FY25, Olectra’s revenue from operations increased by 45.37% year-on-year to ₹314 crore, and its net profit after tax rose 33% to ₹24 crore, compared to ₹18 crore in the same quarter last year.