Shares of this electric bus maker have surged 540% in the last 12 months

• Olectra Greentech is the largest electric bus maker in India.
  
• It is a Hyderabad-based company and had recently announced setting up a massive 150-acre manufacturing facility to fulfill its growing order book.
  
• Over the next year, the company says it plans to start manufacturing electric trucks, in addition to three-wheelers and buses.
  

Hyderabad-based Olectra Greentech has quietly made its shareholders rich over the past year. An investment of ₹10,000 in the company exactly 12 months ago is now worth ₹67,000, which is a handsome return regardless of any other factor.

Shares of Olectra Greentech were marginally up today (January 4) as of 12:30 p.m.

What does Olectra Greentech do?

Olectra Greentech is the largest manufacturer of electric buses in India, with a market share of around 40%. It has been making electric buses in partnership with BYD, China’s largest electric vehicle maker.

In December 2020, the company announced that it is setting up a massive electric vehicle manufacturing plant on the outskirts of Hyderabad, with an initial outlay of ₹600 crore and a capacity of 10,000 units. The plant will be set up on a sprawling 150-acre land.

At the time of the announcement, Olectra also revealed that it is currently in the process of fulfilling orders for 2,000 electric buses, which is worth ₹3,000-3,500 crore.

Why is Olectra Greentech’s share price surging?

Electric vehicles are the buzzword today, and there’s more than one reason for this. For the government, it’s about reducing the reliance on crude oil imports and pollution, and for the common man, it’s about reducing the impact of perennially rising petrol and diesel prices.

As an investor, this presents a great opportunity to bet on stocks and companies which are into innovative battery technologies, or supply components for electric vehicles. We have seen a few companies like Sona Comstar make a blockbuster debut on the stock exchanges, making the most of the IPO boom and the growing interest in electric vehicles.

But more than the idea of electric vehicles, Olectra Greentech’s strong fundamentals have played a big role in the company’s shares delivering multifold returns in the past year.

Here’s how the company’s financials look like over the past five years:


Source: Company reports

What does the future hold for Olectra Greentech?

At the moment, Olectra’s chairman KV Pradeep says that the company has submitted bids for tenders for 6,000 more buses. Just yesterday, the company announced that it has won a bid for supplying 50 electric buses to a government transport authority.

But the company is also looking beyond just electric buses – it has teamed up with a truck maker to develop electric trucks, with plans to start manufacturing them in 2022-23.

Pradeep also mentions that the company is not reliant on BYD for technology anymore, thanks to an in-house research and development department.

The new 150-acre manufacturing facility will be used for manufacturing electric buses, trucks and three-wheelers, the company said.

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