Multibagger Olectra Greentech shares halt 5-day losing run, climb 10% today

Shares of Olectra Greentech Ltd rose sharply on Monday, halting their five-day downward trend. The stock jumped 10 per cent to hit its upper price band of Rs 1,128.10. It eventually settled 9.48 per cent higher at Rs 1,122.80. The multibagger counter has surged over 157 in the last six months and 117 per cent in 2023 so far. The company today said, "We hereby inform you that, there is no deviation or variation in use of the proceeds of preferential issue during the quarter ended June 30, 2023."

The company's consolidated net profit came at Rs 18.08 crore in June quarter (Q1 FY24), up 8.72 per cent against Rs 16.63 crore in the year-ago period. However, revenue from operations slipped 23.14 per cent to Rs 216.02 crore in Q1 FY24 compared with Rs 281.07 crore in the corresponding period last year.

The sharp up move witnessed during this year came on the back of its partnership with Reliance Industries (RIL) for hydrogen bus and fetching meaningful orders.

In July, the company bagged an order worth Rs 10,000 crore to supply 5,150 electric buses. "Consortium of Olectra and EVEY has been awarded with a Letter of Intent from MSRTC relating to supply, operation and maintenance of 5,150 electric buses and allied Electrical and Civil Infrastructure on gross cost contract basis. This order for supply of 5,150 electric buses are to be on gross cost contract (GCC)/OPEX model basis for a period of 12 years (Contract Period) respectively," Olectra stated in an exchange filing.

In addition, Olectra said it awarded a contract to construct 150-acre greenfield electric vehicle manufacturing facility at Seetharampur, Hyderabad, Telangana to its holding company. The contract is worth around Rs 395.12 crore (inclusive of GST). Prior to this, it received an order for 550 electric buses from the Telangana State Road Transport Corporation (TSRTC).

Bourses BSE and NSE have put the securities of Olectra Greentech under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

On technical setup, the stock traded higher than the 5-day, 10-, 50-, 100-, 150- and 200-day simple moving averages (SMAs) but lower than the 20-day and 30-day moving averages. The counter's 14-day relative strength index (RSI) came at 50.17. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 119.25 against a price-to-book (P/B) value of 9.92.

The scrip has an average target price of Rs 738, Trendlyne data showed, suggesting a potential downside of 34 per cent. It has a one-year beta of 0.43, indicating low volatility on the counter.

The company is a subsidiary of Megha Engineering and Infrastructures Ltd (MEIL) and manufactures electric buses in India. Olectra is also India's largest silicone rubber/composite insulators manufacturer for power transmission and distribution networks.

Meanwhile, Indian equity benchmarks turned positive in fag-end trade today amid a highly volatile session, aided by technology and consumer good stocks. The 30-share BSE Sensex 79 points or 0.12 per cent to close at 65,401, while the broader NSE Nifty pack edged 6 points or 0.03 per cent to end the day at 19,435.

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