Olectra Greentech shares extend gains, zoom 20% today to hit fresh 52-week high; here's why

Shares Olectra Greentech Ltd extended their sharp gains for the second consecutive session on Friday. The stock today jumped 19.61 per cent to hit a new 52-week high of Rs 1,247.85 over its previous close of Rs 1,043.30. The multibagger scrip has gained 138.59 per cent in 2023 so far. Today's sharp upward move in the share price came after the company bagged an order for supply of 5,150 electric buses valued at around Rs 10,000 crore.

"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 exchnage filing.

"EVEY shall procure these buses from Olectra Greentech and which shall be delivered over a period of 24 months. Value of these 5,150 electric buses supply would be approximately Rs 10,000 crore for Olectra. Maintenance of these buses shall also be undertaken by the Olectra during the contract period," it added.

Technical analysts largely felt that the stock looked 'bullish'.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "The stock, post its breakout above Rs 720 levels, has seen a strong rally with strong momentum on its side. It is hovering in uncharted territory, with strong support placed around the Rs 990-1000 zone in the short term, which should provide a cushion to any near-term blip. Considering the ongoing trend, the stock is expected to continue its upward journey in the near period."

Ravi Singh, Vice-President and Head of Research at Share India, said "Olectra Greentech is showing a good rally after a brief consolidation in past months. The price movement in the counter is well supported by robust volumes."

AR Ramachandran from Tips2trades said, "The stock is bullish but also very overbought on the daily charts. A daily close below support of Rs 958 could lead to Rs 853 in the near term."

VLA Ambala, Research Analyst at Stock Market Today, said, "In June, the stock has broken its previous (strong resistance) which was at Rs 830 and currently it is still showing good signs of profitability and efficiency. With trailing stop loss at Rs 910, one can hold it for targets between Rs 1,200 and Rs 1,240. At present, it is in overbought zone. So, be ready for an averaging too in case of a pull back. The expected range for this will be Rs 1,020 to Rs 970."

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 slipped into the red in today's deals after touching their new all-time high levels in early trade.

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