Olectra Greentech shares extend gains to trade above Rs 700 mark; should you buy, sell or hold?

Shares of Olectra Greentech Ltd extended their gains for the third straight session in Thursday's trade. The stock today rose 1.92 per cent to hit a day high of Rs 712.25 over its previous close of Rs 698.85. At today's high price of Rs 712.25, the scrip traded 4.20 per cent lower from its 52-week high of Rs 743.50, a level seen on March 10, 2023. Yet, it has surged 90.26 per cent from its one-year low of Rs 374.35, hit on February 23 this year). On a year-to-date (YTD, basis, the stock has gained 35.80 per cent.

Last week, the Supreme Court dismissed a plea by Tata Motors challenging a decision by the Brihanmumbai Electric Supply and Transport (BEST), Mumbai's civic transport body, to disqualify it from a 2022 tender for 2,100 electric buses. The appeal alleged BEST had favoured rival Evey Trans, the operational arm of e-bus maker Olectra Greentech.

Olectra reported a 114.25 per cent jump (sequentially) in its net profit for the March 2023 quarter (Q4 FY23), at Rs 27.81 crore, as compared to Rs 12.98 crore in Q3 FY23. Earlier in March, the stock witnessed a massive spike after the company unveiled its hydrogen bus in partnership with Reliance Industries (RIL).

On the technical setup, support on the counter could be seen at around Rs 655 levels, analysts said.

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has tough resistance near Rs 735 zone which needs to be breached decisively to anticipate a further rise. The near-term support zone is around Rs 655 levels. The overall trend is maintained positive till the levels of Rs 655-660 are maintained."

Ganesh Dongre, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The stock has given a 30 per cent return to traders in less than three months period. MACD (Moving Average Convergence/Divergence indicator) is already in the overbought zone. So, traders can book profit and wait for a correction to re-enter at lower levels."

AR Ramachandran from Tips2trades said, "Olectra Greentech is in a sideways trend on the daily charts with strong support at Rs 656. A daily close above resistance of 726 could lead to Rs 760-795 in the near term."

The stock was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day RSI came at 65.90. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 81.13. It has a price-to-book (P/B) value of 6.76.

Olectra has a one-year beta of 0.66, 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 fell in today's deals ahead of monthly futures and options (F&O) expiry. The domestic indices were trading in the red, dragged by technology, metal and state-owned lenders.

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