Future growth expectations in earnings/operating earnings/profits/EPS?

The management expects to beat their numbers with excellent top line and bottom line for FY 2024-25. Target production is about 2,000 electric buses in FY25, with 5,000 buses expected next year and 10,000 buses the following year, indicating significant revenue growth potential. EBITDA for FY23-24 was INR 185.5 crores (20% growth YoY), and PAT increased by 18% to INR 78.7 crores, showing improving profitability. Operating margins remain positive despite Q4 supply chain constraints, and the company expects healthy operating margins going forward due to cost-plus pricing models and expecte

Current/ Expected Orderbook/ Pending Orders?

The current net order book of Olectra Greentech Limited stands at approximately 10,969 electric buses after delivering around 500 buses in FY24. The total order book mentioned is about 11,000 buses. They have secured the world's largest e-bus order of 5,150 buses from MSRTC and 3,000 electric buses order from BEST Mumbai. There is also a 2400 BEST order with a 25% variation clause, allowing a potential to produce an additional 600 buses after completing the base 2400. The company aims to deliver about 2,000 to 2,500 buses in FY25 and plans to ramp up production capacity to 5,000 buses by end o

Any current/future capex/capital investment/strategic investment?

Olectra Greentech plans a total capex of around INR 700 crores. INR 500 crores of this capex will be funded through term loans; the remaining INR 200 crores from internal accruals. Current capex focuses on expanding the new plant capacity at Seetharampur to cater to 10,000 buses by year two. Additional rebalancing equipment costing about INR 100 crores may be needed to increase capacity to 10,000 units. The company is acquiring 150 acres of land in Hyderabad to build one of the world’s largest EV bus manufacturing facilities. By the end of the year, capacity is expected to reach 5,000 buses wi

Any current/future new fundraising through debt or equity?

Olectra Greentech plans to raise debt through a term loan of approximately INR 500 crores for capital expenditure related to capacity expansion. The company has received sanctions from commercial banks and is in the process of documentation with a planned drawdown in 2-3 weeks. There are currently no plans to raise equity capital as of now. Total planned capex is about INR 700 crores, with INR 500 crores coming from term debt and the balance INR 200 crores from internal accruals. The focus is currently on building the capacity at the new plant; any future plant expansions or additional

Future growth expectations in sales/revenue/volumes?

FY 2025: Targeting production of approximately 2,000+ electric buses. Gradual capacity ramp-up planned, starting with about 200 units in Q1, doubling in Q2, and significant increases in Q3 and Q4. New plant trial production started in February 2024; partial production underway with plans to reach 5,000 units capacity by end of FY 2025 and 10,000 units by following year. Post Q1, production expected to improve substantially, with the aim to surpass earlier numbers historically from FY 2025-26 onwards. Order book remains strong with about 11,000 buses, including large orders from MSRTC and BEST

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Olectra Greentech LtdQ1 FY24Automobiles

Olectra Greentech Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,520P/E: 71.0Market Cap: ₹10.2K CrSector: Automobiles

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→FY 2025: Targeting production of approximately 2,000+ electric buses.
→Gradual capacity ramp-up planned, starting with about 200 units in Q1, doubling in Q2, and significant increases in Q3 and Q4.
→New plant trial production started in February 2024; partial production underway with plans to reach 5,000 units capacity by end of FY 2025 and 10,000 units by following year.
→Post Q1, production expected to improve substantially, with the aim to surpass earlier numbers historically from FY 2025-26 onwards.
→Order book remains strong with about 11,000 buses, including large orders from MSRTC and BEST Mumbai.
→Focus on overcoming past supply chain issues and smoothly transitioning operations to the new plant.
→No new product lines like hydrogen buses or three-wheelers are planned for FY 2025; emphasis on fulfilling current EV bus orders.
→Olectra aims to beat revenue and profit targets in FY 2024-25 with stakeholders' support.

Margin guidance

Category 3

→The management expects to beat their numbers with excellent top line and bottom line for FY 2024-25.
→Target production is about 2,000 electric buses in FY25, with 5,000 buses expected next year and 10,000 buses the following year, indicating significant revenue growth potential.
→EBITDA for FY23-24 was INR 185.5 crores (20% growth YoY), and PAT increased by 18% to INR 78.7 crores, showing improving profitability.
→Operating margins remain positive despite Q4 supply chain constraints, and the company expects healthy operating margins going forward due to cost-plus pricing models and expected battery price declines.
→Ramp-up of new plant production expected to enhance capacity and efficiency, supporting earnings growth.
→Olectra anticipates continued strong demand with a net order book of approximately 10,969 buses, which will drive future revenue and earnings.
→Dividend recommended at 10%, reflecting confidence in sustained profitability.

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Fundraise plans

Yes

→Olectra Greentech plans to raise debt through a term loan of approximately INR 500 crores for capital expenditure related to capacity expansion.
→The company has received sanctions from commercial banks and is in the process of documentation with a planned drawdown in 2-3 weeks.
→There are currently no plans to raise equity capital as of now.
→Total planned capex is about INR 700 crores, with INR 500 crores coming from term debt and the balance INR 200 crores from internal accruals.
→The focus is currently on building the capacity at the new plant; any future plant expansions or additional capex plans will be deliberated internally and announced appropriately.

Order book

→The current net order book of Olectra Greentech Limited stands at approximately 10,969 electric buses after delivering around 500 buses in FY24.
→The total order book mentioned is about 11,000 buses.
→They have secured the world's largest e-bus order of 5,150 buses from MSRTC and 3,000 electric buses order from BEST Mumbai.
→There is also a 2400 BEST order with a 25% variation clause, allowing a potential to produce an additional 600 buses after completing the base 2400.
→The company aims to deliver about 2,000 to 2,500 buses in FY25 and plans to ramp up production capacity to 5,000 buses by end of FY25, with a target of 10,000 buses in the following year.
→For e-Tippers, there are 41 orders on hand, with 51 units delivered till date.

Capex plans

Yes

→Olectra Greentech plans a total capex of around INR 700 crores.
→INR 500 crores of this capex will be funded through term loans; the remaining INR 200 crores from internal accruals.
→Current capex focuses on expanding the new plant capacity at Seetharampur to cater to 10,000 buses by year two.
→Additional rebalancing equipment costing about INR 100 crores may be needed to increase capacity to 10,000 units.
→The company is acquiring 150 acres of land in Hyderabad to build one of the world’s largest EV bus manufacturing facilities.
→By the end of the year, capacity is expected to reach 5,000 buses with plans to ramp up to 10,000 over the following year.
→Management is internally deliberating on potential future capex and expanding production capacity beyond 10,000 units, possibly involving plants outside the state.

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