Introduction to Olectra Greentech Ltd
Olectra Greentech Ltd is one of India’s leading electric vehicle (EV) makers and the first electric buses in India. The company is part of electrical mobility that is changing public transport in the country. In this report, we will critically examine Olectra stock performance, technical analysis, advantages, disadvantages, and potential. If you also are an enthusiast for EV-related stocks, Olectra Greentech Ltd would be of great interest. The following is the company overview:
Company Overview
Olectra Greentech Ltd produces electric buses and composite polymer insulators. Government policy is being aggressively shifted toward cleaner modes of transportation; thus, Olectra stands in a good position to cash in on growing demand for EVs.
The company has had steady growth over time, particularly in recent years. But as is with any stock, there are also some strong points and weak points. Let’s discuss all of these factors in detail to paint a comprehensive picture.
DISCLAIMER: Our post is only for educational purpose only. Not an investment advice. Consult your financial advisor before investing.
Technical Analysis of Olectra Greentech Ltd Stock
Now let’s look at the technical chart of Olectra Greentech Ltd and try to understand what it has to say about the present condition of the stock and how it is likely to do in the future.
- Current Price: The stock is trading at ₹1571.60.
- Trendline Resistance: The stock is facing a downtrend resistance line. To move higher, it needs to break this trendline.
- Key Resistance Levels:
- R1: ₹1630.10
- R2: ₹1744.90
- R3: ₹1865.74
If the stock breaks these resistance levels, the next major target to watch is ₹2180.
- Support Levels:
- The stock can come in at retracement support between ₹1480 and ₹1505.
- If the price drops further, critical support is between ₹1350 and ₹1380.
- Volume: There is quite a recent spurt in volume, which indicates some interest in the stock now.
Conclusion of Technical Analysis: If Olectra breaks the ₹1630 level and holds, we could see an upward trend towards ₹1745 or ₹1865. But if it retraces, watch out for the support near ₹1480-1505.
Pros of Investing in Olectra Greentech Ltd
- Strong Profit Growth:
Olectra has enjoyed a CAGR profit growth of 46.6% over the last 5 years. That is, it has maintained profits increasing steadily over the years. That’s something most investors look forward to. - Positive Future Outlook:
Analysts expect the company to have a good quarter. The EV market is growing, and with government support for electric vehicles, the company is all set to ride on those trends. - Leader in Electric Mobility:
One of the electric bus pioneers in India, Olectra, stands quite strong in its domestic market. Electric buses in cities are witnessing rising demand and Olectra can perfectly fill that requirement.
Cons of Investing in Olectra Greentech Ltd
- High Valuation:
The stock is trading at 13.1 times its book value, which makes it relatively expensive compared to some peers. Investors should be cautious about this high valuation. - Low Return on Equity (ROE):
The company’s ROE is 7.34% over the past 3 years. This indicates that the company is not generating very high returns on its equity capital. - High Debtor Days:
Olectra has a high debtor’s days at 162 years, implying that the company tends to take longer to raise money from customers. Therefore, cash flow problems. - Cost of Borrowing:
Generally, the cost of borrowings of the company also appears to be high and is going to affect profit. Debt levels increase.
Business Details and Growth Potential
1. Growing Electric Vehicle Market
India is turning out to be the fastest-growing market for Electric vehicles. The policies undertaken by the government and favorable approach towards cleaner energy support such companies as Olectra Greentech Ltd., which are specifically designing and selling electric buses to large and medium-sized cities across tier-2 and metro regions.
2. Partnerships and Contracts
Olectra has received several orders to supply electric buses to state governments and private transport operators. These will generate revenues for the company in the next years.
3. Technology Advancements
Olectra continues to work towards developing better battery technology and making its buses efficient. This kind of improvement gives Olectra an edge over other companies.
4. Government Initiatives
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) and state-level subsidies for electric buses programs are helping companies like Olectra to support the adoption of electric buses.
Key Takeaways for Investors
- Short-term Potential: If it bounces off the ₹1630 level and breaks out, it may be seen targeting ₹1745 and ₹1865 levels.
- Long-term Growth: The electric mobility thrust, consistent profit growth, and strategic contracts bode well for this company in the long term.
- Risk Factors: Points of concern include high valuation, low ROE, and debtor days. All these points must be kept in mind before the decision to invest.
Conclusion
Olectra Greentech Ltd is a potential stock in the electric vehicle industry. It has the scope to grow further in a great way as the government makes India adopt electric mobility, but its current valuations and operational difficulties must be considered.
If you are looking for a stock that has the future growth and electric vehicle revolution, Olectra Greentech Ltd could be a good candidate. Always do your own research and consider consulting a financial advisor before investing.
FAQs about Olectra Greentech Ltd
Q: What is the current trading price of Olectra Greentech Ltd.?
A: The trading price is at ₹1571.60.
Q: Which are the primary resistance levels?
A: The primary resistance levels at ₹1630.10, ₹1744.90, and ₹1865.74.
Q: What are the support levels for the stock?
A: The support level is from ₹1480-1505 and ₹1350-1380.
Q: Is Olectra Greentech Ltd good for investment?
A: While Olectra has sizeable growth potential with the support of the EV segment, investors have to factor in the high valuation and some operational issues.
Explore more on Olectra Greentech Ltd’s EV initiatives
According to data from NSE INDIA, EV companies like Olectra Greentech Ltd are expected to see significant growth in the coming years.
