Olectra Greentech Limited

Olectra Greentec reported a strong Q3 FY26, with revenues increasing 29% YoY to ₹663.6 crores. Electric vehicle deliveries saw a significant 37% YoY rise, reaching 385 units. The company's EBITDA grew 19% YoY to ₹97.1 crores, achieving an EBITDA margin of 14.1%, which management highlighted as the best in the EV industry. Olectra maintained its dominant position in the electric bus segment, securing a 29% market share in Q3 FY26 and a 24% YTD share, reinforcing its #1 ranking.

Despite robust top-line growth, Q3 FY26 PAT remained broadly flat YoY at ₹46.7 crores. This was primarily attributed to a strategic shift in product mix, as Olectra expanded into newer segments like 9-meter buses and electric trucks. These emerging segments, while crucial for future growth, currently carry lower initial margins compared to the more mature 12-meter bus segment, leading to some compression in the overall EV segment margins.

Olectra holds a substantial order book of 9,000 pending bus orders and recently emerged as L1 in a CESL tender for 1,785 vehicles. However, the company's delivery pace is carefully managed, with a revised FY26 target of 1,500-2,000 vehicles, down from an initial 2,000. Management emphasized that deliveries are contingent on market absorption, ecosystem readiness (depots, charging infrastructure), and financial sanctions, aiming to avoid tying up significant working capital.

The company plans a CAPEX investment of approximately ₹300-350 crores in the coming year, specifically for new product development. This includes new platforms for 9-meter and 12-meter buses, as well as the truck segment, with capitalization expected over two years. This investment is part of a broader strategy to expand market reach and ensure sustained growth by diversifying the product portfolio.

Olectra is actively engaged in discussions with Mumbai BEST to resolve a non-delivery issue related to higher-than-tender electricity consumption and loading patterns of the buses. Management stated that they cannot deliver at a loss and are seeking a legal framework for compensation. A swift resolution is anticipated to unlock these orders and accelerate deliveries, which are currently on hold due to the dispute.

The insulators division contributed approximately ₹250 crores to the top line year-to-date and is targeting ₹300 crores for the full FY26, representing a significant increase from ₹180 crores last year. EBIT margins for this segment improved to 32-33% in Q3, largely due to a favorable export-oriented product mix. Management expects this segment to grow 10-15% YoY, supported by government push on electrification.

The adoption of electric buses by the private sector remains slow, primarily because government subsidies are directed towards state transport undertakings, not private players. Additionally, private operators often face challenges in securing large bank loans for EV purchases. Olectra is actively collaborating with government bodies and private entities, including NBFCs like Macquarie Capital, to facilitate funding and expects a production kickoff in this segment within approximately one year.