Olectra Greentech shares tank over 19% intraday; here is why

According to the reports, the state’s transport minister, Pratap Sarnaik, directed officials to cancel the tender order awarded to the company for failing to meet delivery timelines. The decision was taken at a meeting of Maharashtra State Road Transport Corporation (MSRTC) on Monday, reports said further.

Shares of the company took a big knock following this development. Last seen, the stock was down 6.04% at ₹1,264.10 per share on the National Stock Exchange.  

“The Exchange has sought clarification from Olectra Greentech Limited with respect to a recent news item captioned Olectra Greentech tanks 14% as Maharashtra govt cancels ₹10,000-crore e-bus order. The response from the company is awaited,” an NSE notice stated.

The company has not responded to the development so far.

On ‘X’, Sarnaik said that the company has been inactive in the supply of 5,150 leased buses and that he has directed officials to take action to cancel the said agreement. He also said that a revised schedule was given to Olectra for the supply of 1,000 buses by May 22, but not a single bus was delivered, raising doubts over the future delivery of the buses by the company. However, he did not name Olectra in his post.

The minister raised serious concerns about the company’s capacity to fulfil the rest of the contract and emphasised the urgent need for new buses.

For the January to March quarter, Olectra’s revenue increased 58% year-on-year (YoY), while its net profit doubled. EBITDA grew 70%, and margins improved by 100 basis points.