Olectra Greentech shares tumble nearly 7% in early trade. Here's why
Olectra Greentech shares dropped sharply on Tuesday morning after Maharashtra's Transport Minister Pratap Baburao Sarnaik publicly called for the cancellation of a major electric bus tender, citing the company's failure to meet revised delivery deadlines.At 9:18 AM, Olectra's stock was down 6.37% at Rs 1,259.60 on the BSE. The fall followed the minister's post on X (formerly Twitter), where he claimed that not a single bus had been delivered under a revised schedule that required 1,000 buses to be supplied by May 22. 'Therefore, it was decided that the tender agreement with the company should be cancelled,' he wrote.advertisementThe Rs 10,000 crore contract in question was awarded in July 2023 to a consortium of Olectra and Evey Trans Private Ltd by the Maharashtra State Road Transport Corporation (MSRTC). It involved the supply, operation, and maintenance of 5,150 electric buses over 24 months under a gross cost contract. Olectra was to manufacture and supply the buses and handle maintenance throughout the period.
In its FY24 annual report, Olectra hailed this as the world's largest electric bus order and noted an order book of 10,969 units as of March 31, 2024. The company was also eyeing further expansion with fresh government tenders.Despite the controversy, Olectra posted strong Q4 earnings on Monday. Net profit rose 39% year-on-year to Rs 20.69 crore, while revenue climbed 55% to Rs 448.92 crore.The company also recommended a final dividend of Rs 0.40 per share for FY25, subject to shareholder approval.advertisementStill, the political intervention and concerns over delivery commitments have raised fresh doubts among investors. The stock, which has delivered over 2,250% returns in the last five years, has lost about a quarter of its value over the past year.
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Time of India
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Time of India
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Time of India
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