OLECTRA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.9

📊 Financial Overview

• Profitability: PAT at ₹22.4 Cr, slightly down from ₹24.3 Cr QoQ; EPS at ₹17.2
• Margins: ROCE at 21.0%, ROE at 14.2% — strong capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.20 — low leverage, financially sound
• Dividend Yield: 0.03% — minimal income return

📈 Valuation Metrics

• P/E Ratio: 89.8 — significantly above industry average of 35.0
• P/B Ratio: ~11.96 — premium valuation relative to book value ₹129
• PEG Ratio: 1.61 — suggests valuation is ahead of earnings growth
• Intrinsic Value: Estimated around ₹1,350–₹1,450 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: Olectra Greentech manufactures electric buses and composite insulators, contributing to India’s EV and clean energy infrastructure
• Moat: First-mover advantage in EV buses, strategic partnerships, and government contracts
• Growth Drivers: EV adoption, public transport electrification, and infrastructure modernization

📌 Entry Zone Recommendation

• Suggested Entry: ₹1,400–₹1,450 — near DMA200 and intrinsic value
• Technical Indicators: RSI at 58.0 (neutral), MACD negative — mild bearish momentum, ideal for accumulation on dips

📈 Long-Term Holding Guidance

• Hold for long-term if accumulated near support; ideal for thematic investors focused on EV and infrastructure
• Monitor order book growth and margin expansion

✅ Positive

• Strong ROCE and ROE with low debt
• FII holding increased by 1.38%
• Quarterly profit growth of 7.96%
• Strategic positioning in EV public transport

⚠️ Limitation

• High P/E and PEG ratios
• Low dividend yield
• MACD indicates short-term bearish trend

📰 Company Negative News

• Q2 FY26 PAT declined slightly due to higher input costs and delayed deliveries

🌟 Company Positive News

• New EV bus orders from state transport bodies expected to boost FY26 revenue
• Expansion into hydrogen fuel cell buses announced

🏭 Industry

• EV and clean tech industry P/E at 35.0 — Olectra trades at a premium
• Sector driven by electrification, sustainability mandates, and infrastructure investment

🧾 Conclusion

• Olectra Greentech is a promising EV infrastructure player with strong fundamentals and strategic growth potential
• Accumulate near support zones for long-term exposure to India’s clean mobility transformation