Summary
Olectra Greentech Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 4:00 PM
Event Participants
Executives 3 B. Sharat Chandra (CFO), Hanuman Prasad (VP-Company Secretary & Legal), Mahesh Babu (Managing Director)
Analysts 6 Akash Srivastava (Individual Investor), Aniket (C.R. Kothari & Sons), Aniket Madhwani (Steptrade Capital), Gaurang (Utility Unified), Preet (InCred AMC), Rahil S. (Sapphire Capital), Rushabh Sanghvi (Oaklane), Shubham Tamrakar (Alturas)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| EV Deliveries | 385 units | +37% YoY; Includes 24 trucks and 51 nine-meter buses compared to primarily 12-meter buses last year. |
| Total Revenue | ₹663.6 crores | +29% YoY; Driven by strong volumes in EV segment (+23% segment revenue growth) and Insulator growth. |
| EBITDA | ₹97.1 crores | +19% YoY; Growth driven by scale, though margins saw some compression due to product mix. |
| EBITDA Margin | 14.1% | Stable performance; Management notes this as industry-leading, though long-term target is 10-12%. |
| PBT | ₹64.1 crores | +3% YoY; Impacted by higher interest costs and depreciation following plant capitalization. |
| PAT | ₹46.7 crores | Flat YoY; Compression due to higher finance costs and operational ramp-up expenses. |
| Insulator Revenue | ₹250 crores (9M) | 40% export mix; Targeting ₹300 crores for full year FY26 vs ₹180 crores last year. |
| Order Book | 9,400+ buses | Sufficient for 2.5 years of production; includes L1 status for 1,785 vehicles in recent CESL tender. |
Geographic & Segment Commentary
- Electric Vehicles: The segment saw a 37% volume jump in Q3, with Olectra maintaining a 29% market share in the bus segment (No. 1 position). Strategic focus is shifting from pure 12-meter buses to a mix including 9-meter buses and electric tippers/trucks (116 deployed to date).
- Insulators: This division is experiencing high margins (32-33% EBIT) driven by a 40% export mix. Management expects the top line to reach ₹300 crores for FY26 with sustainable margins in the 25-30% range going forward.
Company-Specific & Strategic Commentary
- New Manufacturing Plant: Phase-I is operational with a capacity of 2,500 units per shift (5,000 per annum in double shift). A semi-robotic line is expected to be ready by Q4 FY27 to handle multiple platforms (12m, 9m, and trucks).
- Product Diversification: Investing ₹300-350 crores over two years for new product development, including new platforms for 12m and 9m buses and a significant push into the electric truck segment.
- Operational Optimization: Management transitioned depot technician payments directly to customers to optimize GST impact, contributing to a reduction in reported employee costs.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Deliveries | 1,500 to 2,000 buses | Revised from 2,000 units; depends on market absorption and depot readiness. |
| EBITDA Margin | 10% to 12% | Long-term target as volumes scale and EV becomes a mainstream mass-market segment. |
| CAPEX | ₹300 - ₹350 crores | Over next two years specifically for new product development and technology platforms. |
| Insulator Growth | 15% to 20% YoY | Driven by government electrification push and expanding export opportunities. |
Risks & Constraints
| Risk | Context |
|---|---|
| Ecosystem Readiness | Deliveries are constrained by STU depot readiness, electricity availability, and financier confidence rather than plant capacity. |
| Margin Compression | Changing product mix (9m buses and trucks) and increasing competition may lower historical high-margin percentages as volumes scale. |
| Working Capital | Large order books pose risks; management is avoiding “pushing” inventory into unready depots to prevent capital lock-up (e.g., waiting for electricity sanctions). |
Q&A Highlights
BEST Order Challenges
- Question: What is the status of the Mumbai BEST orders and recent reports of legal exploration? (Gaurang)
- Answer: No legal notice received. Deliveries are slow because current electricity consumption by BEST is significantly higher than tender specs (102 passengers vs 58). Management is negotiating compensation within the legal framework to avoid loss-making deliveries (Mahesh Babu).
Delivery vs. Order Book Gap
- Question: Why is delivery slow despite a 9,400+ order book? (Rahil S.)
- Answer: We refuse to build inventory that sits idle at depots without electricity or sanctions, which traps working capital. We deliver only what the market can currently absorb to remain financially efficient (Mahesh Babu).
Finance Costs
- Question: Why are finance costs high despite low debt? (Preet)
- Answer: Costs are driven by post-capitalization interest on term loans (9%+) and LC/VFS discounting for imports. Working to optimize these rates in the near future (B. Sharat Chandra).
Technology Obsolescence
- Question: How is the company viewing solid-state and sodium-ion batteries? (Gaurang)
- Answer: We monitor all stages (primary, pilot, mass). Currently, Lithium-ion remains the only mass-production technology; others are in pilot/pre-production. Our platforms are designed to “plug-in” new technologies as they mature (Mahesh Babu).
Key Takeaway
Olectra Greentech delivered a steady Q3 FY26 with 37% growth in volumes (385 units) and a 29% YoY revenue increase to ₹663.6 crores. While the company maintained its No. 1 market position with a 14.1% EBITDA margin, PAT remained flat due to higher finance costs and depreciation following the capitalization of its new 2,500-unit capacity plant. Management revised its FY26 delivery guidance to 1,500-2,000 units, citing ecosystem constraints like depot readiness and power availability. Strategically, Olectra is diversifying into electric trucks and 9-meter buses while investing ₹300-350 crores in R&D over the next two years. The insulator business remains a high-margin contributor, targeting ₹300 crores in revenue for the full year. Investors should monitor the resolution of the BEST contract negotiations and the speed of market absorption for the massive 9,400+ unit order book.
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