The shares of Olectra Greentech Ltd experienced a sharp decline, slipping as much as 14 percent to an intraday low of Rs 1,160 on Tuesday, May 27. This steep fall came after Maharashtra’s Transport Minister, Pratap Sarnaik, publicly demanded the cancellation of the company’s electric bus order, citing significant delays in delivery.

In a post on the social media platform X, Sarnaik expressed strong dissatisfaction over the company’s failure to deliver even a single bus from the 1,000 units scheduled for handover by May 22. Although he did not directly name Olectra Greentech in the post, his comments clearly targeted the company. He also stated that officials were directed to cancel the tender for 5,150 buses because of the supplier’s inaction, raising serious concerns about the viability of the entire project.

Background of the Order

The electric bus order in question was awarded in July 2023 to a consortium formed by Olectra Greentech and Evey Trans Pvt Ltd. The contract was valued at nearly Rs 10,000 crore and was designed as a 12-year agreement. Under this contract, Evey Trans was responsible for procuring buses from Olectra and supplying them to the Maharashtra State Road Transport Corporation (MSRTC) over a period of 24 months. Meanwhile, Olectra was expected to provide ongoing maintenance support for the bus fleet.

Despite this large-scale project and significant financial commitment, the company reportedly failed to deliver any buses by the initially agreed deadline of May 22, 2025. This failure was confirmed during a review meeting held on Monday evening at the MSRTC headquarters, after which the Transport Minister publicly criticised the lack of progress.

Impact on Stock Market and Business

Following the minister’s remarks, the company’s shares reacted sharply. As of around 9:30 am, the stock was trading at Rs 1,266, down nearly 6 percent from the previous close, and after falling as low as Rs 1,160 earlier in the session. This comes despite a recent surge where shares had gained 13 percent over the past month. However, for the year 2025 so far, the stock remains down approximately 9.2 percent.

Interestingly, this negative development comes at a time when Olectra Greentech announced strong financial results for the March quarter. The company reported a 58 percent year-on-year rise in revenue, with its net profit doubling over the same period. Additionally, EBITDA surged by 70 percent, and margins improved by 100 basis points, indicating healthy underlying business fundamentals.

Olectra is expected to hold an analyst call on May 28 at 4:30 PM, where management will likely address these delivery concerns alongside their financial performance.

Broader Implications

This incident highlights the challenges faced by electric vehicle manufacturers in India, particularly when handling large government contracts. Delays in supply chains, production issues, or operational inefficiencies can significantly impact business reputations and stock valuations. It also raises questions about the project management and execution capabilities of the consortium tasked with delivering Maharashtra’s ambitious electric bus fleet.

If the cancellation of the tender proceeds, it could not only delay the state’s transition to cleaner public transport but also affect Olectra’s future contracts and market confidence. The Transport Minister’s firm stance signals a zero-tolerance approach toward missed deadlines in critical infrastructure projects.

Conclusion

The Olectra Greentech case serves as a cautionary tale about the risks in government-linked EV projects and the high expectations for delivery timelines. While the company shows strong financial growth on paper, the failure to deliver on key orders could undermine investor trust and jeopardise future opportunities.

For investors and stakeholders, the upcoming analyst call on May 28 will be crucial to understanding how Olectra plans to address these challenges and whether it can regain confidence in its delivery capabilities amid a rapidly growing electric vehicle market in India.

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