Olectra Greentech Limited (OLECTRA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Electra Green Take Limited Q2 NFI 27 earning conference call hosted by Nomura. As a reminder, all participant line will be in the listen-only mood and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kapil Singh from Nomura. Thank you and over to you, Kapil.

Hi, good evening, everyone. It gives me great pleasure to host this call. And today with us, we have the entire management team of Electra Green Tech. We have Mr. Mahesh Babu, MD, Mr. Sharad Chandra, CFO, and Mr. Hanuman Prasad, Company Secretary and Legal VP. Mahesh, sir, now I'll hand over to you for the presentation.

Okay. Good morning, everyone. It's my pleasure to be meeting you all on audio. I'll just give a brief of what's happening in auto industry. Globally, automobile sales stood in 2025 at around 100 million, growing at 4.7%. The EV sector is healthily growing. The car industry has grown about 5% in electric car industry globally. Around 70,000 electric buses were sold in 2025, and about 400,000 trucks were sold globally in 2025. Looking at the Indian automotive market, you all know that 2.83 crore, the auto industry is doing extremely well in India. Exports have been doing well with 66.5 lakh vehicles in I'll fight on this thing. Electric vehicles today represent about 10.7% of all vehicle registration till now, between January and October. You all know that electric three-wheeler leads the market with 60% adoption, followed by two-wheeler at about 10%, and electric buses at about 9%. Passenger car is about 7.4%. So overall, I would say Indian auto industry, EVs are picking up. We are seeing... Continued growth in electric buses as well. Till now, in India, we have about 21,000 electric vehicles on road. We have, India has registered about 3,747 vehicles in H1 of FY27, which is 8.96%, almost close to 9%. What is more heartening is the STU or the state transport purchase is close to 5,100 vehicle, out of which 3,700 seems to be electric. That's about 70% adoption, which is a very healthy one. As you know that we have Electra registered the highest 401 or delivered the 401 vehicle in this quarter, which is... One of the highest in this quarter. I would say if you look at H1, we have grown in revenue of 26%, EBITDA 23%, which is very healthy with the turbulence what we had in raw material price, fuel price index, all that. Out of which, I would say that the mobility division margins have come back to 14%, which is very good. We still have challenges in the... Energy division margin, which is moderated from EBITDA margins of 35% to 25%, which is the reality in the market now, due to the mix of export and domestic. Overall, I would say that this quarter has been challenging, but the team did well in terms of delivery of more than 400 vehicles. I manage the cost to get the EBITDA margins better in mobility division. Still work to do in energy division. Going forward in Q3 and Q4, the team is looking at working hard to get back some of the challenges we faced in Q1 and Q2, and we will continue to grow at the rate of 20-25 percent what we have been doing in the first half, going forward in second half as well. So, this is my comments. I am asking Sharachandra to share the results, numbers, so that you will go through the numbers.

Good evening, everyone, and thank you for joining us. We are pleased to share our financial and operating performance for quarter two and H1 financial year 2627. The company continued to record healthy year-on-year revenue growth, which is in the first half, supported by sustained momentum in our mobility division and the overall expansion of our operations. At a consolidated level, the revenue from operations for quarter two stood at 687 crore. Compared with 656.6 crore in Q2, financially at 26, registering a growth of 4.6%. For H1, financially at 26-27, revenue increased by about 25.8% to 1,262.5 crore compared with 1,003.8 crore in the corresponding period of the previous year. In terms of profitability, the EBITDA for Q2 increased to 109.9 crores compared with 93 crores in Q2 of financial year 26, representing a growth of 18.2%. The EBITDA margin improved from 14.2% to 16%. On a sequential basis, The operating margins and profitability has improved compared to Q1 of financial aid, 26-27, with a margin improving by about 3.3% the percentage points. In terms of H1, the EBITDA stood at 182.8 crores compared to 149 crores in H1 of previous year, registering a growth of 22.7%. The corresponding margin was 14.5% compared to 14.8 in previous year. The growth in EBITDA reflects the increase in business scale and operating performance. However, the translation of the growth into PBT and PAD was moderated by higher depreciation arising from capacity expansion and increased finance costs associated with term debt and working capital requirements. Consequently, the consolidated PBT for H1 stood at. 107.4 crores compared with 102.3 crores in the previous year, reducing a growth of 5.1%. Consolidated PATH increased by about 4.4% to 78.8 crores from 75.5 crores. EPS for the first half improved to 9.61 rupees from 9.21. So, we're on... Highlights are, revenue from operations stood at 687 crore, up by 4.6% year-on-year. H1 revenue increased by 25.8% to 1262.5 crore. EBITDA for quarter 2 increased by 18.2% to 109.3 crore, with margin improving to 16% from 14.2%. EBITDA increased by 22.7% to 182.8 crore, with a margin of 14.5%. Consolidated PBT for H1 student, 107.4 crores, up by 5.1%. Consolidated PAC for H1 increased by 4.4% to 78.8 crores. Overall, the investments made in the manufacturing capacity are expected to support our growth ambitions, and at the same time, we are remaining focused on managing working capital, optimizing the finance costs, and maintaining the cost discipline. While commodity prices, product mix, financing costs, regulatory development, and supply chain conditions may influence the quarterly performance. While commodity prices, product mix, financing costs, regulatory developments, and supply chain conditions may influence quarterly performance, we remain cautiously optimistic about our growth prospects for financial year at 26-27 and the focus on delivering sustainable and profitable growth. In terms of the segment-wise performance, Energy division registered a strong growth of 30% in Q2 and 37.2% in H1, reflecting improved business activity. Mobility division in Q2 remained broadly at the previous year level, while H1 revenue increased by over 24.7%, indicating strong overall growth in the six-month period. Overall, H1 revenue increased by 26.3%, with both divisions contributing to the growth. In terms of PVIT, Energy division stood at 25.14 crores, a decline of 6.5%. On H1, the current year stood at 41.36 crores, a decline of 4.5%. Mobility. The PBID stood at 69.39 crores for this quarter 2, as against 58.75 crores of quarter 2 of previous year, resulting in growth of 18.1%. Overall H1 for mobility stood at 106.31 crores, as against 81.73 crores with a growth of 30.1%. The key... Key points to be noted are, despite revenue growth of 30% in Q2 and 37.2% in H1, the segment results for an energy division declined by 6.5% and 4.5%. This is mainly because of the product mix lower exports compared to last year and increase in raw material prices. The mobility division results improved by 18.1% in Q2 and 30.1% in Q2, reflecting improved profitability despite the Modest revenue growth. So mobility division remains the principal contributor to the segment profitability, accounting for approximately 72% of H1 segment risk. In terms of cash flows, the cash flow statement, the cash flow, whatever we have generated in H1 reflects a significant improvement in cash generation from operating activities. Notwithstanding, higher working capital requirements and increased cash outflows arising from business expansion and borrowings. Overall operating cash generation on a standalone basis generated 181.8 crores as against a cash outflow in the previous year. However, the increase in trade receivables and inventory continue to absorb significant operating cash, highlighting the importance of accelerating the collections and improving working capital efficiency. The company continues to meet its capital expenditure commitments while servicing and reducing its borrowings. The significant financial cash outflow reflects both debt repayments and higher interest servicing requirements. With this, I will hand over to Nomura for the Q&A question.

Thank you Swami Sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may please press star and 2. Participants are requested to use handsets while asking a question. We will wait for a moment while the question queue assembles. First question comes from the line of Pradeep Rawat with Strategic Alpha. Please go ahead.

Yeah, good afternoon, sir. Am I audible? Thank you for the opportunity. So, I have some query regarding energy segment. So, you mentioned that the makeshift and RM inflation is the major contributing factor for the margin decline this year. But one of our peers has reported close to 40% EBITDA margin in this segment as compared to 25% of R. So, I just wanted to understand why there is a large divergence between us and our peers.

So to my knowledge, we don't have the data of our peers. Whatever we know, the industry is around between 25% to 30% margin. We will have a look at the data, and then we'll get back to you.

So Okay. So, we did 35% last year. So, was that a one-time thing or should we expect these kind of margins in coming quarters as well?

Yeah, I don't think 35% margin is a sustainable margin for long. I think we are aiming between 25% to 30%. I think we can look at between 25% to 30% margin in insulator as a stable volume. Thank you. And we'll continue to maintain the guidance in the industry. And you know that we are more than 30% of the market share in it. We did the highest 98 crore, and the next best industry is around 60 crore in the revenue in this. So we are very firm that we will lead the market in the polymer insulator and the energy division, and our EBITDAs are as healthy as 25%.

Okay. Sir, what is the export and domestic mix for this segment?

Right now, the export is very low this year, considering what has happened on the trade war which happened in the recent one. Hopefully, even when it comes up, we expect that to be a little bit one or two points better. It is just around 13% in this first H1 of the policy. Last year was about 40% plus.

Okay. Thank you and wish for all the rest.

Thank you. Next question comes from the line of Shruti Shukla with SUD Life. Please go ahead.

Yeah. Hi, sir. My audible. My question, I was just trying to understand the top line trend, right? I mean, if you look at the volume, they grew by 7% on a lot on one basis. And if we look at revenue for the e-vehicle division, it's barely gone up by around 1-1.5%. So what exactly went wrong here? I'm just trying to understand.

So, Swithin, I think went wrong. Actually, it's a mix. You know that we have a 9 meter, which is around, let's say, 1.1 crore to a 12 meter coach, which is around 1.45 crore or something like that. So, this quarter, most of the deliveries were around 9 meters, which is on the lower side. So, this product mix will keep happening, depending upon the depo readiness and which contract we are delivering. So, hence the number is the one which is the capacity which we have been constantly delivering. So, that number has gone up significantly, you know, that between the H1 536 to 759. That's the reason. In the quarter, if you look at it similarly, we delivered highest 401 numbers, but most of the numbers are in 9 meters, which is at a lower price point. And hence, the revenue, very marginal increase in revenue on the mobility division has happened. So, that's the difference.

Right. And any of the new orders, right? Are we getting more of the 9 meter orders or the 12 meter ones?

It is a mix of both. If you look at it, we have about 1,500 9-meter order pending, and similarly, we have about 3,000 crusts on the 12-meter. So, there is a mix of order. I think, typically, the market of 9-meter is high, but in the order book, our 9-meter is, let's say, much lower than 50%.

Understood. So, moving ahead, would it be right to assume that the 12 meters would have a higher share in terms of volume?

Yes, yes. 12 meters will have a higher share of volume at the 9 meters.

Understood. So, we are not really worried about the mix moving forward, right? You got it, got it. Thank you.

Thank you.

Thank you. Next question comes from the line of Ayush, an individual investor. Please go ahead.

Hi, I'm my auditor.

Yes.

Okay. A quick question. So, a lot of competition has increased in the e-truck segment. A lot of new entrants have entered the market, so don't you think we are getting late to launch our new platform and products in that? And second thing, a word on the expansion. I think we were exploring expansion of a new manufacturing facility, so where are we on that?

Okay, so first on the e-truck segment, as you rightly said, even in the bus segment today, we have close to 14 players in the market. Still, we are almost in the top two list today, and most of the time, we are trying to be number one, and we have a market share much close to 22% plus. Similarly, in the truck segment, I think there are about 13 players as of now, including us. So, we will definitely have a right to win strategy there. That's why we are not getting into any partnership and developing our own IPR trucks. I'm happy to share the first truck as we speak is getting built for the prototype and testing. We are planning to build a dozen trucks before we launch and test them very extensively before we launch at the end of the Q4 or early Q1 of next financial year. So, we have a very clear strategy on which segment to play and how do we win on it. Based on that, we are sure. Because if you look at the truck market, I said it's about 400,000, right? So, it's a huge market. And definitely due to our experience of about 750 million kilometers what we have run either in buses and also we have put about 117 trucks in the market and we have been learning in various segments. These learnings are getting into the truck. So there is no reason to believe that we will be having challenges. Of course, we will have challenges. Of course, there will be competition. That's where there is a market available. And I strongly believe the truck will be one of the markets which will not depend on government, which will not depend on cash flow issues. And hence, building that business will give a lot of leverage to Electra in coming years.

Okay, thank you.

Thank you. Next question comes from the line of Gaurav with Utility Unified. Please go ahead.

Hi, I'm Audible. Hello, I'm Audible.

Yes, we can hear you.

Yeah, I just wanted to know about the Tamil Nadu 1012 meter AC bus tender. Have you participated? And if we have, what are the outcomes?

Yes, for the answer is we have participated in the tender. Right now the tender is under technical evaluation, so I will not be able to much comment on it. We are hopeful still, we are very competitive, and we have this time participated through an operator, not through EV Trans, our related party. So we have now, as I told earlier, we are also participating from outside operators. To be competitive and to ensure that our products are competitive in the market. So we have participated with the operating partner in the Chennai tender or the Tamil Nadu tender, and the outcome is expected by this month.

Okay, sir. Thank you. Good to know about it. Sir, just one more question. Sir, I wanted to know about the FreshBus thing. We had received an initial order of five buses, I think so. And I'm seeing like the FreshBus website has a good UX, good UI, and it's run by a very professional person. So, going forward, if you want to scale up our private bus business, private electric bus business, don't you think FreshBus would be a very good partner to, you know, have? So, any talks with them with regards to private bus entry?

Yes, we are one of the first ones to give buses to Fresh Bus, and they have run, to my knowledge, more than 5-6 lakh kilometers already, a substantial amount, and they are very appreciative of our product. And, as you said, it's professionally run, and they are one of the successful private operators. We continue to engage with them and other private operators as well. I think there is a huge potential of private bus adoption going forward. There are a lot of learnings in the first batch of buses, which we have given in the private segment, and based on which we have already started working on a 13.5-meter bus to meet the requirement, And that also will be part of the launch, which we have been talking about in the coming quarters.

Okay, so good to know about it. Wish you all the rest for the next quarter, the next financial year. Thank you.

Thank you.

Thank you. Next question comes from the line of Ritwik Ram, an individual investor. Please go ahead.

Hello, good evening, sir. Congratulations for the stellar performance of Electra Green Tech. I have a question to Mr. Mahesh Babu. My question is regarding the de-merger of the composite insulator business to unlock its value. I can cite an example that Ashoklayland de-merged the electric bus business from Ashoklayland to switch mobility and Unilever de-merging the ice cream business to unlock the business potential. Is there a possibility in future to demerge the composite insulator business to unlock its potential? Because OLECTRA is the largest manufacturer.

So, thanks for your suggestion. We'll evaluate it. Right now, we don't have a proposal. When we do it, we'll definitely come to the market and inform you after the board approval.

Okay, sir. Notice, sir, what about the pending litigation cases regarding ETO motors, etc.? So, that is my last question, sir.

I'll ask the company secretary to...

Mr. Ludwig, can you repeat your question, last part, actually, which company you are referring to litigation?

That ETO Motors, that you had, the Electra had invested some 5-6 crore and Electra has to get the money back. So one of the cases was published on the BAP class.

With ETO Motors, we don't have any litigation. DB Trans, you are referring to?

Okay, sir. I'll skip it, sir. I'll get back on that. And my last question is regarding the GFRB rebar business. Any plans of reviving that business? That is my last question.

I think in the last call, we mentioned about this. As of now, we have no plans to work on this business. It is highly competitive and then we are not focusing on this business as of now. We are focusing more into our own platform of buses and trucks.

Thank you very

much. We are, the business what you talked about is, we evaluated it, we made prototype, and we decided not to go ahead because we don't see any potential margins in the business. We have already said we are working on a hollow insulator, solid insulator, and other products which are having very high potential. In terms of energy division's growth, and that we are working. So, as a board, we evaluate multiple options, and we will proceed which is viable and which is worth on returns to the extent of what we are expecting, and only then we will proceed ahead.

Noted. I have been an investor since 2017, September, Olexa. I am a very proud investor. Thank you very much.

Thank you for the trust.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question might be star and one. Is there no further question from the participant? I know in the conference over to Kapil Singh for the closing remarks. Thank you and over to you, Kapil.

Yeah, good evening, everyone, and thanks for joining the call. On behalf of Namurah, I thank the director of management for giving us this opportunity, and we can now close the call.

Thank you so much. Ladies and gentlemen, on behalf of Electra. Thank you so much, sir. Ladies and gentlemen, on behalf of Electra Green Tech Limited and Nomura, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.