The Bus Company Nobody Asked For, But Here We Are

The Last Mile (That Takes 18 Months)

Olectra Greentech Limited. Say it fast, it sounds like a startup that sells probiotics to Silicon Valley tech bros. In reality, it’s a Hyderabad-based company that builds electric buses. Not flashy. Not a platform play. Just buses. Lots of them. To the government.

Here’s the thing: the Indian Government decided that public transport buses need to become electric. This was a correct decision—air quality in cities like Delhi is basically a valid medical condition. And Olectra said: “We’ll build them.” In 2016, they partnered with BYD, a Chinese e-bus and battery company, and started manufacturing. Since then, they’ve delivered 2,448 electric buses and 51 electric tippers, covering 30+ crore kilometers. That’s a lot of silent bus rides through Bangalore traffic.

But here’s the actual story: the company did 45% profit growth over 5 years (CAGR 123%), yet the stock is down 15% in the last year. Why? Because the Indian government ordered 10,193 buses, the company has a P/E of 50.5x, margins are compressing faster than a deflating tyre, and everyone is waiting to see if they can actually deliver without losing money on each bus.

February 2026 concall revealed the real picture: margins normalizing to 10–12%, product mix shifting away from high-margin 12m buses to lower-margin 9m and trucks, management talking about “working capital discipline” (aka not flooding depots with buses until they’re ready), and BEST Mumbai buses literally carrying twice as many passengers as designed. This is what happens when you build buses faster than the system can absorb them.

Make Buses. Ship Buses. Collect Government Subsidies. Pray They Work.

Olectra’s actual business is 91% e-buses and 9% polymer insulators (legacy business, dying quietly). The e-bus model works like this: the government tenders for electric buses. Olectra bids at a per-vehicle price (₹1.6–1.8 crore per bus, roughly). They win. They build the bus using BYD battery packs and chassis, localize components, sell to either state road transport bodies (MSRTC, BEST, TSRTC) or to Evey Trans (a subsidiary of parent MEIL, which operates the buses).

The catch: they get 60% payment upfront, rest in 120–180 days from delivery. Meanwhile, they must maintain inventory for 60–90 days because bus deployment takes time. Depots need power infrastructure. Routes need finalization. Financing needs approval. In other words: the manufacturer is technically done, but the ecosystem is still figuring out where to park the bus. This is called “working capital intensity” in finance language and “logistics nightmare” in reality.

The government pays through subsidies (either direct ₹25–35 lakhs per bus via PM E-DRIVE, or operating support ₹24/km via PM eSEWA), which flow through the SPVs, then to Olectra. If the SPV doesn’t get financing, if the state doesn’t approve the route, if the depot isn’t ready—the bus sits. And so does the cash.

Q3 FY26: Revenue Up, Profit Flat. Growth Is Complicated.