Olectra Greentech share price dropped by more than 12% during Tuesday’s trading session after Maharashtra’s Transport Minister, Pratap Sarnaik, instructed officials to annul the tender granted to the company due to its failure to adhere to delivery schedules.
Sarnaik stated on his social media account on “X,” without specifically mentioning Olectra, that the company had been inactive regarding the supply of 5,150 leased buses and that he has instructed officials to take steps to terminate the agreement.
This decision was made on Monday evening following a meeting at the Maharashtra State Road Transport Corporation (MSRTC) headquarters, as per reports.
The minister also mentioned that a new timeline was provided to Olectra for delivering 1,000 buses by May 22, but the company failed to deliver even one bus, which raises concerns about the company’s ability to fulfill future deliveries.
“As a result, the decision was made to terminate the tender agreement with the company,” the minister stated on “X.”
Nonetheless, it’s important to highlight that Olectra Greentech has yet to release any official statements regarding the cancellation of the order.
As per a report by PTI, EveyTrans Pvt Ltd, a subsidiary of Olectra Greentech, was contracted in May 2022 to deliver 2,100 electric buses to the Brihanmumbai Electricity Supply and Transport Undertaking (BEST) using a wet lease model over the course of a year.
The company representative informed PTI that to date, 536 buses have been supplied to BEST.
In the wet lease model, private companies not only provide drivers to run the buses but also take responsibility for their upkeep, which means BEST does not have to buy the buses outright.
Notably, even though Olectra Greentech has not met the required delivery targets, it received another contract in April 2024 for the supply of an additional 2,400 electric buses, as per PTI report.
Olectra Greentech share price today opened at ₹1,234.95 apiece on the BSE, the stock touched an intraday high of ₹1,288, and an intraday low of ₹1,180 per share.
Anshul Jain, Head of Research at Lakshmishree Investments said that Olectra Greentech share price is forming a bullish 40-day cup and handle pattern with a breakout pivot at 1,312. The recent knee-jerk reaction was well-supported at 1,253, erasing negative sentiment and reaffirming bullish strength. With the base structure intact and momentum returning, a move past 1,315 looks likely. The stock is expected to test 1,518, which aligns with the weekly swing high and the pattern’s breakout target, offering a strong risk-reward setup.
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