Note that this conference is being recorded. I now hand the conference over to Mr. Amar Kant Gaur of Axis Capital. Thank you, and over to you, Mr. Gaur.
Thank you, Sudhan. Good evening, everyone. On behalf of Axis Capital, I welcome you to the Q1 FY25 post results conference call of Olectra Greentech. From the management team, we have with us, Mr. B. Sharat Chandra, CFO, and, Mr. P. Hanuman Prasad, Company Secretary and Compliance Officer, along with teammates from Finance and Strategy. I will now hand over the call to Mr. Sharat Chandra for his opening remarks, after which we can have the Q&A. Over to you, Mr. Sharat Chandra.
Yeah. Thank you, Amar. Good evening, everyone. Thank you all for joining in for the earnings call for Q1 2024-25. So we are taking as read the presentation, which is put on our website, along with the safe harbor statement thereon. So we are pleased to report strong growth in our consolidated revenue and profitability for the quarter one financial year 2024-25. We have till date, till thirtieth June, cumulatively delivered about 1,851 electric buses and 51 electric tippers. I would like to present the key highlights of your company, at a glance. So Olectra buses have successfully covered more than 25 crore kilometers across the length and breadth of the country.
Strong demand continues, with the company's net order book of electric buses stands at 10,818 numbers after delivering 156 buses in Q1 FY 2024-25. Our focus continues on increasing our capacity of, and enhancing our technology capabilities. The construction work at, of the new state-of-the-art plant at Seetharampur is in full swing, and your company has transitioned to the new facility and commenced the plant's operation partially in quarter one. Now, I will begin with you, providing the key highlights for Q1 consolidated financials. On a consolidated basis, the revenue from operations for Q1 was at INR 313.9 crores, up by 45%. The company's EBITDA for Q1 reached an impressive INR 50.5 crores, marking a growth of 22% compared to corresponding quarter of previous year.
The PBT surged to INR 31.8 crore, an increase of 26% versus the Q1 of previous year, which was around INR 25.3 crore. PAT stands at INR 24.3 crore, up by 34% compared to Q1 previous year's number of INR 18.1 crore. On a standalone basis, the revenue from operations was at INR 304.2 crore, versus INR 206 crore of the previous corresponding quarter, up by 48%. The company's EBITDA for quarter one reached an impressive INR 43.6 crore, an increase of 13% compared to corresponding Q1 of previous year of INR 38.6 crore. The PBT surged to INR 28.1 crore, an increase of 13% versus previous year Q1 of INR 24.8 crore.
The PAT stands at INR 20.7 crores, up by 11% compared to the previous fiscal's corresponding quarter of INR 18.7 crores. Thank you, and over to the Axis team for the Q&A.
Thank you very much, sir. We will now begin the question and answer session. If you wish to ask a question, you may press star and one on your touch-tone telephones. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Bala Murali Krishna from Oman Investment Advisors. Please go ahead.
Hi, good evening, sir. So could you please tell us how many buses you have delivered and electric tippers in this quarter?
Yeah, we have delivered about 156 electric buses. In this quarter, we have not delivered any tippers in this quarter.
Okay. I think we have order book of tippers, so what could be the-
Yeah, we have, we have actually till now cumulatively delivered about 51 electric tippers, and we have an order in hand of about 41 numbers, which we are in the discussing the delivery schedule, which we are targeting in the H2.
Okay, understood. So regarding the execution, I think we have a target of 2,000 buses for this year. So we have delivered 156. So, I think, do you think that we are on track, and we can complete that balance quantity in the upcoming three quarters?
So, as per the set target, what we have provided guidance in the previous earnings call, we have delivered about 156 numbers in Q1, and we are actually well set to meet our target, which could be in the region of 1,500 to 2,000 numbers in this year. We expect the quarter one, the quarter two numbers to double than the quarter one, more than double, and then the H2, we are expecting about 1,000+ numbers.
It means, we will be short of the 2000. That's fine. So what is the monthly-
Yeah.
What is the monthly production rates are as of now?
See, as I think you are aware, we have transitioned to the new plant in this quarter, and, whatever initial teething issues were there, they have been resolved. And, now we have the capacity to do about, close to about 200 numbers per month. And, and by the end of the year, we are targeting to increase the capacity to about 5,000 numbers, which is approximately 400 numbers per month.
Yeah, understood. So, regarding that, any pipeline in the tender, PM-eBus Sewa second tender, I think we have participated. So any outcome of that, and UP tender, whether it's same for any rebidding?
So basically, the tenders which are in the pipeline, UP, the CESL tenders, which are coming up in the next two months, I will ask my colleague, Ramesh, to answer this question.
The CESL 2 PM-eBus Sewa tender is yet to be quoted, yet to be bidded by all the participating participants. UP tender was NTPC, and the results have not yet come.
Oh, okay, sir. And any other intercity tenders coming? I think, in Hyderabad, the Evey model is supplying those intercity tenders.
Which was the old tender? It is a part of CESL two tender, which they have received almost 1.5 year back. They are supplying for that. Like, as we told and as we have presented in our presentation, we are the first OEM to cross 10,000+ orders.
Understood. Sir, lastly, on this presentation, I think in Stock Exchange we could not see your presentation. I think you need to recheck that one. Lastly, on order book, sir, we have a good order book, but being a 10,000, 11,000 order book, so the execution of this will take more than two years. So do you think that when we participate in tenders now, the government or the STUs will be, maybe need a little bit earlier deliveries, which other players are delivering very quickly. We may not be able to deliver any buses for the new tenders before two years. So this could be a risk for us in winning tenders, or how do you see that one?
See, we are, as we have told, we are actually increasing our capacity to the 5,000 numbers by end of this financial year. Going forward, next year will be the biggest year, as we have mentioned in the earlier call also. So there we are targeting more than 5,000 numbers next year. In the following year, we will, we are planning to complete the existing order book. In case of new tenders, definitely we are participating, and we are participating in all the new tenders. According to the order book positions, we will be in a position to increase our capacity.
Okay, sir. That's all. Thank you.
Thank you. The next question is on the line of Venkatesha RJ from Motilal Oswal. Please go ahead.
Thanks a lot for the opportunity, sir. My question is that, you know, from almost from last 2-3 quarters, you know, company is assuring that, we are going to, have a production capacity of more than, say, roughly around, 800,000 buses in a quarter. But if you look at last 3 quarters or 4 quarters, all the quarters, you are only roughly manufacturing around 150, 160 buses. And in next 18 months, you need to supply more than, say, 7,000-8,000 buses. Can you just, you know, elaborate on this one, on how the company is going to do this, handle this case?
Yeah. I think we have clarified earlier that because of the battery norms, last year numbers were impacted. And accordingly, we could deliver about 507 number buses last year. And we have transitioned to the new plant in this quarter, and whatever teething initial issues were there with regard to building up the new plant has been resolved. And as per our guidance given in the last call, we have done about 156 numbers in this quarter one, and we are targeting to do about close to 500 numbers in H1 and followed by 1,000 numbers in H2. And we are targeting more than 5,000 numbers in next year, wherein our capacity will be fully available.
Next financial year, we would like to basically increase our capacity to over 10,000 numbers to meet the existing order book.
Okay, that's all from my side, sir. Thank you.
Thank you. Next question is on the line of Rishabh Gang from Sancheti Family Office. Please go ahead.
Yeah. Hello, sir. Am I audible?
Yeah, yeah, very clear.
Yeah. Thank you so much for the opportunity. You know, I have, I wanted to ask, what do you think about the opportunity for EVs in the pickup trucks and commercial vehicles, especially the light commercial vehicles, in India? Yeah, sure.
Yes. As per our view, there is a huge scope for the especially in the tippers and dumpers and other markets. When it comes to LCV, as of now, we don't have any view on that, but we are concentrating mainly on the heavy commercial vehicles. And we are getting huge inquiries, and we are in the process of getting it closed.
Okay, are these segments interesting for you? Like... Yeah.
So basically, our motto and focus have been to actually expand our portfolio in the buses itself. So we have a very, very strong R&D team of 50+ members. And we have been actually working on building up alternate platforms and bringing new product portfolio within the buses itself. In addition to that, we are focusing on electric tippers and trucks. So these are the two main products where we are concentrating, and as of now, we don't have any other plans for on other products.
But would the success factors be very different in this segment versus the one in which you are present in? Or would it be like similar one? Just a broad idea on that, sir.
Basically, see, EV, as you are aware, is in very, very nascent stage, in the country. Though we have been there in the past 7-8 years, still, when we talk about the maturity of the industry, it is very, very nascent. So, and overall, I think, the population of buses is about 1.8 billion, and, almost less than 1% is electrified as of now.
Mm.
So, then this EV industry has taken off, and then when the government has been pushing for adoption of EV, and it was easier to start with electric buses, and it is very important for public transportation to get converted into EVs. So one of the major constraint will is the charging infrastructure. And for electric buses, we have charging infrastructure built in the depots. They are already, there's a space for parking all the buses. So that was the reason why it is little easier compared to other products to implement and bring the EV adoption.
All right, and CV, it won't be so easy, and the, it would be a impediment. All right, got it. Thank you so much, sir.
Yeah, thank you.
Thank you. Next question is from the line of Gaurav from Unifi Capital. Please go ahead.
Yeah, hi. Am I audible?
Yes.
Yeah. So recently there was news about Olectra importing lithium batteries for developing electric tractor for export market. So can you give us an update on it? And, apart from that, are we developing more EV products, like an electric double decker bus? So that's my question number one, and my second question is, just wanted to know the update on automation of the new factory. Are the robots in place for automation?
Yeah. So coming to auto, question number 1, we are not aware of any such news or nor we are in the process of any exporting any products in the near future. So, and coming to your automation, yes, we are in the process of finalizing. We have identified the vendors, and we are in the finalizing, in the advanced stage of finalizing the and, hopefully in next 2-3 months' time, we are going to finalize the automation.
Okay. And are we developing an electric double decker bus as of now? Because there is a tender from Thane Municipal Corporation for 10 of those.
Yeah. No, actually, we are not in the process of developing double-decker as of now. The quantities are very less. We are not seeing a great future in double-decker.
Okay. Yeah, that's about all.
Thank you. Next question is from the line of Joel, who's an individual investor. Please go ahead.
Hello, am I audible?
Yes.
Yes, sir. Please go ahead.
Yeah, thank you for the opportunity, and congratulations on a good set of numbers. My question was related to the private electric bus opportunities. Are we seeing any traction in that segment, and do we have any orders at the moment, other than STUs?
Yeah. Thank you. So the private segment is slowly opening up, and, as far as we are concerned, we have delivered last year about 90 numbers to a private party. And in the recent past, we have delivered about 5 numbers to Microsoft. So the market has started to take the traction, and then we hope this market will open up soon.
Okay. Yeah, yeah. Thank you for your, the answer. Yeah, that's it from my side.
Thank you. Next question is on the line of Aditya, who's an individual investor. Please go ahead.
Am I audible?
Yes, sir, please go ahead.
Yes. So I have a question related to the new plant. Are we operating at full capacity, which you mentioned as 200 buses? And in that case, why we will be not able to achieve around 1,800 electric buses in the year, if we have started operating at full capacity post-quarter end?
Sorry to interrupt, Mr. Aditya. Can you please repeat your question? Your voice is-
Yes. My question was, are we operating at full capacity in our plant, that is, 200 buses? If yes, since when?
Yeah. Thank you, Mr. Aditya, for your question. See, we have built the capacity. We have transitioned to the new plant, and by quarter one end, we have an installed capacity about 200 buses per month. So, we have not achieved full capacity. We are working at lesser than the full capacity, and no OEM will be able to operate at 100% capacity. Generally, the efficiency levels are about 80%-85%. So, and we have built the capacity, and we are, as we have mentioned, we are targeting about 1,500 numbers, though we have, we will be building the capacity about 5,000 numbers.
Yeah. Okay, so, are we operating at the 80%-85% capacity, which you mentioned now?
In H2, definitely we are planning to operate at 80%-85% capacity.
Okay, understood. Thank you. That's all. Thank you.
... Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Pradeep Patel from Infinite Wealth Advisors. Please go ahead.
Sir, what do you think about margin in next couple of quarter? Will it be improved?
Can you repeat your question?
Sir, margin for the next couple of quarters. It will be about 14%-15%, or it will be improved?
Yeah. So Mr. Pradeep, actually, we have been operating at a very healthy margins. The operating margins have been consistently good for all the quarters. And because of the product mix, some of the quarters, the margins could vary. And over a long term, we expect the margins to be in the region of 12 to 10 to 12%, keeping in mind the market dynamics, the volumes. So that is what is the guidance we could give at this moment.
Sir, 10-12 EBITDA margin?
Yes, correct. Operating margins.
Okay. Okay. Thank you.
Thank you. Next question is on the line of Varun Poduval from Yes Securities. Please go ahead.
Good evening, everyone. My question is in three parts. One is with respect to understanding that we will be reaching the capacity of 10,000 by the end of FY 2026. So is there any further plans of expansion post that? That is question number one. The second is with respect to the capital that is being invested through short-term debt and internal accruals to the extent of, I think, INR 700 crore. Just want to understand what is the breakup of it being deployed till date and the schedule of it being deployed in the future. Continuation to that would be that, I'd like to understand when you would think of debt-free on that aspect and that positive. Yeah. Thank you.
So with regard to your first question, capacity of 10,000 and more, yes, you are right. By financial year 2025, 2026, we are planning to expand our capacity to 10,000 numbers. As of now, we have the flexibility to increase it based on the demand and based on the supply requirements. So as of now, we have planned to do about 5,000 numbers by end of this financial year and increase to scalable to 10,000 numbers by next financial year. That is your first question. Second, with regard to term loan, we have actually we are as we have mentioned we are in the progress of the planned completion by end of this financial year.
So as of now, we have taken sanction about INR 500 crore for term loan and about balances from internal accruals. We have deployed close to about INR 200 crore till now.
All right. One more question is with respect to what is the biggest risk that you're looking at in the coming few quarters in the sale?
So as of now, we are not foresee any major challenges because, if any new thing comes up, we are not aware. But, last year we had this battery, compliance norms, which came in, means came up, and it was very stringent. So, if you ask me today, we don't have any major challenges to meet our targets.
Sir, just what is the duration of the short-term loan that you're taking that when are you planning to repay, timeline?
About five years, the period.
Okay. Thank you. Thank you.
Thank you. The next question is from the line of Aditya Chheda from InCred Asset Management. Please go ahead.
Yeah. Hi, sir. First, my question is on finance cost. There is an element of bank charges and commissions, which is quite significant. Can you highlight what is the nature of these finance costs that you report?
See, we have been availing new facilities. Total now working capital facilities, including term loan, we have about INR 1,517 crores. So the initial processing fee and upfront fees is one of the components. And whatever commission we incur, this is on the letter of credit and bank guarantees, which we issue to our vendors. So, and the third component only interest or finance cost is the LC discounting, which we incur. That is one of the major costs which we incur.
Got it, sir. My next question is, we have a slide on the subsidies in the presentation. Is any of those going to accrue, going to accrue to us? And if yes, can you describe the nature or quantify them?
We don't have any subsidies outstanding, because, as a OEM, we don't get the subsidy. It is, as per the same, two guidelines, the operating company, the owner of the bus will get the subsidy. And, all the subsidies which were due to us in the beginning of, the initial two contracts have been realized.
Right. My last question is, if for any delay in the delivery of the contracts which you would have-
...Would there be any penalty that would be levied on us because of the mismatch in the timeline of delivery of these buses?
So as of now, there's mutual discussions and agreements, and with the customers, end customers. We have not encountered any issues, significant issues relating to late delivery penalties. So our team continue to maintain very strong communication and relationship with all the stakeholders to ensure smooth and timely execution. And I think we have clarified in the past that it is mutually the adoption and transition to electric e-mobility is very, very innovative to STUs. And there is a scope between the end customer, which is STU and us, and they have to provide the depot space and power connection. And we have to set up the infrastructure and then start delivering.
So, for example, these major projects like Mumbai and MSRTC, there's a need to open up about 150-200 depots. So the STU's have to provide the depots and the, and the power connection, and accordingly, we, we'll be building up the charging infrastructure and start manufacturing and supplying buses based on the depot availability. So because of these reasons, if there are any delays, the timelines get extended accordingly.
Got it, sir. Thank you. That's it from my end.
Thank you. Next question is on the line of Anil, who's an individual investor. Please go ahead.
Hello? Yeah, this is-
Hello.
Anil. This is for me, Anil? Hello.
Yes, Anil, sir. Please go ahead.
Yeah. Hi, Mr. Sharat. How are you?
I'm fine, Anil.
Yeah. So you mentioned that term loan of INR 500 crore have been sanctioned and INR 200 crore already deployed. Do you expect the balance INR 300 crore to be deployed in next one quarter or one quarter?
Yes.
Is this will be deployed for the purpose of construction of new facility?
Yeah, yeah. See, it may not happen in one quarter, it may spill into two quarters. And its entire amount is for the purpose of new facility.
Okay. And so this will be sufficient for us to reach to the capacity of 5,000 buses per year?
Correct. You are right.
May I know, like, what's the increment in the number of employees now because of this new facility?
See, basically, we have been continuously increasing our headcount, and very senior people have joined in various functions to take care of the growth operations of the company. So, as far as the new plant is concerned, when we talk about manufacturing the buses, we outsource to reputed third-party operators, and we'll be able to increase the workforce as and when it is required. So we have a mix of very skilled, semi-skilled, unskilled labor workforce. So accordingly, based on the need, we increase our headcount.
Yeah, but what is the approximate headcount you are expecting on our payroll by end of this year?
As of now, I don't have the ready number. We have about 800 numbers as on today. It may extend up to 1,000+ by end of the financial year.
Okay. Thank you very much for replying and giving me critical details. Just one more question, like, I'm the person who was trying to visit the factory, and but I didn't get any approval to visit the factory. I'm not sure why you have shied away from not allowing me to go and visit the factory, which is state-of-the-art facility. You are building it up first of its kind in India. It should be a proud factor for us to share and show to the world that this is how we are executing the best of the best facility, and we are developing a, you know, world-class company.
Mr. Anil, Hanuman here. Actually, we have been receiving multiple requests from the multiple shareholders independently on different, different days. It is because now works are going on significantly. It is difficult to accommodate. That's the reason we couldn't accommodate individually. At appropriate time, maybe per group of, group of, request, requests, we may respond. Or else, any, in any case, in final inauguration, definitely people will be get invited. We are proud to be announced, and we... It's nothing to be shy there. At appropriate time, we'll come forward, and definitely we'll accommodate to your request. You kindly bear with us.
Yeah, I look forward to visit the factory and meet all of you.
Sure.
Wish all the best to all of you.
I'm sure whoever are going to request, whoever are interested, we will accommodate. But problem is, since the work is going on, accommodating individually for different, different dates to different, different people is a little difficult. Please, kindly understand, and finally, when the factory construction is completed, inauguration, everything, all you, you all people will be invited. No, no doubt in that. Please bear with us.
Thank you very much. We'll wait for the invitation. And just one more last question, like, why we are shying away from increasing the capacity at a rapid pace? Like, this is, this question I have been asking for the last one year. Like, we can see foresee a demand of, you know, 20,000 buses per year, delivery kind of a thing, coming to Olectra itself. So why we are just going so slow? Like, again, you know, entire this year, we'll be reaching only 2,000, next year we will be reaching 5,000 of that capacity, whereas we have 11,000 buses order right away now. Don't you think that we should speed up?
Because it's a technology driven and anything can happen, so we should make sure that we should take the first mover advantage and developing the capacity of 20,000 buses per year, at least in next two years.
Yeah, see, we have plans, as we have mentioned very clearly, 5,000 numbers, which is expandable to 10,000 numbers and in phases. And we have been very, very prudent in actually spending our CapEx. And, so if you have seen in the beginning, we have been getting orders and executing from a lease facility. Now that the production, the order book has ramped up significantly and then we are seeing a huge opportunity, we started building a new plant. So, and, so you are right. So we will definitely try to expand once we complete these phases of 5,000 numbers, achieve a milestone of 5,000 numbers by end of this financial year and scalable to 10,000 numbers.
It is, further expansions will be easily possible with a little bit of investments with regard to balancing equipment.
Thank you very much to all of you, and, best wishes from all of us from here. And, I hope you will continue to do the best performance hereafter also. Thank you very much.
Thank you so much.
Thank you. Next question is from the line of Mayank Gupta, who's an individual investor. Please go ahead.
Hi, good afternoon. Am I audible?
Yes, you are.
So my first question is about the CapEx. Are you planning any CapEx in another, another technologies like hydrogen? Because our Indian government is very bullish on hydrogen also. Nitin Gadkari has already said that they have future plans for hydrogen. So this is my first question: Do you have any CapEx in future for hydrogen? The second thing, there was a news that there was a penalty of INR 2.2 crore from Mumbai STU because of non-delivery. So which part of balance sheet covers that penalty, if it's already been paid? Also, how do you look at it on the future prospects? Like, do you think it is a threat to the order book, future order book, the other STUs, because they always go by the reference of the last deliveries and penalties.
So because this is almost 2.5% on your EBITDA, so, INR 2.2 crore is a huge number. And second thing is, these kind of penalties, how do you think that, will it benefit our competitors like Force Motors and Tata, going forward, that, like, our future order book can go to these competitors? How we as a company looking at these things, these penalties and protecting our order book? And third is, you know, the last investor plant visit. So we definitely want to visit the plant, which is, a big plant you are already setting up, and the capacity will be 10,000 buses in the future. So these are my three questions. First is on CapEx on other technologies like hydrogen.
Second is about the penalty, which was in the news at INR 2.2 crore. And third is about the plant visit, which you have already answered. You don't need to visit to answer the third question. Thank you very much.
Yeah. See, as of now, we don't have any other CapEx plan for other technologies, like hydrogen. We are now, as we have, I think, clarified in the earlier questions, focusing on completing the delivery of the existing order book of electric buses and then introducing various platforms, various products within the EV, E-buses segment, and we are focusing on the electric e-buses. So coming to the penalty, which you are referring to. So our customer, which is Evey Trans, is in negotiation and discussions with the end customer to waive off these penalties.
As you are aware, as I've clarified earlier, because of various constraints and supply issues in the last year, there were delay in deployment of the electric buses. Now that we have discussed and agreed and started delivering more number of buses.
Okay. And, how do you, how do you see this?
The amount involved is not a material amount in terms of, when you look at the overall, numbers.
Okay. And how do you think this is a threat on the future order book? These kind of news, which when it comes in the public from the competitors. It's pouncing on these kind of new customers or order books. Will it be a threat on our future order book when these kind of news comes out that we are not delivering on time and there is a delay, and STUs are planning to put penalties, though we may negotiate with them in future?
See, so one important, basically the advantage of Olectra product is, we have demonstrated our strong technology product, and our product in terms of performance has been way ahead compared to any product delivered by the competitors.
Okay.
And we have done trials across the entire rest of the country with various STUs. We operate in about more than 11 states and more than 30 cities. So our product speaks about by we deliver a very very highly very high quality product and our performance has been demonstrated. So this is the main advantage we have. So, and our end customer will be very happy to actually take the product from us.
And also when it comes to deliveries also, we are leading in the market. And also, and also, if you see when compared to any of the competitors, none of them having this much large facility of 150 acres, which only for electric buses, especially for electric buses. We are in the phase of building that, and once it is done, so we will be delivering the buses in a much faster way, and you will witness the same. And none of the competitors, as you know, are planning for this much big facilities.
Thank you, sir. Thank you very much.
Thank you. Next question is from the line of Kunal, who's an individual investor. Please go ahead.
Hi. Thank you for the opportunity. I have primarily two questions. One being, you guided to deliver about 300 odd buses this quarter. Am I correct?
Yes. Coming quarter. Yes, correct. Yes, you are right.
So you passed half the quarter, so I mean, you might have already sort of delivered 150 buses in the quarter in the one and a half months, right? We already passed almost halfway through this particular quarter. So I'm assuming that you've delivered half of that already, correct?
See, day-to-day or quarters or month-on-month, breakup, we've not been in a position to provide, it's been price sensitive also.
No, I understand. Where I'm coming from, sir, is, I mean, it's—I'm sorry to harp on the same point, but I mean, again and again, every quarter, you guide for a certain number, and you always under-deliver. So I am just trying to sort of gauge if this number holds true. That was my question number one. Question number two is, if you go and deliver as per your indicated guidance also, which is 1,500 this year, you said 5,000 next year, and couple of thousand after that, you are developing a 5,000-10,000 bus capacity at your new plant, which you're spending a lot of money for. If you can give us some visibility of what you do after 2027, where do you see these orders coming from? How big can these orders be?
Because, you know, if you can just relate or rather help us understand the quantum of these orders pertaining to how much you've got over last year, we'll be able to get, gauge something in terms of how this demand is gonna come, where this demand is gonna come from, so that your capacity is busy. Thank you.
Yeah. See, as far as the immediate tenders which are in pipeline, about almost 10,200 number of buses, tenders are in pipeline. And going forward, we will see more number of tenders coming up. And the tenders which we have quoted as a company is about 1,100 buses, where NMC, North Western Karnataka and Metropolitan Transport Corporation, these are three tenders where we have participated. And the new tenders which are likely to come up is about 10,010 in numbers. This is the immediate visibility, but the Ministry of Heavy Industries and they have announced conversion of about 800,000 buses to EV or clean technology buses by 2030.
The next 10 years, we are going to see a big, significant jumps in the conversion of the traditional ICE engine buses to EV and other clean technology buses.
So I understand that, the macro is great, and, I mean, we definitely have a tail end. The government intention is to do that. But, I mean, going by how it's been over the last 3-4 years, how do you see that ramp up coming through? Because if tomorrow these tenders get delayed, your factory becomes empty, to that extent. Because, I mean, as per your guidance, you'll finish your deliveries in 2027. Is what I'm saying. And if you bid for 1,500 buses, over the next two years, if you don't get a 10,000-bus order, then you are technically going to be at sub-utilization, which is going to cost you your margin, right?
Yeah. So, Mr. Vineet, basically, this is a STU market, which we are talking about. There's a huge private market which is opening up. Okay, if you look at that opportunity, and we started delivering buses to private players. And once the private things picks up, then we have been also working on other applications like the staff and other buses. And orders will not be a concern at all, and because the tenders keep coming in, and as we have demonstrated by way of delivering a very, very high quality product, we expect definitely advantage. We are pioneers in this e-buses, so we have an advantage of, I think, getting orders.
Keeping in mind the future order potential is what the reason why we have acquired 100 acres of land and starting building a new plant.
Sure. Like I asked my first question, if you can give us some sense about the confidence of delivery, sir, because you mentioned again and again, every quarter, but you always under-delivered. I mean, as investors, we would just want to be assured that you're going to stick to your guidance, because, I mean, like you said, eventually, of course, there are battery norms, et cetera, which hurt you last year. But if it's all behind you, then, I mean, if you stick to 1,500, what you're saying on this call, we would be sort of appreciative of that fact.
Definitely. Thank you very much. We are definitely confident of achieving 1,500 numbers this year. Thank you.
Thank you. The next question is on the line of Sanjay, who's an individual investor. Please go ahead.
Hello, good evening. Am I audible?
Yes, sir.
Yes.
Yeah, first of all, congratulations on a great, great set of numbers that you have guided for subdued quarter last time. So it's a great work, and, you guys are really doing amazing work, I mean, the kind of, work you are doing it. I understand that we have some challenges in, maybe you're starting a new plant, and that's why probably the delay in, picking up delivery of, buses. I just want to understand exactly what-- Are you running now parallel? Is the old plant still working, or you've completely shifted to the new plant? That's the first question. And, as of August now, August 2024, are you now, the capacity is now already 200 buses per month, or it will be starting from next month?
So to answer the first question, we have vacated our lease premises. So we are operating only from the new plant now. And from next month onwards, we will have a capacity ready for about 2,200 numbers.
Oh, that's it. So from the next month, from the September month, you will be having a 200-bus capacity delivery. That's what you are targeting?
Right. Yeah.
Just one observation on your, in your presentation, and in the slide number 14, Number of Vehicles Sold. So there is probably a slight error. It is showing 156 buses for last Q1 2024, and 78 buses is shown for Q1 2025. So you may want to just correct that. All right.
No, no. Actually, it's mentioned Q1 2025, only 156.
Yeah. There's a color code that shows, 70 buses for Q1 2025 and 156 buses for Q1 2024.
Maybe, I mean, that's, that's a small thing.
Yeah, sure, sure.
Yeah.
I'm wishing you all the best. Thank you.
Thank you so much.
Thank you. Next question is on the line of Sunil, who's an individual investor. Please go ahead.
Good evening, everyone.
Good evening.
Are you able to hear me? Yeah. So my question is regarding what is our plan on the QIP for raising the funds?
See, as of now, we are yet to decide. At an appropriate time when the management decides to raise funds, we will come back to the investors and inform accordingly.
Okay. There is no plan as of now, like, you know, in the coming quarter or coming financial year, we'll be raising the funds?
Yes. As of now, there's no plans.
Yeah. And my second question is regarding... Yeah, I previously have asked this, but, regarding the hydrogen vehicle, like previously, we tied up with Reliance Industries, like, you know, to develop the hydrogen vehicles. So is that R&D going on, or we are not doing any R&D part of developing the hydrogen buses or something like that?
As you are aware, this technology is at a very nascent stage. We have decided now not to pursue this hydrogen fuel for the immediate future, considering the current economic viability. As we are having huge order book of electric buses, we are now focusing on completing the deliveries. This pause also will allow us to focus on more economically viable solutions while maintaining our commitment to innovation and sustainability.
Okay, fine. Thanks, sir.
Thank you. Next question is on the line of Ritwik Ram, who's an individual investor. Please go ahead.
A very, a very good evening, sir. So in the Q1 of FY 25... You can hear me, sir?
Yeah, yeah, very clear.
Yes, sir. So, my question is regarding the composite insulator business, any plans to sell the business in the next five years to or focus on the new e-bus business, the manufacturing of e-vehicle business?
So as of now, we don't have any intentions to divest insulator business. Insulator business, as such, we treat it as a cash cow, so it is, and we are market leaders. We are pioneers in introducing the technology. We have about close to 45%-50% market share, and we are introducing new products, and we are targeting a turnover of about INR 200 crore this year, against 140-
What's the profit? What is the profit we are targeting for, from the composite insulator business?
We have very, very high operating margins, more than 15% operating margins.
Okay, sir. And you have answered my question regarding the fines. So hopefully, MSRTC will waive off the INR 2 crore fines on the order of buses. My question to you is, sir, so you have got an order of 10,000 buses, so by FY 2026, you'll clear all the orders, right?
We have actually timelines about 18 to 24 months, depending on project to project, project to project. We are targeting to complete this existing order book by 2026, 2027.
Yes, and I've gone through the online, one of the online websites which publishes the monthly orders of e-buses by e-manufacturers. So I've, and as per the details on the third-party website, Olectra has manufactured 65 buses as of July 2024, and whereas Tata Motors has manufactured over 250 e-buses in July 2024. Any comments on that part, sir? I got this information from a third-party website.
I think, maybe you are referring to the Vahan portal. So, as far as Vahan portal is concerned, some of the states are not updated, to which we have supplied. And, the other thing is, there is a timeline. As an OEM, we manufacture and deliver the bus, to the operating company, and the operating company, takes, some time to register the buses. So there's a timeline between delivery and registration. So obviously, the numbers are, not, very accurate, and some of the states are not registered in the Vahan portal. So these could be the two reasons why you are, not seeing the numbers.
Okay, because Tata has a higher manufacturing capacity, because I was surprised to know Tata manufactured over 200 and 250 e-buses last month. And my last question is, in the news, it came in the, in Bengaluru, so that a JBM Auto e-bus burst because of the, because of, the Bengaluru flooding. Any opinion on that, sir? And is Olectra prepared to overcome such future measures in case of flooding? The battery will explode because of, instability due to monsoon rains, the rainfalls. Any opinion on that, sir?
Actually, we are not aware of that, and we cannot comment on based on one incident. Any kind of incidents can happen in any technology, not only EV. In ICE engine buses also there are many incidents, so... And, we are actually manufacturing using the technology, which is the most safest.
Yes, because,
Our technology is LFP, LFP battery, and, and in LFP batteries are the most safest batteries available in the current world, and we are, we have, we have not seen any such incidents with Olectra buses.
Okay. So, rainfall also the batteries, the battery is safe in case of heavy downpour, because there's been heavy downpour across Mumbai and Bengaluru cities.
Yeah, actually, most of our buses are operating in Mumbai, okay? And then, we have delivered our first buses in Himachal, which is in terms of very, very difficult terrain, about 25 buses in the year 2017-18. Till now, we have not faced any incident nor issue. And since 2017, we are operating our buses in Mumbai through the floods and other regions also. And also, we are the only OEM who have operated during the COVID days also in Mumbai, in the floods also. We haven't faced any issues with the batteries in rains and other things also, because all the batteries are certified with the IP65 and IP66 standards, so there will be no issue.
It's LFP battery, right? You mentioned LFP.
Yes, LFP.
What's the full form, sir?
Lithium ferro phosphate.
Lithium ferro phosphate. One last question, sir. Are you going to do a physical AGM instead of an online AGM, sir, at the new facility, sir? We would like to visit the facility, sir. Any chance that you will do a physical annual general meeting, at least for this financial year?
We are yet to decide the AGM date and venue, Ji. Maybe we will consider this.
Can we do it physically? My, that's my request, sir.
I think it should be virtually only, because virtually is the one have advantage to everyone can participate. Right now, we have approximately 500,000 shareholders. Everybody can't come to the meeting physically. We understood you want to see the... You want to visit the factory. At appropriate time, once the factory is constructed, we will announce that, that obviously the shareholders are invited for that.
Okay, sir. Thank you very much, sir. I have been with Olectra since September 2017, and I enjoyed the run in Olectra.
Thank you.
Thank you very much, sir.
Thank you. A reminder to the participants, that you may press star and one to ask a question. The next question is from the line of Chandramohan, who is an individual investor. Please go ahead.
Hello?
Hello.
Hello.
Yeah, please go ahead.
I would just like to ask, as is the practice in auto industry, why can't we have these monthly figures? Hello?
Hello.
Can you repeat? Can you repeat the question?
Yeah. As is the practice in auto industry, why can't we have the monthly figures, sales figures?
Noted that. Maybe in coming future, we'll consider that.
I think you need to consider that at the earliest.
Noted. Yeah.
Thank you. Thank you. That's all.
Thank you. Next question is a follow-up question from the line of Sanjay, who's an individual investor. Please go ahead.
Yeah, thank you for the opportunity. I just want to know about Q1 numbers. So what percentage of the Q1 FY 25 revenue is coming out of maintenance of the vehicle and what percentage is coming from the sale of the vehicle?
Just give me a question, a second.
You want me to repeat the question?
No, no. See, basically, one minute, I'll tell you the maintenance part, maybe about, if you look at the CNN, INR 13 crore. It's about 5%-6%.
36% of the revenue is coming from the maintenance of the vehicle?
No, no, 5%-6%.
Oh, okay. Because you have already sold more than 1,800 buses, and so its maintenance will be generating some revenue, right, per quarter?
Yeah, maintenance also will generate for the entire product duration.
Right. So is that going to be only 5-6% of the revenue? It will be more, as 1,800 buses already delivered.
The overall, as we progress, it could increase to more than 10%.
Okay. Okay. Okay, yeah. Thank you very much, and wish you all the best.
Thank you.
Thank you. That was the last question for today. Sir, would you like to give any closing comments?
Yeah. We thank all the shareholders who have participated and have been very supportive in your company's growth journey, and the patience and the faith reposed in the company. Thank you all.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.