Olectra Greentech Ltd Management Discussions

A) Electric Vehicles (E Buses and E Tippers)

Industry Structure and Developments

The electric bus (e-bus) segment is witnessing robust structural evolution globally. This growth is anchored in the rising preference for cleaner mobility, driven by urbanization, environmental imperatives, and proactive policy measures. Buses remain the backbone of public transportation in most nations, and electrification of this mode is pivotal to achieving decarbonization targets and enhancing urban air quality.

Global Landscape

The global transportation sector is a major contributor to greenhouse gas (GHG) emissions, and electric buses are emerging as a critical solution to mitigate this challenge. International frameworks such as the Paris Agreement, Kyoto Protocol, and recent resolutions from COP28 and COP29 have heightened pressure on governments and businesses to accelerate the adoption of clean transportation. Innovation in battery technologies, integration of intelligent transport systems, and the emergence of scalable charging ecosystems have collectively strengthened the viability of electric buses in mass transit systems worldwide.

Indias Electric Bus Transition

Indias electric mobility sector is undergoing a transformative phase, supported by a convergence of strong policy support, technological advancement, and socio- environmental priorities. The country has witnessed steady adoption of electric buses across both metropolitan and tier-2/tier-3 cities, reflecting an overarching shift toward sustainable urban development.

Key macroeconomic indicators, including projected GDP growth of 6.3%-7.0% for FY25, underscore a conducive investment climate. Within this setting, electric buses offer a compelling value proposition-lower total cost of ownership (TCO) compared to diesel or hybrid alternatives, reduced operational and maintenance costs, and significant emission savings.

The governments continued emphasis on electrification of public transport is evident through a series of major initiatives:

FAME-II Scheme: Capital subsidies for e-bus procurement and charging infrastructure.

PM-eBus Sewa Scheme (2023):

Targets the deployment of 38,000 electric buses by FY2028-29 through PPP models, backed by a Payment Security Mechanism.

National Electric Bus Programme (NEBP): Supports state-level adoption via the Gross Cost Contract (GCC) model.

PM E-DRIVE Scheme (2024):

Integrates electric buses into the Smart Cities framework. 2,000 crore allocation for the development of 72,000 public charging stations, enabling rapid scaling of infrastructure along major transit corridors. Cities like Bengaluru, Hyderabad, and Pune are pioneering this transformation, setting up dedicated charging ecosystems that support high-volume e-bus operations.

Structural Drivers of Growth

Several trends continue to propel the Indian e-bus industry:

Urban Population Growth: Rising demand for high-capacity, low-emission transport solutions.

Rising Fuel Costs: Diesel prices continue to escalate, strengthening the economic case for electric buses.

Environmental Awareness: Increasing public and institutional commitment to climate resilience and air quality.

Technological Advancements:

Enhanced range, faster charging, and improved battery safety-exemplified by innovations like Blade Battery Technology.

With only six electric buses per million people in India, compared to a global average of 85, the sector remains significantly underpenetrated. This gap presents a massive opportunity for OEMs to scale operations and drive mass adoption.

Olectras Strategic Positioning

Olectra Greentech Limited is uniquely positioned to lead this transition. With a focus on indigenous manufacturing and deep R&D partnerships-including with BYD for Blade Battery-powered electric buses offering up to 500 km range on a single charge-the Company is aligned with Indias roadmap for zero-emission mobility.

Industry Outlook

The Indian electric bus segment stands at the point of a multi-year growth cycle, driven by a convergence of supportive policies, compelling economics, and rising environmental consciousness. With the governments continued push toward green mobility and rising adoption across both public and private domains, the outlook for the sector remains robust and structurally sound.

According to CareEdge Ratings and industry estimates, the Indian electric bus market is expected to grow from USD 1.17 billion in 2025 to USD 2.48 billion by 2029, representing an impressive compound annual growth rate (CAGR) of 20.66%. Correspondingly, annual sales volumes are projected to increase nearly fourfold- from approximately 4,700 units in FY24 to over 17,000 units by FY27. This growth underscores the sectors transformation from a nascent market into a mainstream component of the national transportation infrastructure.

Several structural and recurring factors are converging to catalyze this trajectory:

Favourable Total Cost of Ownership (TCO): The lifecycle cost of owning an electric bus-particularly air-conditioned models-is now 15-20% lower than that of diesel-powered alternatives. This economic advantage is reshaping procurement strategies among State Transport Undertakings (STUs) and fleet operators.

Proven Viability of the GCC Model:

The Gross Cost Contract (GCC) structure, which operates on a pay-per-kilometre basis, offers risk mitigation and predictable cash flows for transport authorities. It has become a cornerstone model for e-bus deployment across various states.

Rising Penetration in Tier-2 and Tier-3 Cities: While initial adoption was concentrated in metros, growing awareness and falling cost barriers are accelerating demand in smaller urban centres. This geographic diversification will be critical to the next phase of market expansion.

Surging Institutional Demand: Private sector enterprises, educational institutions, and fleet aggregators are actively investing in electric mobility solutions to align with ESG commitments, regulatory expectations, and internal decarbonization goals.

Strengthened Policy Support:

National initiatives such as PM-eBus Sewa, and PM E-DRIVE continue to offer direct subsidies, operational support, and infrastructure facilitation, laying a strong policy foundation for long-term growth.

Expanding Infrastructure Backbone:

Parallel investments in charging depots, grid readiness, and energy storage solutions are enabling seamless integration of e-buses into public transport systems.

Within this promising industry landscape, Olectra Greentech Limited is strategically positioned to capture significant market share. With a cumulative deployment of over 2,668 electric buses across multiple Indian states and smart cities, the company continues to demonstrate proven execution capabilities, operational scalability, and technological leadership.

Backed by a forward-integrated business model and a differentiated product portfolio-including advanced Blade Battery Technology and long- range intercity variants-Olectra is well poised to lead Indias e-mobility revolution and unlock sustainable value for all stakeholders.

Opportunities

Olectra Greentech Limited stands at the forefront of Indias transition toward sustainable public transport. Several emerging trends and strategic initiatives provide the company with strong growth levers in the electric bus segment:

a) Expanding Market Penetration

Despite increased adoption, electrification within State Transport Undertakings (STUs) remains partial, and penetration in rural and semi-urban regions is minimal. This leaves a vast untapped market. With a proven track record of product performance, Olectra is strategically positioned to expand its presence by leveraging its broad product portfolio and strong reputation for reliability.

b) Growing Institutional and Private Sector Demand

A rising number of corporates and urban local bodies are incorporating electric mobility into their transport ecosystems. Organizations such as Microsoft and several municipal corporations are engaging with Olectra for staff mobility and last-mile connectivity. The increasing emphasis on Environmental, Social, and Governance (ESG) standards is expected to accelerate this trend, offering long-term partnership opportunities.

c) Strategic Alliances and Technological Edge

Olectras extended strategic alliance with BYD, one of the worlds foremost electric vehicle technology leaders, has been renewed through 2030. As part of this collaboration, Olectra is introducing BYDs advanced Blade Battery technology, known for:

> Exceptional safety (fire-resistant and explosion-proof)

> Lifecycle of over 5,000 charge cycles

> Superior space and energy efficiency

> Fast-charging capabilities

> Environment-friendly components

These features are expected to set new benchmarks in passenger safety and vehicle performance.

d) Localization for Cost and Supply Chain Advantage

The company is pursuing continuous localization for battery pack assembly and key components, enhancing cost efficiency and reducing dependency on global supply chains. This initiative also aligns with the governments Make in India objectives, reinforcing Olectras long-term sustainability.

e) Strong Order Pipeline and Capacity Expansion

With a confirmed order pipeline of approximately 10,000 electric buses, and plans to scale up manufacturing capacity to 5,000 units annually by FY26, Olectra is well-poised to lead Indias shift to clean public transport systems.

Segment-wise Performance

a) Product Portfolio & Deployment

Olectra offers a diversified and scalable product portfolio catering to diverse transport needs across intra-city and inter-city routes. The electric bus range includes variants in 7-meter, 9-meter, and 12-meter configurations, ensuring flexibility and relevance across use cases.

As of March 31,2025, the company has:

> Deployed over 2,668 electric buses across key metropolitan regions and STUs

> Achieved a cumulative operational mileage exceeding 1 crore kilometers per month, underscoring operational efficiency and reliability

> Played a significant role in mitigating urban air pollution through the adoption of zero-emission transportation solutions

b) Technological Advancement

To address evolving efficiency and safety standards, Olectra is working on Battery Bus, incorporating BYDs advanced battery platform. This development ensures:

> Longer range per charge

> Enhanced passenger and vehicle safety

> Improved energy density and system longevity

These features not only upgrade product quality but also support Olectras efforts in fleet scalability and total cost optimization for operators.

c) Market Leadership

Olectra continues to maintain its market share of approximately 25% in Indias electric bus segment as of FY25. This leadership is attributed to:

> Consistent focus on durability, safety, and energy efficiency

> Comprehensive after-sales service network including predictive maintenance analytics to reduce downtime

> Strategic partnerships with public and private stakeholders, ensuring deep market engagement

4. Risks, Concerns, and Threats

Despite strong policy tailwinds and increasing demand for electric mobility solutions, particularly electric buses, the segment remains exposed to a variety of structural, financial, and operational challenges. The electric bus industry is inherently dynamic and capital-intensive, with evolving regulatory frameworks and competitive pressures. Olectra Greentech Limited continuously monitors these risks and adopts proactive strategies to mitigate their impact, ensuring business resilience and sustainable value creation.

a) Capital Constraints for OEMs

Electric bus manufacturing demands significant capital outlays for research and development, precision engineering, advanced manufacturing tools, and skilled manpower. Original Equipment Manufacturers (OEMs) like Olectra must frequently invest ahead of demand, which may lead to liquidity constraints, especially during periods of rapid expansion or economic downturns. The ability to secure timely financing remains a critical enabler for scaling operations and maintaining technological competitiveness.

b) Delayed Payments from STUs

Under the Gross Cost Contract (GCC) model, some portion of Olectras business involves long-term contracts with State Transport Undertakings (STUs). Many of these entities operate under financial stress, leading to delays in payment cycles. This creates a mismatch between receivables and operational cash flows, potentially impacting working capital efficiency and liquidity.

c) Intense Price Competition

The tender-driven nature of public procurement, particularly in the GCC model, fosters aggressive bidding by multiple players. This environment exerts downward pressure on pricing and can lead to margin erosion. While competitive pricing is necessary to secure market share, sustained profitability requires a delicate balance between cost optimization and value-added differentiation.

d) Supply Chain Disruptions

The EV industry remains partially dependent on imported components such as lithium- ion battery cells, semiconductor chips, and electronic control systems. Geopolitical tensions, trade restrictions, and global supply chain disruptions-especially those involving critical raw materials-pose risks to timely production and delivery. Volatility in international freight and procurement costs further adds to supply chain complexity.

e) Talent and Technical Skills Gap

EV systems are complex and require technicians proficient in software integration, electric drivetrains, diagnostics, and high- voltage safety protocols. The availability of such specialized talent is limited.

f) Intensifying Competition

The electric mobility sector is witnessing increasing interest from established automotive players, multinational OEMs, and domestic conglomerates. This intensifying competition challenges existing players on multiple fronts-price, innovation, turnaround time, and customer service. The influx of new players could also lead to shorter product lifecycles and higher R&D expenditures.

Risk Mitigation Strategy

Olectra Greentech Limited continues to reinforce its market share through the following strategic levers:

Technology Differentiation: Deployment of proprietary battery and drivetrain systems to enhance performance and lifecycle efficiency.

Customer-Centric Support: Comprehensive after-sales service network including predictive maintenance analytics to reduce downtime.

Institutional Trust: Long-standing association with key STUs and government bodies, built on a consistent record of quality and reliable service delivery.

These practices ensure early detection of emerging risks, prompt corrective actions, and effective business continuity planning safeguarding long-term shareholder interests.

B) Insulators Industry Outlook

Insulators Industry Overview

Indias power sector continues to be a cornerstone of national infrastructure development, underpinned by significant policy support, technological upgrades, and growing electricity demand. FY 2024-25 marked another year of strong growth across generation, transmission, and distribution, reinforcing the countrys position as a global leader in energy capacity expansion. Indias power sector has witnessed significant growth in FY 2024-25, driven by increased electricity demand, substantial capacity additions, and a strong emphasis on renewable energy integration. As of March 31,2025, Indias total installed power generation capacity reached 475,211.80 MW, marking a significant milestone in the nations energy infrastructure development (Source: Power Generation Capacity)

The sector-wise and type-wise breakup is as follows:

• Fossil (Thermal Power): 246,935.47 MW

• Nuclear: 8,180 MW

• Large Hydro: 47,728.16 MW

• Renewable Energy Sources (RES): 172,368.17 MW

The countrys power generation rose by 5.41%, producing 1,378.42 billion units between April and December 2024, compared to the same period in the previous year. This growth underscores the sectors resilience and the effectiveness of policy measures aimed at enhancing energy availability. (Source: Power Generation Rise)

Indias peak electricity demand in FY 202425 rose to 2,56,530 MW, up from 2,43,271 MW in the previous fiscal. This 5.5% increase demonstrates the growing need for consistent, high-quality power supply across sectors such as manufacturing, urban residential zones, IT parks, and electric mobility infrastructure. The rising demand places increased pressure on transmission systems and substations, thereby amplifying the need for reliable, high-performance electrical insulators to ensure operational stability and safety. (Source: Peak power demand 2025).

The Central Electricity Authority (CEA) has outlined an ambitious plan to overhaul Indias transmission infrastructure by 2027, with an estimated investment of 4.25 trillion (~$50.55 billion). This plan includes the addition of 114,687 circuit kilometres (ckm) of transmission lines and 776,330 MVA of transformation capacity at 220 kV and above. (Source: Transmission Infrastructure)

These massive infrastructure upgrades significantly boost the demand for porcelain insulators, line insulators, and hollow-core insulators. Composite insulators, due to their lighter weight, ease of installation, and superior resistance to environmental degradation, are becoming the preferred choice in both new installations and retrofit projects.

Insulator Market Outlook

The market for insulators remains segmented between porcelain, glass, and composite types, with composite insulators gaining increasing adoption due to their lighter weight, pollution resistance, and mechanical strength. According to Global Market Insights, the global electric insulator market is expected to reach US$ 20.8 Billion by 2033, growing from US$ 13.6 Billion in 2023 at a CAGR of 4.4% (Source: www.gminsights.com). Within this, composite insulators are projected to grow from US$ 2.4 Billion in 2023 to US$ 4.4 Billion by 2033, at a CAGR of 6.9% (Source: Composite Insulators Market

Forecast 2024-2033).

In India, the electric insulator market is projected to grow from US$ 438.6 Million in 2024 to US$ 844.3 Million by 2033, at a CAGR of 6.59% (Source: Global Industry Reports India Electrical Insulators Outlook).

2. Opportunities

2.1 Government Initiatives

Programs like the National Electricity Plan (NEP) and the Integrated Power Development Scheme (IPDS) have led to significant investments in power infrastructure, boosting the demand for electric insulators.

Green Energy Corridor (GEC) Phase-

II: The Government of India has sanctioned the implementation of the Green Energy Corridor Phase-II (GEC-II) project to strengthen the transmission infrastructure for renewable energy. This project is pivotal in integrating renewable energy into the national grid and achieving long-term energy security.(Source: Green Energy Corridor Inter-State Transmission System).

Intra-State Transmission System (InSTS) GEC-II.

In addition to the inter-state transmission system, the government is implementing the Intra-State Transmission System under GEC-II. This initiative aims to facilitate the integration of approximately 20 GW of renewable energy into the intra-state transmission networks. (Source: Green

Energy Corridor Intra-State Transmission System)

2.2 Renewable Energy Integration:

Indias ambitious transition towards renewable energy with targets like 500 GW of non-fossil fuel-based power capacity by 2030 is driving the need for large-scale grid upgrades and expansions. Wind and solar power projects are typically located in remote regions (e.g., deserts, hills, offshore areas), far from consumption centres. This necessitates:

• New transmission lines (both intra-state and inter-state)

• Grid interconnections with variable generation points

• Reliable insulation solutions capable of handling fluctuations, weather exposure, and long distances

2.3 Urbanization and Industrialization:

Rapid urban growth, smart city development, and the expansion of industrial corridors are significantly increasing the electricity load demand across India and other emerging markets.

To meet this surge, governments and private players are:

• Upgrading aging infrastructure

• Installing new substations

• Expanding underground and overhead transmission & distribution (T&D) networks

These developments require insulators with high reliability, compact size, and long service life to ensure uninterrupted supply and grid stability in densely populated or industrial zones. Composite insulators, due to their compactness, safety, and ease of installation, are increasingly preferred in such applications.

2.4 Export Potential: Indias cost-competitive manufacturing and quality standards position it as a potential export hub for electric insulators. This export potential is strengthened by government policies like Make in India for the World, free trade agreements, and increased international collaborations. Indian insulators are being recognized not just for cost-effectiveness but also for long-term reliability and adaptability in diverse operating environments.

2.5 Technologically advanced insulators Development of Hollow Core Insulators for Substation Applications.

Olectra is ambitious to develop composite hollow core insulators for substation applications through technical collaboration with leading international manufacturers. Hollow core insulators are highly efficient components capable of handling large volumes of electricity rapidly and reliably. While their initial procurement cost may be higher than that of conventional insulators, they offer substantial advantages in terms of mechanical strength, electrical performance, and reduced maintenance needs, especially in high-voltage environments.

From a long-term perspective, these insulators deliver superior reliability and lifecycle cost efficiency, making them a strategic investment for modern substation infrastructure. The industry is increasingly shifting its focus from upfront capital costs to total cost of ownership, recognizing the long-term operational benefits that composite hollow core insulators provide.

3. Risks and Challenges

3.1 Raw Material Price Volatility:

The manufacturing of electric insulators depends heavily on key raw materials like silicone rubber and Fibre-Reinforced Plastic (FRP). These materials are susceptible to frequent price fluctuations due to:

• Global supply chain disruptions

• Commodity price swings

• Geopolitical tensions (e.g., trade restrictions, war)

• Fuel and energy cost changes

Even a small rise in raw material prices can significantly impact production costs, squeezing profit margins-especially in bulk tenders where pricing is locked for long durations. This forces manufacturers to either absorb losses or risk losing competitiveness.

3.2 Quality Concerns:

The insulator market has witnessed a rise in substandard products, particularly from the unorganized sector. Such quality failures lead to equipment breakdowns, power outages, and increased maintenance costs. For utilities and infrastructure developers, this also affects the reputation and trustworthiness of the supply chain, making it a serious industry-wide concern.

3.3 Project Delays:

A large portion of insulator demand in India is linked to government or public sector EPC (Engineering, Procurement & Construction) projects. These projects are often delayed due to:

• Land acquisition issues

• Environmental clearances

• Funding delays

• Administrative bottlenecks

Such delays result in postponed deliveries, uncertain cash flows, and inefficient capacity utilization for manufacturers. Even when tenders are won, the delayed implementation affects planning, inventory, and revenue recognition.

Risk Mitigation: Olectra has strengthened its supplier base and focused on export diversification. Quality advocacy campaigns are being run with customers like PGCIL and DISCOMs to emphasize lifecycle cost savings of insulators

4. Segment-wise Performance

The composite insulator segment continues to emerge as the fastest-growing market within the broader electric insulator industry, both globally and in India. Composite insulators have gained considerable traction across transmission and distribution (T&D) networks due to their superior mechanical and electrical insulation properties, especially under extreme environmental conditions. Their structural benefits include:

• High mechanical strength-to-weight ratio

• Resistance to UV degradation, corrosion, and pollution

• Reduced risk of breakage during handling and transport

• Longer operational life with minimal maintenance

These attributes make composite insulators an ideal choice for high-voltage transmission lines, particularly in renewable energy corridors, coastal zones, industrial belts, and high-pollution areas.

Export Market of insulator segment has been expanded to new regions by securing new orders for utilities in South Asia (Nepal) and Strengthened our presence in Africa (like Niger, Mozambique, Malawi, Tunisia).

In FY 2024-25, this segment witnessed substantial growth driven by Increased deployment in upgraded and greenfield T&D infrastructure projects under Government of India schemes such as Green Energy Corridor Phase-II and RDSS and Strategic adoption of composite insulators by private

EPC players for their low-maintenance and high-performance characteristics.

This shift has allowed the company to scale up its production and improve operational efficiency. Financial and Operational performance

Olectra has firmly established itself as one of Indias largest and most trusted manufacturers of composite insulators. The company s integrated capabilities from product design to manufacturing enable it to serve dynamic market needs with superior quality.

During the year under review, the performance of insulators segment has witnessed superior growth and the Company was able to record a Net Turnover of Rs. 18,010.83 Lakhs reflecting a 25.90% year-on-year growth, up from Rs. 14,297.12 Lakhs in FY 2023-24.

C) Discussion on Financial Performance and Operational Performance;

The net sales of the Company were Rs. 1,76,305.86 Lakhs in FY 2024-25 against the Rs. 1,11,397 Lakhs in FY 2023-24. The Compan/ s net profit was Rs. 13,956.48 Lakhs for FY 2024-25 as compared to Net Profit of Rs. Rs. 7,364 Lakhs for the FY 2023-24.

i) Internal Control systems and their adequacy

The internal audit, other financial systems, controls and checks in the Company are considered adequate and commensurate with the size and nature of operations providing sufficient assurance about safe guarding of all assets, authorizing transactions, recording and timely reporting.

ii) Material Developments in Human Resource/Industry Relations front, including number of people employed

Industrial relations are good and harmonious. The Company recognizes the importance and contribution of human resources for its continued growth and development. As on 31 st March, 2025, the Company has a total strength of 724 permanent employees.

Details of significant changes (i.e. changes amounting to 25% or more compared to the previous financial year) in key financial ratios are as follows:

Financial Ratio	Formula used	Standalone		Change (%)	Reasons for Change
		FY 2024-25	FY 2023-24
Interest Coverage Ratio	EBIT/ Finance cost	4.96	3.34	48.50%	The increase on account of increase of EBIT.
Current Ratio	Total current assets/ Total current liabilities	1.72	2.03	-16%	The movement in current ratio is mainly due to Increase in Trade Payables and other current liabilities during the current financial year compared to the previous financial year.
Debt service coverage ratio	Earnings available for debt service ( i.e PAT+ Depreciation+ Interest+ Loss on sale of assets)/ Debt service (Interest+Principal repayment during the year)	29.78	16.34	82%	The DSCR has improved during current financial year due to increase in PAT compared to previous financial year.
Debtors Turnover Ratio	Revenue from operations / average Receivables	2.94	1.95	50%	The increase in trade receivables turnover ratio during current financial year due to increase in realisation of trade receivables as compared to previous financial year.
Inventory Turnover Ratio	Cost of Materials Consumed and changes in inventories and work in Progress / Average Inventory	5.28	4.57	16%	The increase in Inventory turnover ratio during current financial year due to decrease in inventory holding levels as compared to previous financial year.
Operating Profit Margin (%)	EBITDA / Revenue from operations	14.87%	15.08%	-1.39%	Not applicable
Net Profit Margin (%)	Net profit after taxes / Revenue from operations	7.92%	6.61%	19.81%	The increase in net profit ratio during current financial year due to better operating margins in current financial year as compared to previous financial year.
Debt Equity Ratio	Borrowings (Current + Non-current)/ Total equity	0.20	0.06	210%	The movement in DebtEquity ratio due to repayment of term loan, increase in working capital & term loans and increase in other equity due to higher profits during the current financial year compared to the previous financial year.
Return on Networth	Net profit after taxes / Average total equity	14.13%	8.33%	70%	The increase in return on equity during current financial year is due to increase in PAT compared to previous year.

Cautionary Statement

The Statement in this section describes the Companys objectives, projections, estimates, expectations and predictions some of which may be forward looking statements within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price movements in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other related factors.