Shares of Olectra Greentech Ltd plunged 13% on Tuesday, 27 May, after Maharashtra Transport Minister Pratap Sarnaik called for the cancellation of the company’s electric bus deal over missed delivery deadlines.

Sarnaik criticized the company for failing to deliver even a single bus out of the 1,000 scheduled for handover by 22 May. Without naming Olectra directly, he said officials had been instructed to terminate the procurement of 5,150 buses due to the supplier’s inaction, raising serious doubts about the project’s viability.

In July 2023, a consortium of Olectra and Evey Trans Pvt Ltd secured the Rs 10,000 crore contract to supply and maintain electric buses for the Maharashtra State Road Transport Corporation (MSRTC) over 12 years. Under the agreement, Evey would buy the buses from Olectra and deliver them to MSRTC within 24 months, while Olectra would handle maintenance.

Sarnaik made the remarks during a review meeting at MSRTC’s headquarters on Monday evening, pointing out that the company had made no tangible progress despite receiving a revised delivery timeline.

As of now, Olectra Greentech has not responded publicly to the potential termination of the deal.

The development comes despite the company’s strong financial performance for the March quarter, where revenue jumped 58% year-on-year, net profit doubled, EBITDA rose 70%, and margins improved by 100 basis points. Olectra plans to host an analyst call on Wednesday, 28 May, at 4:30 pm to discuss the results.

At 11:58 am, the shares of Olectra Greentech were trading 5.78% lower at Rs 1,267.70 on NSE.

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