Olectra recently awarded a contract for construction of the greenfield electric vehicle (EV) manufacturing facility in Hyderabad, Telangana to Megha Engineering & Infrastructures (MEIL).

MEIL is the ultimate holding company and a related party to Olectra Greentech.

Olectra Greentech has been working with Chinese electric vehicle giant BYD Motors to develop electric buses. However, the media reports suggest that the Indian government has rejected a plan by BYD Motors and MEIL to establish a $1 billion four-wheeler manufacturing facility in India. The rejection is based on security concerns raised during the deliberations regarding Chinese investments in India. The existing guidelines do not permit such investments, and the Centre was unwilling to give the green signal to BYD Motors.

The proposal, which aimed to manufacture up to 15,000 electric cars a year, was submitted by BYD Motors and MEIL to the Department for Promotion of Industry and Internal Trade (DPIIT). MEIL would have provided the funding, while BYD Motors would have contributed the technology and know-how.

The Olectra stock outperformed the market over the past one month, rising 31% compared with 5.65% increase in the Sensex.

The scrip outperformed the market in past one quarter, climbing 83% compared with 11.14% rise in the Sensex.

The scrip outperformed the market in past one year, rising 87.06% compared with 18% increase in the Sensex.

On the technical front, the stock's daily RSI (relative strength index) stood at 59.06. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

On the daily chart, the stock was trading above its 50-day, 100-day and 200-day simple moving average (SMA) placed at 945.31, 788.67 and 652.31, respectively. These levels will act as crucial support zones in near term.

Olectra Greentech is primarily engaged in the manufacturing of composite polymer insulators and electrical buses. The company's consolidated net profit jumped 52% to Rs 27.01 crore on 38.6% rise in revenue from operations to Rs 375.91 crore in Q4 FY23 over Q4 FY22.