Olectra Greentec (OLECTRA)

FairStock Score: 56/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• ROCE of 20.52% with a low debt/equity of 0.24 indicates efficient capital use and limited leverage risk.
• Piotroski F-Score of 8/9 and Altman Z-Score of 4.14 point to sound financial health.
• Sales growth of 28.91% shows strong demand, while promoter holding of 50.02% aligns management with shareholders.
• Latest quarter turned in a positive net profit of ₹47 crore on sales of ₹664 crore, showing scale in operations.

Concerns

• Valuation is extreme: P/E of 57.24, P/B of 9.57, and EV/EBITDA of 50.91 offer no margin of safety versus Graham Number of ₹223.84.
• Profit growth of 8.65% is far below sales growth of 28.91%, suggesting margin compression and limited pricing power.
• Free cash flow is negative at ₹84 crore, so reported earnings are not converting into cash for owners.
• Dividend yield of 0.04% provides negligible income, leaving shareholders entirely dependent on capital gains.

AI Analysis

At ₹1,223.85, Olectra Greentec commands a market cap of ₹8,184 crore. A P/E of 57.24 and EV/EBITDA of 50.91 are prices that demand perfection. The Graham Number is just ₹223.84; at more than five times that, my margin of safety is not thin, it is absent. Margin of safety at -345% is a red flag for any Grahamite. There is some to admire. ROCE of 20.52% shows capital is used productively. Debt/equity of 0.24 is conservative, and Altman Z-Score of 4.14 suggests no near-term distress. A Piotroski score of 8/9 points to healthy financials. Promoter holding of 50.02% aligns owners with management. The moat may exist in its vehicle segment, but I see no pricing power in the numbers. The earnings story lags the revenue story. Sales grew 28.91%, but profits rose only 8.65%. Latest quarter sales of ₹664 crore delivered only ₹47 crore net profit, a thin margin. Free cash flow is negative at ₹84 crore. The business may be investing for tomorrow, but I invest on numbers I can measure today. Book value is ₹127.83; paying 9.57 times book is not caution, it is hope. Dividend yield of 0.04% means shareholders depend entirely on capital gains. At 57 times earnings with profit growth in single digits, the valuation assumes years of flawless execution. Benjamin Graham would say price is what you pay, value is what you get. Here, value is too far away to offer protection. I would put Olectra on a watch list, not buy it today. If profit growth accelerates, cash flow turns positive, and the price becomes more reasonable, I will revisit. Until then, the absence of a margin of safety makes this a speculation, not an investment.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer