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Olectra Greentech Ltd
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Ladies and gentlemen, good day, and welcome to Olectra Greentech Q4 FY '24 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please 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, [ Manav ]. Good evening, everyone. On behalf of Axis Capital, I welcome you to the Q4 and full year FY '24 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.
I will now hand over the call to Mr. Sharat Chandra for his opening remarks, post which we can have the Q&A. Over to you, Mr. Sharat Chandra.
Thank you, Mr. Amar. Good evening, everyone. We are taking as read the presentation, which is put on our website along with the safe harbor statement thereon.
We are pleased to announce good consolidated results showing growth of top line and bottom line for the financial year '23, '24. Though performance of fourth quarter was impacted due to supply chain constraints, the operating margins remained positive for the quarter 4 and full year. We have delivered 1,695 electric buses and 51 e-tippers until 31st March 2024. I would like to present the key highlights of your company for the financial year '24 as advance.
The company has secured world's largest e-bus order of 5,150 buses from MSRTC. Received 3,000 electric buses order from BEST, Mumbai; won court case for BEST 2,100 order, first OEM in the country to achieve a milestone of 10,000 plus electric buses; homologated and completed AIS 038 certification for all bus models for the batteries, successfully extended the cooperation agreement with BYD till 31st December 2030; electric buses [indiscernible] have successfully covered more than 20 crore kilometers across the length and breadth of the country.
The strong demand remains with the company's net order book of electric buses at 10,969 numbers, after delivering, 100 buses in financial year '24. Our focus continues on increasing our capacity and enhancing our technology capabilities. The construction work of the new state-of-the-art plant is in full swing and partial production from the facility of [indiscernible] from this month. To incentivize the shareholders, the Board has recommended a dividend of 10%.
Now I'll begin to provide the key highlights for the full year on a consolidated financial. The revenue for the financial year '23, '24 was INR 1,54.1 crores, up by 6%. The company's EBITDA for the full year reached an impressive INR 185.5 crores, marking a growth of 20% compared to previous year. The PPP surged to INR 105.8 crores, an increase of 18% versus the previous fiscal of INR 89.4 crores. The PAT stands at INR 78.7 crores, up by 18% compared to previous fiscal of INR 66.9 crores.
On a stand-alone basis, revenue for the financial year, '23, '24 was flat at INR 1,114 crores. The company's EBITDA for the full year reached an impressive INR 168 crores, an increase of 13% compared to the previous year of INR 148.6 crores. The [ PBT ] is set to INR 98.7 crores, an increase of 8% versus the previous fiscal INR 91.1 crores. The PAT stands at INR 73.6 crores, up by 4% compared to previous fiscal INR 70.7 crores.
The quarter 4, as I mentioned in the initial remarks was impacted due to the supply chain constraints post certification of [indiscernible]. Accordingly, on a consolidated basis, the revenue has been -- for the quarter 4 is down and correspondingly, the operating margins as well as PBT and PAT has been down for the quarter 4. Thank you, and over to Axis team for the Q&A.
[Operator Instructions] We have our first question from the line of [ Bala Krishnan ] from Oman Investment Advisors.
I missed the opening remarks, but could you please repeat how many buses we have produced during this quarter?
Yes. Total for the full year, 507 buses and for the quarter, it's about 131.
So how much we are expecting in this financial FY 2025? How many bus can we produce?
FY '25, we are expecting a number of 2,000-plus numbers.
One more thing, sir, regarding the [ PME ] tender. So I think there's one bidder that was already awarded some number of buses in the initial tender. What is your operation in earlier call? I think at the time we have participated in the tender. So whether we have participated in the tender and are in the first tender we have participated, any outcome of the tender?
My colleague, Ramesh will address this question.
We have the tender and -- but however, the competitor received the orders.
Okay. And regarding the second tender. I think the second tender will [indiscernible]. We are also going to participate in that tender.
Yes, we are going to participate in the second tender itself. And as of now, it is due in the month.
Okay, understood. So regardless of [indiscernible] whether it's in full fledge are still about to ramp up. And I think we are talking about starting the second shift. So what is the plan for the -- when we can implement that?
Mr. Balamurali, basically, we are -- we have started as I think we have discussed earlier, we have done the trial production in the month of February. And we are transitioning into the new plant. And we are just completing the process and water heating issues are there. We are resolving it. And by the end of quarter 1, we'll be ready in the new plant. Partial commencement of production, we are going to start by -- we have already started by quarter 1. We are going to ramp up.
Okay. In that one, we can expect 2 ships running, sir, or another planning [indiscernible]?
Generally, the OEMs generally operate for about 1 [indiscernible] ships. So if it is required, we can extend it. So initially, we are thinking of doing a [ solution ].
Okay, sir. And could you please throw some light there on how things are spanning out? How is the order book?
As of now, [ we ] are conducting a lot on the remote and trials across various project sites. The conversion -- the ramp-up is yet to happen. The traction is yet to happen. We have about 41 orders were e-tipper to the orders on hand. We have delivered totally till date about 51 tippers in the last financial year, about 34; and we have 41 e-tipper orders on hand.
Okay. And lastly, on the guidance at [ 2025 ], do you see any challenges, which may stop us to achieving the guidance because in the last financial year, so we had a good guidance. But I mean we could not [indiscernible] reasons like battery or [indiscernible] . so do you see any challenges we can face in this financial itself also to not -- because of that, we could not be able to achieve this guidance of [indiscernible]?
As of now, we are not foreseeing any major challenges. We are going to ramp up from quarter 2 onwards. The quarter 2 -- quarter 1 will be a little slow because we are in the transition to new plants. And for Q2 onwards, we are going to ramp up the production. We are not expecting any challenges as of now.
We have a next question from the line of Sidharth Agarwal from Systematix.
But I was just a bit depressed on seeing our Q4 numbers. And then you said that you had supply side constraints. Could you just elaborate on it, that what happened exactly during the quarter because of which our production was impacted? Production or sales, whatever was impacted.
Yes. See, basically, I think to elaborate, Government of India has introduced the safety norms for the battery, where the testing and compliance certification is required to be done. The facilities, they are not available in India. The testing has to be done online in China. It took more time and it was beyond our controlling capacity. We successfully completed all the trials and [indiscernible] certificates but in the interim, we lost about almost 2 quarters.
And post certification, the supply ramp up by the manufacturer, we went up. There are constraints in ramping up the production. So that is the reason the quarter 4 and the full year nwere impacted. And that is one reason. Second is keeping us to the future production requirements. We have transitioned to the new plant and started pilot production from a new facility in February '24. We are in the process of streamlining the process and initial seeding issues, we are trying to overcome. And by end of this quarter, the production capacity will get enhanced. And for your kind information, we have rolled out a batch of delivery from this facility this month.
Sir, sorry, what is the last sentence, sir, you have rolled over?
We rolled out our first batch of deliveries from this facility.
Yes. So how much can we take you? And what is the best that you rolled out? I think the very first was 74 you started, right?
Basically, we have trial production we did in February, it's more of trial. And then we are now doing the partial commencement of production in one particular body shop, where in a particular batch of delivery, over 30 numbers.
Okay. So that has been done.
Yes, that has been done.
That has been given to the customer.
Yes.
Okay. So that has been given. And now -- so in March, we did 30 over there. So let's say, the story is over there. Now from April onwards, where are we seeing per month because I think it's going to be subdued quarter [indiscernible] Sorry? Yes, sir. I think April, May, June are also going to be a subdued month, right?
This quarter will be subdued because of the [ transition ]. We are hoping the numbers to be in line with quarter 4 or slightly better than quarter 4.
So around 100 maximum.
150 to 200. We're targeting 150 to 200.
Total for the quarter. And then from next Q2 on the monthly production you're looking at?
Overall, we are -- as I mentioned, about 2,000 number is what we are targeting. We are going to accordingly ramp up from quarter 2 onwards.
Okay. But you're not seeing any supply side constraints of those testing on [indiscernible] affecting you as of -- at all from now onwards?
As of now, we are not foreseeing any challenges.
[indiscernible] the second and all which you were saying, so those things are behind us or it's still happening?
That is behind us.
Totally behind us. So now all those testing are finished, right?
Yes, yes.
And sir, in terms of [indiscernible] types, what kind of numbers are we doing now? Monthly run rate or something, whatever it is?
It was -- we did not do any sale in quarter 4. We have been doing extensively demos and trials in various project types. Conversion, though the performance of [indiscernible] is very, very good, the conversion of the private inquiries into orders is yet to -- the traction is yet to happen. We have about 40, 41 orders online.
Yes. Okay. And until now we have delivered 51, you said, right?
Until date, cumulatively, 51 numbers were delivered.
Okay. And last question for myself. So right now, our capacity is 200 units per month for buses. And when are we planning to ramp up, if at all? FY '25 or FY '26?
Yes, in the new plant to start with, we are ramping up the production up to 2,500 numbers. And by the end of the financial year, we are expected to [indiscernible] 5,000.
We have our next question from the line of [ Aryan Meta from Meta Investments ].
Sir, quarter after quarter, the execution has been very slow, something in the other always pops up. So can we expect that we will adhere to the time line of the orders that we have received?
Yes. The initial question [indiscernible], we have already clarified the reasons why the numbers got impacted. So we are actually planning to ramp up the capacity in the new plant, and we are targeting to fulfill the orders on hand. So we are targeting about 2,000 numbers in this financial year, minimum. About 5,000 numbers in the next financial year and 10,000 numbers in the following year, wherein the existing orders, all orders will be completed.
Okay. That sounds great. And also, sir, to clarify on the 2,000 number. Last quarter, you gave a guidance of 2,500 for FY '25. So has anything changed on why you're giving 2,000 numbers?
No, since the quarter 1 has been subdued, the coming quarter is subdued. And then we are conservatively giving a 2,000 to 2,500 numbers.
And my final question -- my final is that we are a pioneer in e-tipper space in India. And can you submit the opportunity for e-tippers maybe 3 or 5 years down the line, that how many tippers could be sold at year? And what would be the expected penetration of e-tippers maybe in the future some time?
See, there is definitely a lot of potential in e-tippers and trucks because the operational economics is quite good, significant. But as you are aware, there are other inherent challenges for the conversion because in typical [indiscernible], there's a lot of ice diesel pilferage, which happens in the product side. So once we convert into EV segment, totally electrified, so these issues will not be there. So that is also one reason where the private people there is resistant, is there. But apart from that, the product is excellent and the economics is quite viable.
We are trying to actually work on localization. We are trying to reduce the cost. So our product is premium product. So -- and the -- whatever supplies, we have done 51 tippers until date, doing very well in all the project sites. So we expect the traction to happen in the next 2 quarters in this year.
We have our next question from the line of Gaurang from Utility Unified.
Yes, I'm audible? My first question is related to the 2,400 BEST order, which was notified on 22nd of February 2024 to be exchanges. So as for the tender, which was floated by BEST, the requirement was of 2,400 plus the 25% variation. So is there any chance to grab those additional 600 buses as part of the revenue, 25% loss?
As for the letter of award and as per the agreement, both actually, that 20% is there. Once we complete this 2,400, automatically the 600, we can expect.
Okay. Good to know about that. My second question is with respect to the same tender of 12-meter 2,400 buses. So the value, which was modified was INR 4,000 crores. So basically it comes to around INR 1.70 crores. But the first tender of parameter, 2,100 buses. So that time, the [indiscernible] value, which comes to around INR 1.7 crores. Sir, I just wanted to understand the reason behind falling [indiscernible] since the bus consideration is almost the same. Because if you remember the first order of INR 2,100 crores, that was coming to around [ INR 367 crores ], which is INR 1.75 crores. But this time, it's coming to [ 1.70 ]. So just wanted to understand why is the reason behind falling bus [indiscernible].
Basically, I think one is the timing. The first tender was done quite a long time back, which is the latest tender. It prices also, we are -- we have been very working rigorously to do or to increase the local [indiscernible] content and reduce the cost to be competitive in the market. So accordingly, since the timing is different, the cost out is slightly different.
My last question. So recently, UP has started [indiscernible] has announced to deploy 50,000 electric buses over a period of 4, 5 years. So with related to the sale of first tender of 5,000 or electric buses have been floated. So I just wanted to know if Olectra has decided to place the bid for the [indiscernible]?
On many [indiscernible]. Yes, sir. But as of the tender is on MCC basis, as of now, all the OEMs in India and the operators are not interested to participate [indiscernible] so including us, all the OEMs have submitted our request to convert into GCC. And we are -- all the volumes are under purchase with [indiscernible]. We are expecting that this tender will result as GCC. And after that, we are very much interested because if the UP is a very growing state, and we want to receive orders from UP.
That's great to know. Okay. My final question. Also, are you expecting a symmetry [indiscernible] to come up for private electric and trucks and buses? Like what is going around in this open in terms of policy making? Any idea on that?
Yes. As of now, see, because of the elections, no [indiscernible] can come. As of now, it is silent. So we have to wait for the elections to get over and then the announcements will happen. But as you are [indiscernible] Government of India we are pushing very hard for electrification of public transportation. And as of now, the percentage of population of EV conversion is very, very less than 1%. And so definitely, the government -- we are expecting the government to come with some policy guidelines.
And sir, recently, the MHA has released it or down went target is to convert all the buses to -- from diesel to electric. And they have given a figure of [ 8 lakh ] [indiscernible] to be converted into electric from diesel by 2030.
That's where I was coming from [indiscernible].
We have a next question from the line of [ Omar Shankar Mukerjee ], an individual investor.
Sir, I had a couple of questions. The first question is what about the capital expense of INR 800 crores? [indiscernible] some bank. What is the update on this?
What is the second question?
Second question is about as people are saying that 8 lakhs [indiscernible] lot of scope, right? So in the supply line change [indiscernible] -- we are getting every quarter, we are getting on [indiscernible] you to achieve our target, and it is not a good sign.
So on these relations, I mean, [ now ] and proactively planned future for next CapEx to achieve that goal, maybe you can buy land or some other things. Well, that should be not the same state [indiscernible] or Hyderabad. It can be north or some other first part of India. Can you have a larger plan for that future? So that now, whatever is getting a good contract, I mean we should deliver, right? [indiscernible] maybe you should have 20,000 or 30,000 5-year capacity. [indiscernible] plan for the coming 2 years?
Yes. To answer your first question regarding the CapEx for the new greenfield plant at Seetharampur plant. So we are now going with a term loan of over INR 500 crores. We have received sanctions from the commercial banks. And recently, the Board has approved, and we are in the process of completing the documentation. And next 2 to 3 weeks' time, we are planning to do the drawdown.
That is the first question. Second is the supply chain sector. We have already acquired 150 acres of land in Hyderabad and they are building a world's largest EV manufacturing facility. And in terms of EV buses, to start with the capacity is built for 5,000 numbers by the end of 1 year and it can go up to 10,000 numbers within year 2. And based on the requirements, we can make a shift -- double shift or preshift workings and then increase the capacity to meet the requirements.
Yes. So this is our half the total second [indiscernible] can have total 10,000. I'm saying that in future on to that kind of have it proposed from the getting approval for buying a land in different states for our next CapEx, not this one, the other one. Maybe we should have target 50,000 or more capacity 5 years. Maybe I know it will take time, but it is planned now only. Then only you can focus our pipeline and maybe to get a new deal. So can you have other product plans?
As a point noted, we'll have to deliberate internally. As of now, we have -- we are focusing on building up existing new plant. At an appropriate time, we will revert if we are having any plan to set up any facility also in the state.
We have our next question from the line of [ Sameer Deshpande ], a shareholder.
As everyone has experienced the disappointment over the -- we are not in a position to meet any of our targets. And every quarter, we have been facing various challenges. So now you mentioned that we have the total order book of about 11,000 odd buses, is that correct?
Yes. Approximately about 11,000 numbers.
Yes. And actually -- we are the pioneer, actually in India, we are the first in this. So from this, I'm not in a position to know whether we are the largest player in India in e-buses currently with the annual sales of only [ 507 ] buses. Or are there any other competitors who are selling more number of buses than you in India to the government?
As of now, see, we along with competitors like Tata Motors and Switch Mobility of Ashok Leyland are the major players. In terms of order book, we are the largest. And in terms of delivery till date, we -- and in terms of operations, we are India's #1. So as far as the constraints are there, it is applied not only to us, it applies to the entire EV segment. And hopefully, the constraints we are overcoming and then we hope to ramp up the production and supply in the current financial year.
Our sale of [ 507 ] is the largest, if you take in the annual year in this year for the entire industry -- electric bus industry?
See, basically, for any industry, it takes time. EV as such is still at [ initial ] stage, about almost 1.8 million buses are in operation. And as per the government of India initiatives and the latest CapEx policies, a large number of buses are going to get replaced by 2030. So in view of this, we -- all the -- entire industry is actually building the supply chain. So it is going to take some time. So, we as a company until now, cumulatively, we have delivered about close to 1,700.
Close to?
1,695 to be precise till 31st March 2024.
And regarding the new plant, you mentioned that the trial production is on and by the end of the quarter 1, you will be in a position to ramp up your production capacity to around 2,500 per annum. Is it correct?
Yes, you are correct.
So the first quarter will be a slower one. And the rest of the 3 quarters, you hope to sell about 1,800-odd buses so [ 1,200 ] to meet the target of [ INR 2,000 crores ], which we have set for ourselves.
Correct. Yes, you're right.
And regarding the -- if you see our balance sheet, we have cash above [ INR 170 crores, INR 175 crores ] and the date of INR 120 crores. Now for the CapEx for the first plant is only over. So you are mentioning that the capacity is going to be ramped up to 5,000 by next year and to 10,000, by -- the second year, '26, '27. So for that purpose, what will be the incremental capital expenditure we'll be requiring?
The total CapEx plan is about INR 700-odd crores. Out of that INR 500 crores is what we are taking a term debt and balance INR 200 crores is some internal accruals. So -- and this particular CapEx plan will take care of the [ civil side ], it can cater to 10,000 numbers. The plant and necessary balancing equipment may be required, maybe about INR 100-odd crores to increase to 10,000.
So the total is around INR 700 crores and out of that already we have spent something on the new plant, the first plant?
No, we have actually -- initial first plant was a leased facility. We were -- so this is our own plan, first -- old plant. We have spent about INR 100-odd crores till date.
The balance will be spent with internal accruals and some term debt, we'll be taking? No plan to raise capital -- equity capital?
As of now, we have basically not yet decided. So as of now, there are no plans have been made.
And now these battery norms problem you mentioned that because the testing facilities are not available in India and government has made it mandatory, safety norms, et cetera. So the problem still persists or that is here to get it check from some other country?
The certification is over now. We received in quarter 2. But 4 certifications, the vendor has to ramp up their production because the other change in the norms. So accordingly, the ramp-up has taken time. So because of that reason, because not only us, our entire industry are importing battery cells and the powertrain components. So we are dependent on imports for the battery cell and the powertrain components. So as of now, no Indian company is making. It's in the process out there, some of the companies have started, maybe in 2 or 3 years' time, the battery cells will be available in India.
So the problem is still there. So what -- when you ramp up your products and say about 2,000-odd or 1,500-odd, et cetera. Will that vendors will be in a position to cope up that?
We have had very detailed deliberations, meetings, various meetings with the vendors, and we have definitely confirmation from them, they will be in a position to supply.
And with respect to this order book when we have some tenders and we have the delivery schedule of actually book for next 2 years or 3 years -- so when there -- if there is a price rise in between, that is the commodity prices go up, the steel prices go up, what about your battery prices go up? And in that case, are we compensated in the same commensurate way?
See, basically, we are expecting the battery prices to come down. I think you can go through the studies from a $200 per kilowatt, it is likely to come down by 50%. 100% in next 2 to 3 years or it can come up even much before. So we are not expecting any major changes because the major 40%, 45% is the cost of the battery. Components -- battery component is [ real ] cost. And other components, if there's a price increase or price escalation like steel or other raw materials. We operate on cost-plus model, and we will be -- in such a situation, usually we discuss with the customer to modify the price.
So if required, some modification can be done because otherwise, when the delivery schedules are delayed, it takes 2 years and 3 years, who can predict the costing environment across such a long [indiscernible]...
Last bit was not clear, I was not about to hear you.
What I was asking, since the delivery schedule gets delayed, and suppose you have to supply it after 1 year, and if you are required -- because of the delays you supplied after 2 years or 3 years, the prices will change. And in that case, is the price -- as you mentioned, battery prices come down et cetera itself, but if there is interest to our disadvantage, and if we keep on losing money on that, will that cost be borne by the customer or we have to bear it?
Actually, just to clarify, Mr. [ Sameer ] see we operate on a cost-plus model. On a volume and based on the volumes, we expect the operating margins to remain healthy. We don't expect major challenges in operating margins. So the cost comes down, the sales price comes down, the cost goes up, the sales price goes up. So that is how it is. So there's a flexibility to revise the prices. But generally, we factor inflation while quoting the prices at the time of bidding.
Okay, and all the best. Let's hope we have a good financial year coming up, coming financial and going forward also.
Thank you so much.
We have our next question from the line of Rishabh Agnihotri, a shareholder.
I just want to talk about the whole quarter...
You are not certainly clear, can you change your handset?
Yes, can you hear me now?
Yes, better. Please go ahead.
Yes. So I'm just saying that I'm not going to focus on the past quarters, I'm just focusing on the upcoming ones. One thing I don't understand is like, I mean, one of the reasons that we back Olectra is because of the promoter Megha, right, and I mean you guys have built dams and tunnels and all. So I just want to understand that, I mean, from that perspective and spectrum, putting a factory in capacity expansion should be not that hard, right?
So I just want to understand, is it not being prioritized? Or how -- what are the actual restrictions because the battery norm thing that we have been hearing since the last quarter, and just -- I mean totally understand that this is a new field and it's more innovative in general, but we feel somewhere like the overall transparency or clarity is not there.
So if you can throw some light on this, that would be very helpful because the execution numbers are -- I mean we can track this data in real time on Vahan, this data is like quite different. Like 1 month, you're just producing 1 bus and one month you're producing 95-plus buses. I just don't understand where is the problem coming exactly?
Yes, on Vahan clarification from my colleague.
Yes, the Vahan data is state to state -- from the -- let's say, when we dispatch from our plants, maybe we have multiple customers at multiple locations, right?
And at Olectra, our part is to only do it here and after that, our customers will do the registration and other things. Maybe a few buses will be delivered in Hyderabad maybe in 1 or 2 days, it got registered. Maybe a few buses will go to states like Assam where you need to transport the buses, it takes for more than 15 days or so. And few buses will go to Maharashtra and various locations of India. So state-to-state registration procedures are different. So it is taking time. The Vahan data only takes when the bus got registered.
Got it. So when you're operating at a delay, I totally understand that part. But just one thing which I want to understand is like why is the execution overhang there, especially for us, right? I mean we have been pioneers in this field. We've launched it before. I think your capacity plan and utilizations all are commendable, no doubt about it. It's just that all of investors are like you're just around that finish line, and we can see that this -- Olectra might just boom up -- but these -- like sort of execution risks keep coming up.
So if you can just share some light because the battery norms, I don't think that was last quarter to quarter, right? And we moved and expanded our factory. I mean 100 buses is like from that spectrum where you're saying that you'll go to 400 buses, I think it's not that digestible, right? So I mean, if you can share a bit more information, that would be very helpful.
I think we have clarified very clearly post certifications, the supply chain constraints in ramping up the production based on the new certification norms, there have been ramping up issues from the vendor side. The second is on the transition, we have been transitioning towards the new plant. So -- and as you asked, there have been transitioning to new plant, where we're facing issues which we are resolving by end of this quarter 1, we'll be streamlining the production in the new plant.
And as far as the MEIL is concerned, the MEIL is the parent company, of course, we have full support from MEIL wherever it is required. But as a philosophy of the group, all the companies are very self-sufficient and independent. Wherever we require support from MEIL, they have been supporting. So -- and we have sufficient -- we have relevant Board as well as shareholder approval to approach MEIL in case of a need. So based on the deliberations of internal management, we have going to raise a term loan to the extent of INR 500 crores. And post which the plant capacity will be expanded initially to start with 2,500 to 5,000 in -- by the end of year 1. By year 2, we expect the ramp-up of the production to 10,000 numbers.
I just hope that this time the targets are met because -- I mean the targets have been downsizing ever since -- I mean we've been tracking this for the last 1, 1.5 years now, right? So the targets like get downsize as soon as the quarter reality hits. So we just hope that this time there are no problems and things go in the right direction because competitors are definitely coming up in the field, JBM has been doing really well. Tata is producing large amount of buses and getting it delivered, registered, I mean the thing that data on Vahan, there is a large disparity, so, I'm just worried as Olectra's investor and well wishers that we shouldn't stay behind in any -- I mean, that's all I have to say. I just hope that the next meeting we are just meeting at terms. That's all.
Thank you very much, Mr. Rishabh. We definitely were striving. And from quarter 2 onwards, the production will get ramped up and the progress will definitely will be much better than earlier quarter. And this financial year '25, '26 will be -- historically, we'll be surpassing all the numbers -- '24, '25.
We have a next question from the line of Sanjay, a shareholder.
It's really a disappointing quarter for investors and shareholders, the company as well. The last 3 quarters, every time we are getting projections -- after Q1 call, we got projections of 1,200 buses, and Q2, we got 1,000 plus than Q3, we got 800 plus. Yes, there was a problem already informed about the battery problem, battery norms, now is the supply chain because suddenly the vendor is not able to give those batteries and that impacted your delivery of that.
These problems, definitely, if you are already known problem, then you wait till the end of the quarter and then inform that okay this is the problem. It would be great if whenever problems are there, why don't you just upfront tell because why are the projections have given 800 plus at the end of the quarter -- Q3 quarter? Now the problem is it could have been just informed rather getting shocker at the end of the quarter. That's one thing. It looks like your execution and operations issue. I mean on that even in between Mr. Pradeep has come on the television channel and it was again confirmed that it was 800-plus buses will be delivered in this particular financial year, last financial year.
So it would be great, I mean, if you be more transparent and update everyone about any changes are happening in projections? Second is about [indiscernible] are doing very good work, coming on the call and explaining it. But last 3 calls, you haven't had Mr. Pradeep coming and addressing investors, we saw him on the television on the channel but it will be great if next quarter call with Pradeep and many senior people come on the call. And this is really frustrating, I mean, for the investor perspective, wherever all projections are going, for thoughts on that.
Now for the Q1 perspective, again, you're saying the quarter was subdued because -- there was like you are saying that the problem of the supply chain is solved, only the transition of new plants may be happening. But still, the buses will not be delivered more than Q4 on that. So how things are taken care off? And about the new plant, is it going to be fully functional by June 1 or July or August? What are the timelines for that?
Partial -- see, one of the body shops, partially, we are completing it. So -- and the construction is progressive, it's progressing and by end of this calendar year, we are hopeful of the capacity to be ready. And by end of 31st March '25, we expect the capacity to be around 5000 numbers.
Yes, yes. That is right. So the transition to the new plant, it is not yet started, it is May -- end of April now, and almost May and June. So I guess the next 2 months you are not transitioning to the new plant?
We have already started the trial production, we have started dispatching the first batch of numbers from there. And the -- so the ramp-up will happen from quarter 2.
Okay. But there is a specific reason that supply chain problem is solved. So it is not going to be -- you kind of increase the capacity compared to Q4 in Q1. I mean it will be still around same number of what you are seeing in Q1 on that?
Q1 will be subdued, Q2 onwards, we are ramping up.
Okay. And the other question is about other than tippers and e-buses now, have you seen new -- you guys are planning to launch in FY '25, like hydrogen bus or 3-wheelers or cars, any other plans are there in FY '25 from our company?
As of now, there are no such plans.
So the hydrogen bus prototype, that was just a prototype as there is no further progress on anything on making into production there?
As of now, we have separate prototype bus and -- so we have already mentioned earlier, the trials will take more time and it's a new technology...
Okay. All right I think it will be great if we get updates.
We have the management line disconnected. Please wait we will join them back.
Ladies and gentlemen, thank you for waiting patiently. The management is back online. Over to you, sir.
We have our next question from the line of Mr. Gaurang from Utility Unified.
So okay, this is more of an appreciation that I wanted to convey to the team. Since I stay in Mumbai, so far delivered 1200 AC buses have been received extremely good positive reviews. So congratulations for that. I mean I've been hearing since some all quarters of people that they have really appreciated this bus, so God bless you all, and I hope Almighty gives us strength to deliver the 5,000 pending buses at the earliest.
Thank you so much for the feedback. And definitely, we are striving to complete the deliveries at plan.
We have our next question from the line of Mr. [ Sunil ], shareholder.
This is [ Sunil ] so as per the original plan, we need to do the automation, right, almost like 60% to 70% of the automation. So did we finalize the automation vendor?
Yes, we are in the process of finalizing all the vendors, we have already shortlisted and closed the discussion. So it's a continuous process. So by end of this year, we will have the capacity to build up to 5,000 with automation.
With the automation, without the automation, how much of the capacity will range? We need it or not or it doesn't make any much difference like with the automation and without the automation.
Granular manner, the plant is built. So we have 2 body shops. So first body shop is being -- is ready now. So where we did the trial production and then commenced supply of first batch of buses. So automation, we are doing the second body shop.
And the second thing is like recently, like I don't remember exactly one of the RTC -- there raised a warning setting like we missed some deliverable so based on the timeline which we are supposed to deliver. So how are we going to address that? Because they -- because they might be having the penalty clause on, right? If there are further delays?
Yes. See, what is happening is, I think we have clarified this question in the earlier calls. So the electric bus operations is highly remunerative to the STU, and in terms of their scope of bus -- scope -- they are supposed to give us the depot space and also with power. So sometimes, for example, in the state of Mumbai itself almost 100-plus depots are required to be established. And in the state of Maharashtra about [ 173 ] depots are required to be established. So their -- their responsibility is to allocate the space and provide the power to us and...
And my next question is like are we planning to run because still the new production capacity is in full -- until it comes to full production capacity, why don't we run the old production capacity and the new production so that it will meet the delivery and everything with the RTC and for the industrials also. Why can't we or is it not viable for us?
Basically, operationally, it's not convenient because otherwise, we need to have 2 general managers operating old plant and the new plant. And we want to basically focus from one under one roof wherein we want to granularly build the body shop and the chassis assembly and the battery assembly and all the other relevant sheds.
And Olectra is known for its quality product in the market. If you operate in a old plant and the new plant, it's for the same customer. Also if there is difference in qualities and other things, it will be issue. So we don't want to lose the brand value and quality parameters. That is our prime SOP.
My next question is like what is the probability like right now because Q1, we are estimating like no, we'll be having a little bit of lesser numbers. So even the same risk can be continue to Q2 also, right? Because it -- because we are only planning to operate only from the new plant. So during this transition phase it might be because any new factor comes in the picture, during this transition phase, even the Q2 also might get disturbed because of this, am I right?
See, we are planning to do about -- that is the reason that we are building up capacity slowly about 200 numbers is what we are targeting quarter 1 doubling it up in quarter 2. And thereafter, the quarter 3 and quarter 4, we are going to increase significantly.
As there are no further questions, I would like to hand the conference over to management for closing comments. Over to you, sir.
Thank you very much. We thank all the stakeholders for their continuous support. And we are definitely striving to beat our numbers. Historically, we are striving to have excellent topline and bottom line in financial year '24, '25, and we continue to have the support from the stakeholders. Thank you very much.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.