Whalesbook
Delhi EV Policy Sparks Share Gains
Delhi's draft Electric Vehicle Policy 2026-2030 is driving strong gains for Indian EV makers JBM Auto, Olectra Greentech, and Atul Auto. The policy offers a 100% exemption on road tax and registration fees for electric cars up to ₹30 lakh until March 31, 2030. It also includes targeted incentives for two- and three-wheelers, aiming to boost clean mobility in the capital.
Incentives and ICE Vehicle Restrictions Drive Policy
The policy outlines a tiered subsidy for electric two-wheelers, up to ₹30,000 in the first year (tapering over three years) for vehicles under ₹2.25 lakh. Electric auto-rickshaws will receive fixed incentives starting at ₹50,000, decreasing annually. The plan also features phased restrictions on internal combustion engine (ICE) vehicles, with only electric three-wheelers allowed for new registrations in Delhi from January 1, 2027. This aims to reshape urban transport for last-mile delivery and commercial use. The market reacted swiftly: JBM Auto rose 2.89%, Olectra Greentech gained 3%, and Atul Auto surged 18.04%, far outpacing the BSE Sensex's 1.35% increase.
Company Valuations and Market Performance
Beyond the policy boost, company valuations and market positions vary. JBM Auto (market cap ₹14,500 crore) trades at a P/E of 68.5 and ROE of 16.1%. However, analysts hold a consensus SELL rating with a ₹698.70 price target, indicating potential downside. Olectra Greentech (₹10,000 crore market cap) has a P/E of 70.4 and ROE of 14.3%, with limited analyst coverage but one 'Strong Buy' upgrade. Atul Auto (~₹1,370 crore market cap) has a P/E of 26.59. Despite a 14.05% domestic sales rise in March 2026, its EV sales dipped, and it has lagged the broader Indian auto sector recently. The overall Indian EV market is expected to grow substantially, potentially reaching $31.09 billion by 2026 and growing at a 52.56% CAGR through 2035, driven by two- and three-wheelers.
Risks and Competitive Challenges Ahead
However, risks remain. JBM Auto faces skepticism from a bearish analyst consensus. Olectra Greentech, a leader in electric buses, has limited analyst coverage, creating uncertainty in performance forecasts. Its focus on large fleet orders also makes it vulnerable to changes in government purchasing or fleet renewal cycles. Atul Auto's recent EV sales decline and underperformance signal transition challenges, especially against competitors like Bajaj Auto and Hero MotoCorp expanding their EV offerings. The gradual phasing out of ICE vehicles may also limit immediate large-scale EV demand across all segments.
Outlook: Sector Trends and Policy Impact
Looking ahead, the Indian auto sector is forecast to see moderating growth in fiscal year 2027 after a strong FY2026, fueled by premiumization and alternative powertrains. Government policies and changing consumer tastes support the electric mobility transition. The Delhi EV policy's success will depend on effective execution, timely subsidies, and adoption by other cities. Companies that adapt to segment demands and competition will be best positioned to benefit from this shifting market.