All the pieces are falling into place for specialist eDrive developer Saietta Electric Drive (SED). On Monday, the Board announced that the group would be focusing exclusively on its substantial near term opportunities within the global lightweight EV sector, especially in India and Asia.
 
Today, the company said that it had received a watershed production order from a major Indian EV OEM to deliver complete eDrive systems worth £0.42m in the first 3 months, with deliveries set to commence before December 2023 from its 50:50 joint venture Saietta VNA in Delhi.
 
This is undoubtedly a seminal moment for Saietta Electric Drive and the culmination of years of hard work, bringing together best-in-class technology, resilient supply chain infrastructure, commercial acumen, and vital growth capital.
 
Further out, year one JV revenues are anticipated to be more than £11.2m, with a minimum order level of 40k units over five years. Elsewhere, the client has a second EV product line coming on stream shortly, which is also slated to incorporate Saietta’s AFT eDrive systems.
 
Together, the board estimates the combined volumes should be in the region of 80k units a year, which broker Canaccord estimates could be worth north of £130m over the 5-year period. Importantly, this contract validates Saietta Electric Drive’s credentials as a key tier 1 supplier in one of the world's largest and most competitive EV markets - not a bad endorsement for a £45m mrkcap group.

Canaccord has a BUY rating on the stock with an 80p target price based on FY24 and FY25 EBITDA and net debt estimates of -£10.1m/+£5.1m and -£5m/-£10m, respectively, on turnover rising to £7.9m and then £18.0m. That's from an EBITDA loss of -£9.9m  on turnover of £6.0m last year.
 
Executive Chairman Tony Gott commented: “Saietta Electric Drive has reached the point of inflection as we go into series production at our all-new production facility in Delhi, India. This purchase order received from a global manufacturer of one of the leading light commercial vehicles in India, validates the market pull for our modular products and services in this very demanding and cost-competitive market."
 
"Demand for lightweight eMobility solutions in India is rapidly increasing, with the EV market expanding by over 200% in 2022, with more than 1m new EVs registered. The Indian market - the largest producer of 2/3-wheel vehicles globally - is adopting and embracing electric drives in the push for cleaner, more sustainable mobility. We believe we are very well positioned to capitalise on this trend and fast-track vehicle manufacturers quickly and cost effectively to electric propulsion."
 
"The working capital funding facility within the JV, manufacturing plant and equipment, people and supply chain are all in place to commence production and we very much look forward to seeing the first customer vehicles powered by Saietta on the roads in India in H1’24."