Ola Electric Shares Tank Over 6%

Continuing its downward spiral, shares of Ola Electric slumped as much as 6.8% to INR 81.01 during intraday trading on the BSE on Monday (October 21). 

The stock gave up some of the loss to end the session 6.09% lower at INR 81.66. With this, it ended in the red for the fourth consecutive session.

As many as 3.4 Cr shares of Ola Electric were traded today. The company’s market capitalisation stood at INR 36,018.84 Cr (around $4.2 Bn) at the end of the day. 

In the broader market, Sensex fell 73.48 points (0.09%) to close at 81,151.27 and Nifty 50 dropped 72.95 points (0.29%) to close at 24,781.10.

The stock has dropped about 48.1% from its record high of around INR 157.53 apiece on August 20 and is now trading merely 6.6% above its listing price of INR 75.99.

This slump comes on the back of the company facing consecutive monthly declines in sales and rising complaints about after-sales service. 

Earlier this month, Ola Electric founder and CEO Bhavish Aggarwal clashed with comedian Kunal Kamra on social media over the company’s after-sales services. Later, the Central Consumer Protection Authority (CCPA) issued a show cause notice to Ola Electric for alleged consumer rights violations, and other misconduct. 

Following this, it was reported that the company brought in consulting service firm EY India for a “service transformation” amid increasing service challenges. 

Ola Electric is also facing pressure from competitors in terms of sales. Its escooter registrations dropped 11% month-on-month (MoM) to 23,965 units in September, marking its lowest monthly vehicle sales since October last year. 

However, on October 14, the company said that it has been seeing a strong demand for its vehicles in October amid the festive season. Citing Vahan data, it said that its escooter registrations stood at 15,672 in the first 14 days of October and its market share stood at 34%.

Meanwhile, brokerages continue to be positive about the stock. Last month, Goldman Sachs initiated coverage on Ola Electric and gave a buy rating, with a price target of INR 160 apiece. BofA Securities also has a buy rating on the stock.

On the financial front, Ola Electric managed to trim its consolidated net loss by 30% to INR 347 Cr in Q1 FY25 from INR 267 Cr in the year-ago period. Operating revenue rose 32% year-on-year to INR 1,644 Cr in the reported quarter.