Ola Electric Slips Below INR 100 Mark Amid Broader Market Crash

Shares of emobility major Ola Electric tumbled over 4% in early trading hours on Monday (September 30), slipping below the INR 100 mark amid a decline in the broader market, with Sensex and Nifty 50 suffering their worst day in almost two months. 

The stock fell as much as 4.2% to hit the day’s low at INR 97.85 apiece on the BSE. However, it recovered slightly to end the trading session at INR 99.70.

Ola Electric made a lacklustre stock market debut last month, with its shares listing flat at INR 75.99 apiece on the BSE as against an issue price of INR 76. However, the stock hit the 20% upper circuit at INR 91.18 apiece on the BSE in its first trading session. Subsequently, it rose to as much as INR 157.53.

But the shares of the Bhavish Aggarwal-led startup have ended in the red in 12 out of the last 14 trading sessions.

The decline in Ola Electric’s share price today coincided with the crash in the broader market. While the 30-share BSE Sensex fell nearly 1.5% to end the day at 84,299.78, NSE Nifty slipped 1.4% to 25,810.85. 

The benchmark equity indices logged their worst loss since August 5 due to a sell-off in domestic stocks, including heavyweights such as Reliance Industries, sparked by new stimulus measures announced by China. 

Recently, brokerage firm Goldman Sachs initiated coverage on Ola Electric with a ‘buy’ rating and a price target of INR 160 apiece. This would imply an upside of nearly 64% from the stock’s close today.

Goldman Sachs expects Ola Electric’s revenue to grow 2.5X faster and its volumes to increase 5X faster than its peers in the Indian electric two-wheeler market. The brokerage also expects the startup to achieve EBITDA breakeven by the end of FY27.

Ola Electric has also been tagged with a ‘buy’ rating by BofA Securities.

It is pertinent to mention that Ola Electric saw its consolidated net loss widen 30% to INR 347 Cr in Q1 FY25 from INR 267 Cr in the year-ago period. However, its operating revenue rose 32% year-on-year to INR 1,644 Cr in the reported quarter.

Earlier this month, HSBC expressed concerns about Ola Electric losing market share to its rivals in the EV 2W market. The brokerage firm expects a 15-20% downside risk to its FY25/26 volume projections for the EV startup.

Ola Electric saw its monthly escooter registrations decline 34% to 27,517 units in August as compared to 41,712 units in July. Despite a decline in sales, HSBC remains optimistic about Ola Electric’s recovery and has maintained its ‘buy’ rating on the stock.

Brokerage firm Bernstein is also bullish on Ola Electric. In a recent research note, it pointed out that Ola has the highest gross margin among its peers in the EV 2W market such as Ather Energy, TVS Motors and Bajaj Auto. 

According to analysts at Bernstein, Ola Electric is on track to achieve EBITDA profitability on the back of a diverse product portfolio, high vertical integration, D2C distribution model and aggressive pricing. 

In August, Ola unveiled its Roadster series of electric motorbikes and plans to enter the electric three-wheeler market soon. The company’s move to expand into newer vehicle categories is likely to give it a competitive edge over its competitors.