Shares of Ola Electric Mobility Ltd plunged 8.82 per cent to hit a low of Rs 125.96 in Thursday's trade. The stock was last seen trading 5.83 per cent lower at Rs 130.10. At this price, it has 17.41 per cent from its recent record high value of Rs 157.53, touched a few sessions earlier on August 20 (Tuesday).
Despite the mentioned fall, the recently-listed counter has gained 71.18 per cent from its initial public offering (IPO) price of Rs 76. The stock made a muted market debut on August 9 but witnessed a strong buying interest after listing.
"Nothing changed fundamentally as far as IPO and post-IPO are concerned. Currently, the company has been losing about Rs 24,000 per vehicle. To recover from this, battery costs need to be brought down. As soon as the company start its own manufacturing, it will be in a position to bring down battery costs. When it happens, then the company will be showing the first signs of turning into profit," Deven Choksey, MD, DRChoksey FinServ Pvt Ltd, told Business Today TV.
"Whether it is happening in 2024-25 or 2025-26, the answer is no. Maybe somewhere in 2025-26, we will get the indication for the 2026-27 financial year where it will show first signs of bringing down the battery costs and make a profit on vehicle business," the market expert also said.
Despite all this, the stock has grown because there is no pure focus on EV OEM (original equipment manufacturer) in the market, Choksey mentioned.
"Tata Motors, Bajaj Auto, TVS and Mahindra have their EV portfolio but they are not pure focus EV companies listed in the market. There is a requirement for this kind of idea in the portfolio wherein they want to invest in pure focus EV business. That's why mutual funds are allocating money. Fortunately, they have a lot of push in the form of liquidity right now and that's a reason this idea is finding space in the portfolio of mutual funds which justified the post-listing rally. But, most of the fundamental aspects are required to be seen along with the results of the company in three to four years," he further stated.
"Ola Electric has rallied significantly post-listing. Given the futuristic business model and foray into lithium-ion batteries, Ola is giving a positive outlook for investors as the company is going to have its own battery for vehicles that are manufactured from April 1, 2025. It gives a good margin impact for the company. Investors with a high-risk appetite and long-term horizon can add this stock. For those who invested for listing gains can take some profit off the table," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
Technically, the stock is not looking good on charts and can slip towards Rs 110 level over the near term, said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking. Investors should wait to buy the dip, Singh added.
The company said its consolidated net loss widened to Rs 347 crore in the April-June quarter (Q1 FY25) from Rs 267 crore in the year-ago quarter.
Ola Electric was founded in 2017. It is a pure-play electric vehicle player that primarily manufactures electric vehicles and certain core components for electric vehicles such as battery packs, motors, and vehicle frames at the Ola Futurefactory.
As of August 8, 2024, promoters held a 36.78 per cent stake in the E2W player.