Ola Electric shares down 19% from recent record high; analysts hint at more correction

Ola Electric Mobility Ltd shares continued their downward move for the third consecutive session in Friday's trade. The stock fell another 3.28 per cent to hit a day low of Rs 127. At this price, it has declined 19.38 per cent from its all-time high value of Rs 157.53, a level seen earlier this week on Tuesday (August 20).

Despite the mentioned drop, the recently-listed counter has gained 67.11 per cent from its initial public offering (IPO) price of Rs 76. The stock made a muted market debut on August 9 but saw a strong buying interest post-listing.

Bourses BSE and NSE have put the securities of Ola Electric under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

A few analysts largely suggested that the counter could be corrected further. Those who invested for listing gains can consider booking some profit, one of them stated.

"Valuations are no longer cheap for Ola Electric. It still needs to correct," Mayuresh Joshi, Head-Equity Research at William O'Neil India told Business Today TV. Though I love their bike but I don't love their stock at the current market price, he quipped.

"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," said Deven Choksey, MD at DRChoksey FinServ Pvt Ltd.

"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. Despite all this, the stock had grown because there is no pure focus on EV OEM (original equipment manufacturer) in the market," the market expert added.

"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.