Ola Electric shares tumble 16% from record high level; here's what analysts say

Shares of Ola Electric Mobility Ltd jumped 7.88 per cent to scale their fresh all-time high value of Rs 157.53 in Tuesday's trade. As the session progressed, the stock gave up its entire gains and declined 15.98 per cent from the said record high level to hit Rs 135.19.

Despite the mentioned drop, the recently-listed counter has gained 74.15 per cent from its initial public offering (IPO) price of Rs 76. The stock made a muted market debut but witnessed a strong buying interest after listing.

Analysts at HSBC Global Research have initiated a 'Buy' call on Ola Electric with a target price of Rs 140. "Ola is India's market leader in electric scooters (e2Ws) and the country is the flag-bearer for EVs. That's because not only did Ola sell 49 per cent of all e2Ws in Q1 FY25, but it also aims to build most of the required EV parts in India, especially the all-important battery. Ola's go-to-market and localisation efforts are noteworthy and should attract investors looking to play the electrification theme in India. Admittedly, there are many concerns too – first among those is EV penetration remains slow and gradual. Competition also looks set to remain intense, especially from incumbents, while the outlook for regulatory support is uncertain and there are battery manufacturing risks," they stated.

Gaurang Shah, Senior VP at Geojit Financial, said, "The stock has been a flyer post listing. So, let it settle down after the recent runup. As a disclosure, we've given a 'Subscribe' rating to the IPO of Ola Electric."

Market expert Arun Kejriwal said, "Ola Electric has launched (EV) motorcycles and came out with a sweet spot, beating the lowest price (the mass market) by announcing a price of around Rs 75,000. It is a great strategy where you are crashing the barrier. The price goes up for other premium (EV) bikes from Rs 1.25 lakh to Rs 2.5 lakh. These four bike launches, bookings openings with delivery slated to commence Diwali 2025, all point to plenty of good news coming from Ola Electric."

The company has declared its June quarter results and the positivity that comes out is that they are now near breakeven on the EBITDA front, if you don't consider interest and depreciation in the company's financials, he also said.

"Going forward, Ola has also announced that batteries, which they're making, will be supplied in its EV scooters and motorcycles effective April 2025. The company is likely to become EBIDTA positive once the battery is also supplied with EVs," Kejriwal further stated.

The company, which made its stock market debut on August 9, 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.

The e-scooter maker slashed prices of its cheapest range of e-scooters in April this year after the government halved the subsidy for purchases of electric vehicles (EVs). It accounted for the drop in incentives as a one-time expense of Rs 23 crore in the mentioned 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.