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Ola Electric Mobility Ltd, a prominent player in the electric vehicle sector, is experiencing a significant dip in its share price. The stock has been on a downward trajectory for five consecutive trading sessions, falling by 6.05% on Monday, hitting a low of Rs 118.57. This represents a substantial 24.73% decline from its all-time high of Rs 157.53, reached on August 20th.
Despite this decline, Ola Electric's shares remain considerably higher than its initial public offering (IPO) price of Rs 76. The stock saw a surge in buying interest after its listing on August 9th. However, the recent slump has sparked concerns and uncertainty among investors.
Bourses BSE and NSE have placed Ola Electric's securities under the short-term Additional Surveillance Measure (ASM) framework, a measure implemented to caution investors about the volatility in share prices. This move reflects the heightened attention surrounding the stock's recent performance.
Several analysts have expressed concerns about Ola Electric's valuations, indicating that a further correction may be in store. Mayuresh Joshi, Head of Equity Research at William O'Neil India, stated that while he admires Ola's electric bikes, he doesn't find the stock appealing at its current market price.
Vinit Bolinjkar, Head of Research at Ventura Securities, suggested that a dip to the Rs 105-108 level might present a good entry point for medium-term investment. He believes this price point offers a potential 40-50% upside over a couple of years.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, advised investors with a high-risk appetite and long-term horizon to consider adding Ola Electric to their portfolio. However, he also suggested that those who invested for listing gains may consider taking some profits.
Technically, the stock's outlook appears bleak, with Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, predicting a potential slip towards the Rs 110 level in the near term. He recommends a wait-and-see approach and advises investors to buy on dips.
The company's financial performance adds another layer to the situation. Ola Electric reported a widened consolidated net loss of Rs 347 crore in the April-June quarter (Q1 FY25), compared to Rs 267 crore in the same period last year. This underscores the company's ongoing struggle to achieve profitability.
Ola Electric, founded in 2017, is a dedicated electric vehicle manufacturer, specializing in the production of electric vehicles and key components, including battery packs, motors, and vehicle frames. The company's operations are centered around its Ola Futurefactory.