Ola Electric shares up 6% today, stock up 40% in 5 days; Know Analysts Opinion – News18

Ola Electric Mobility Share Price: The share price continued its winning streak for the fifth consecutive session. Should you buy?

Shares of Ola Electric rose 40% in 5 days.

Ola Electric Mobility Share Price: Ola Electric Mobility Ltd saw its shares rise by over 6% on Thursday, November 28, 2024, extending its five-day rally to a remarkable 39%. The stock touched a high of Rs 93.60, surpassing the Rs 90 target set by Citi on November 26 when it initiated coverage with a ‘buy’ rating.

Citi’s positive outlook Ola Electric has emerged from its position as the largest electric two-wheeler player in India, holding 38% market share in FY25YTD. Citi highlighted Ola’s broad product portfolio, strong R&D focus, significant vertical integration (including Li-ion cell manufacturing), and large-scale manufacturing capabilities. The firm also noted volume growth potential with the upcoming launches of motorcycles and electric three-wheelers (E3Ws).

Despite some negative perceptions of the service, Citi expects these issues to ease as Ola’s supply chain catches up with growing sales volumes. The brokerage identified key risks such as weak overall EV penetration, increasing competition, ongoing concerns about product/service quality, technology obsolescence, and continued net losses.

Although Citi prefers Eicher Motors and Hero MotoCorp. Ola Electricit sees Ola more favorably than Bajaj Auto and TVS Motors. Citi has set target prices for these companies, including Rs 7,800 for Bajaj Auto, Rs 1,700 for TVS Motor, and Rs 6,300 for Hero MotoCorp. For Eicher Motors’ Royal Enfield business, Citi is valued at 6.3 times FY26 EV/Sales.

Since Ola is yet to achieve EBITDA breakeven, Citi used a sales-based valuation approach (4x FY26 EV/cell) to arrive at a target price of Rs 90. Multiplier for four listed two-wheeler OEMs covered by Citi. According to Citi, this premium is justified by Ola’s dominant position in the fast-growing electric two-wheeler segment and its strong long-term growth prospects.

The firm also noted that Ola’s large production scale gives it economies of scale, which should improve profitability as capacity utilization increases. Ola is investing heavily in technology, as evidenced by the attractive features of its vehicles and strong backward integration, including Li-ion cell manufacturing. The company believes that its new Gen 3 platform will significantly increase profitability. While service issues have arisen, Citi expects these to ease in the medium term as supply chain improvements take effect.

Shares rose 40% in just 5 days.

Ola Electric’s stock has gained 40% in the last five trading sessions, marking a strong recovery. However, it is down 41.4 percent from its all-time high of Rs 157.40 reached in mid-August. The stock is currently trading 20.8% above its IPO price of Rs 76.

Ola announced its entry into the commercial segment.

On Tuesday, Ola Electric also announced its entry into the commercial segment with the launch of its ‘Gig’ range of scooters, priced at Rs 39,999. These scooters are designed for gig workers who travel long distances with heavy payloads. Also, Ola introduced the S1 Z model, a personal use electric scooter priced at Rs 59,999, aimed at urban commuters. The new scooters feature portable batteries that can double as inverters, allowing users to power small household appliances such as lights and fans via the Ola PowerPod.

Along with the Ola Gig and S1 Z models, Ola Electric offers an extensive S1 scooter portfolio with six variants to cater to different needs of customers. The premium S1 Pro and S1 Air are priced at Rs 1,34,999 and Rs 1,07,499 respectively, while the more affordable S1 X portfolio, including 2 kWh, 3 kWh, and 4 kWh variants are priced at Rs 74,999, Rs 87,999. and Rs.1,01,999 respectively.