Stock Performance Overview
Ola Electric Mobility shares saw a modest recovery on Thursday, climbing by 1.41% to Rs 75.45 after enduring two consecutive sessions of losses. Although the stock briefly exceeded its IPO price of Rs 76, it remains volatile, with ongoing consumer complaints contributing to uncertainty. Despite today’s uptick, Ola Electric’s shares have plummeted over 52% from their all-time high of Rs 157.53.
Inclusion in MSCI Small Cap Index
The recent rebound in Ola Electric’s stock price can be attributed to its inclusion in the MSCI Small Cap Index. This development is expected to enhance the company’s trading volume and liquidity, drawing interest from a broader pool of investors. Additionally, the anticipation surrounding the company’s Q2FY25 results, set to be announced tomorrow, may also be influencing market sentiment.
Service-Related Challenges Persist
Despite gaining market share, Ola Electric continues to grapple with service-related issues, which have drawn increased scrutiny from regulatory authorities. The Central Consumer Protection Authority (CCPA) recently issued a showcause notice to the company, further complicating its outlook. These challenges underscore the importance of addressing profitability and breakeven as key focus areas for the company moving forward.
Analyst Insights and Market Sentiment
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, indicated that while the stock may remain weak in the medium term, investors with a higher risk tolerance might consider holding their positions. He advised potential investors to wait for more favorable entry points, emphasizing a long-term investment perspective.
Technical Analysis Indicates Caution
From a technical analysis standpoint, analysts suggest the stock remains under pressure, with projections indicating a potential drop toward Rs 70. Ravi Singh, Senior Vice-President at Religare Broking, labeled the stock as being in a “no-trade” zone. Meanwhile, AR Ramachandran, a SEBI-registered research analyst, described the stock as oversold, suggesting it could find support around Rs 59.4. He advised investors to consider buying only if the stock closes above Rs 80.3, with a potential target of Rs 100.
Company Background and Promoter Holdings
Founded in 2017, Ola Electric is an electric vehicle manufacturer that produces various vehicles and components, including battery packs and motors, at its Ola Futurefactory. As of September 2024, the promoters hold a 36.78% stake in the company, highlighting their ongoing commitment to its growth.
Disclaimer
The views and opinions expressed by experts and brokerages in this article are their own and do not reflect those of the India Today Group. It is advisable for investors to consult a qualified broker or financial advisor before making any investment decisions.
