Ola shares down more than 30% from its recent all-time high

MUMBAI: Ola Electric’s shares have faced a significant downward trajectory, continuing to slide for the sixth consecutive session on Wednesday.

The stock has plummeted over 30 per cent from its recent zenith of Rs157.40 per share, now trading at Rs110—a three per cent decrease on the day.

Notably, despite this decline, the shares remain up 45 per cent from the initial public offering (IPO) price of Rs76, indicating initial investor enthusiasm.

However, current market sentiment appears to be shifting, prompting concerns regarding the sustainability of Ola’s growth and valuation.

Challenges facing Ola

Market analysts are increasingly sceptical about Ola Electric’s prospects in the near term. The company’s stock valuation is perceived to be speculative, particularly against the backdrop of intensifying competition within the electric vehicle (EV) sector.

Data from Jefferies indicates a troubling decline in market share, which fell from 49 per cent in the first quarter of the fiscal year to just 33 per cent in August.

The erosion of market presence is compounded by rival firms like TVS Motor and Bajaj Auto, who have not only maintained their positions but have also expanded their market share through the launch of more affordable electric two-wheelers.

The impending launch of Hero MotoCorp’s Vida EV motorcycle, positioned at a competitive price point, further underscores the challenges facing Ola Electric.

In terms of sales performance, Ola has hit a concerning milestone, registering its lowest monthly sales figure of 27,506 units in August—a 34 per cent sequential decline from July.

The downturn reflects not only a reduction in consumer interest but also a broader challenge in establishing a foothold in the more lucrative motorcycle segment.

Analysts from InCred Equities suggest that it could take up to three years for Ola to mirror its scooter success in the motorcycle market, highlighting the long road ahead.

Given these dynamics, market watchers recommend that new investors approach Ola Electric with caution. It may be prudent to await a more stable entry point or to consider the stock as a long-term investment, understanding the associated high-risk factor.

Analysts have warned that the current stock price may be inflated and subject to further correction, particularly as Ola grapples with ongoing losses and volatility.

As the company navigates this tumultuous landscape, its future will depend not only on operational adjustments but also on its ability to adapt to an increasingly competitive electric vehicle market.