Shares of Ola Electric, recently listed on the stock exchange, have shown a steady upward trend since their debut. IPO allottees enjoyed significant profits, but concerns are mounting about the sustainability of this growth in the coming months.
Ola Electric’s market share has taken a hit, with vehicle sales on the decline. According to brokerage HSBC, this downward trend could negatively impact the company’s growth. HSBC warns that if this persists, growth estimates for Ola could drop by 15-20% for FY 2025 and FY 2026.
August 2024 saw the company’s lowest monthly sales, with just 27,506 units sold, reflecting a 34% decline from the previous month. This slump reduced Ola’s market share to 31%, down from 49% at the end of Q2 2024. Meanwhile, competitors like TVS and Bajaj Auto have gained ground, capturing 20% and 19% of the electric two-wheeler market, respectively.
HSBC attributes Ola’s market share loss to the introduction of more affordable models by rivals. Sales of electric two-wheelers such as the TVS iQube and Bajaj Chetak surged in August, further intensifying competition.
Despite this setback, HSBC remains optimistic about Ola Electric’s potential for recovery, maintaining a “buy” rating with a target price of ₹140. On September 12, Ola Electric’s shares rose by 2% to ₹115.49 in early trade on the NSE. However, experts advise investors to proceed with caution, given the heightened risks surrounding the company’s future performance.