Ola Electric Shares Surge 40% in 5 Days; Analysts Bullish on Stock - Read Now

Ola Electric Mobility Ltd. is witnessing a significant surge in its stock price, with shares jumping over 6% on Thursday, November 28, 2024. This marks the fifth consecutive day of growth, pushing its total five-day rally to a remarkable 40%. The stock hit a high of Rs 93.60, surpassing the target price set by Citi at Rs 90, which was issued just days earlier.

The surge in Ola Electric's stock is a reflection of investor optimism surrounding the company’s growth prospects in the electric vehicle (EV) market. Ola Electric is India's largest electric two-wheeler player, holding a substantial 38% market share in FY25YTD. This market dominance, along with an expanding product portfolio and strong focus on research and development (R&D), has garnered attention from analysts.

Analysts Positive on Ola Electric Stock

Citi recently initiated coverage on Ola Electric with a 'Buy' rating, highlighting the company's significant potential in the rapidly growing EV segment. Despite some concerns regarding product and service quality, Citi’s analysts remain optimistic about Ola’s long-term prospects. The brokerage firm set a target price of Rs 90 for Ola Electric shares, supported by the company's impressive vertical integration, including Li-ion cell manufacturing, and its ability to scale production.

Citi also pointed out that Ola’s upcoming launches of motorcycles and electric three-wheelers (E3Ws) will drive additional volume growth. As the supply chain issues resolve, Citi expects improvements in service perceptions, which will further boost sales. While competition is rising, Citi’s analysis suggests that Ola Electric’s strong market position makes it a key player in the EV sector.

Citi’s target prices for other two-wheeler OEMs in the EV space reflect a more cautious outlook. For instance, the target for Bajaj Auto is Rs 7,800, while TVS Motor and Hero MotoCorp are set at Rs 1,700 and Rs 6,300, respectively. Ola Electric is viewed more favorably than competitors like Bajaj Auto and TVS Motor, with its scale and vertical integration positioning it for future growth.

Ola Electric Stock Price Update: How the Company is Expanding Its Reach

In addition to its positive stock performance, Ola Electric is expanding its reach in the EV market. The company recently entered the commercial segment, launching its 'Gig' range of scooters targeted at gig workers. These scooters, priced at Rs 39,999, are designed for long-distance travel with heavier payloads, addressing a growing demand in the delivery and logistics sectors.

Ola Electric also introduced the S1 Z model, priced at Rs 59,999, aimed at urban commuters. The S1 Z is part of Ola’s expanded S1 scooter portfolio, which includes six variants catering to a wide range of customer needs. The premium S1 Pro and S1 Air are priced at Rs 1,34,999 and Rs 1,07,499, while more affordable variants such as the S1 X start at Rs 74,999.

One of the standout features of the new S1 models is the portable battery, which can double as an inverter to power small household appliances, such as lights and fans, via the Ola PowerPod. This innovative feature is designed to enhance the usability of Ola’s electric scooters, making them more appealing to urban customers and gig workers alike.

A 40% Stock Surge in Just 5 Days

Ola Electric’s stock has surged by a striking 40% in the past five trading sessions, marking a strong recovery after its stock dropped from its all-time high of Rs 157.40 in mid-August. Currently, the stock is trading about 20.8% higher than its IPO price of Rs 76. Analysts are optimistic that the upward momentum will continue as the company continues to scale production and expand its product offerings.

Despite the recent surge, Ola Electric remains focused on overcoming challenges such as service issues and growing competition in the EV market. The company’s aggressive investment in technology and infrastructure, particularly in Li-ion cell manufacturing, gives it a competitive edge, and analysts believe it will be able to weather market challenges in the long run.

Ola Electric’s large-scale production capabilities and its ability to scale efficiently should contribute to improved profitability in the coming years, as economies of scale take effect.

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