Ola Electric Sees 16% Stock Hike During Mixed Q1 Financial Results

Following the release of the company's Q1 financial report for the June 2024 quarter, shares of Ola Electric Mobility saw a roughly 16 percent surge during Friday's trading session, ending at Rs 128.09. The company's revenue increased by more than 32 per cent in spite of reporting a wider net loss of Rs 347 crore.

The freshly listed electric vehicle (EV) maker, Ola Electric Mobility, saw a 15.77 per cent increase in its stock price on Friday due to a combination of positive outlooks and mixed performance. For the quarter ending 30 June, 2024, the company's total net loss increased by 30 per cent year over year to Rs 347 crore from Rs 267 crore the year before. Nonetheless, operating revenue increased significantly by 32.3 per cent to Rs 1,644 crore, while the company's EBITDA loss was Rs 205 crore.

Ola Electric's stock had initially listed flat after its initial public offering (IPO), which raised Rs 6,145.56 crore by offering shares at Rs 76 each. However, it eventually rose to Rs 130, signifying a 71 per cent rise. With a 68.5 per cent gain from its IPO price, the stock has maintained its strong performance.

The recent increase in stocks has been attributed to HSBC's 'buy' rating at the time of covering beginning. The broking firm, although admitting hurdles such as slow uptake of e2-wheelers and problems with battery plants, forecasts considerable reductions in EV production costs by FY27/28 and emphasises the potential success of Ola's battery business. Ola Electric's target price has been established by HSBC at Rs 140.

Saji John, Senior Research Analyst at Geojit Financial Services, emphasised that although Ola faces challenges with profitability right now, its scalability and vertical integration may improve profitability in the long run. He also thinks that Ola's success would encourage more industry investment in EV development.

Nomura's recent research, which noted the challenges encountered by electric bikes and the underwhelming results of recent launches in the class, reflected a cautious but positive outlook. Nonetheless, they predict that by FY30, EVs would account for 25 per cent of the two-wheeler industry, highlighting the possibility that Ola's wide range of products will pique customers' curiosity.