Ola Electric Mobility Ltd. shares experienced significant selling pressure on Tuesday, falling over 4% to an intraday low of ₹36.30 before recovering to trade near the day's high at ₹38.01, up 0.4% around 2 pm. According to CNBC TV18, the stock has fallen 32.39% in the last 12 months but has risen over 1% year-to-date, reflecting mixed investor sentiment amid the company's ongoing transition phase. The stock's performance reflects continued investor concerns over the brokerage's negative outlook on the electric vehicle manufacturer, despite recent operational improvements.
HSBC maintained its bearish stance on Ola Electric, retaining a 'reduce' rating on the counter with a target price of ₹24. As reported by CNBC TV18, the brokerage's target price implies a 37% downside from Monday's closing price of ₹37.86, reinforcing their negative outlook on the electric vehicle manufacturer. The brokerage acknowledged positive developments, noting fast acceleration of battery manufacturing and localisation at the company's Gigafactory. HSBC expects battery yields to improve to around 90% from 70% over the next 6-9 months, highlighting the company's operational improvements despite broader concerns about weaker-than-expected performance and low confidence in company estimates. However, HSBC identified brand rebuilding and execution as key monitorables that could impact future performance.
After visiting Ola Electric's Gigafactory and future factory, HSBC underlined that Gigafactory capacity has reached 6 gigawatt-hours (GWh). The brokerage noted that Ola's future factory reflects automation and vertical integration supporting management's claim of better operating margins. HSBC praised the company's localisation push, diversification attempts beyond China for equipment sourcing, and highlighted Ola's 4680 cell with proprietary dry-cathode technology as a cost cutter that can reduce operating costs by 20-30% versus wet-cathode processing. The company's dealer count is set to jump from 30 to about 150 by Navratri, with HSBC not viewing unsold inventory as a red flag.
Ola Electric has scheduled a board meeting for October 5 to consider a proposed rights issue of partly paid-up equity shares to raise up to ₹1,000 crore. According to CNBC TV18, the board will consider various terms including the rights issue price, payment mechanism, rights entitlement ratio, record date and timing of the issue, subject to receipt of in-principle approvals from stock exchanges or regulatory authorities. This rights issue represents a significant capital raising initiative as the company continues its operational restructuring efforts.
According to Bloomberg analyst data, six of eight analysts tracking Ola Electric Mobility have a 'sell' rating, while two have a 'hold' rating and none have a 'buy' rating. The 12-month consensus target price is ₹29.14, below the stock's current trading level of ₹38.01. The stock's performance on Tuesday contrasted sharply with the broader market sentiment, as reported by CNBC TV18, with the benchmark Nifty index showing relatively modest declines, indicating that investor focus remained concentrated on the electric vehicle manufacturer's prospects amid ongoing execution and brand rebuilding challenges.
