Ola Electric Mobility shares jumped 6% today; will this upmove sustain?

Shares of Ola Electric Mobility Ltd surged 7.49 per cent on Monday to hit an intraday high of Rs 74.74. The stock eventually settled 5.67 per cent higher at Rs 73.47. At this price, it has crashed 53.36 per cent from its all-time high value of Rs 157.53, a level seen on August 20, 2024.

The electric vehicle (EV) maker narrowed its year-on-year (YoY) net loss to Rs 495 crore for the quarter ended September 2024 (Q2 FY25) from Rs 524 crore in the year-ago period. On the other hand, revenue from operations climbed 39 per cent (YoY) to Rs 1,214 crore in Q2 FY25.

During the quarter review, EBITDA (earnings before interest, taxes, depreciation and amortisation) losses were at Rs 223 crore compared to Rs 321 crore in the same period last year.

Ola Electric's chairman and managing director Bhavish Aggarwal said, "We are building 3-wheelers. The beauty is that it shares the same platform as our S1 in terms of electronics, battery architecture and powertrain, only the mechanicals are different. So, you see the 3-Wheelers product road map also in that chart."

Aggarwal also mentioned that the company will be coming up with a strong product line over the next two years. That said, Ola Electric was facing several service-related issues in the recent past.

Ola Electric has gained the market share but breakeven and profitability are the key parameters that will be closely watched as we move forward, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

Technically, support on the counter could be seen at Rs 67. Near-term resistance may be found in the Rs 78-86 range. A few analysts advised against initiating fresh positions at the current market price.

"For Ola Electric, the medium-term trend changes only above Rs 85-86 levels. So, wait for a confirmation above Rs 86 mark and then you can buy the stock with a stop loss of Rs 70," Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, told Business Today.

"Support will be Rs 67 and resistance at Rs 78. A decisive move above Rs 78 level may trigger a further upside of Rs 85. The expected trading range will be between Rs 65 and Rs 85 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

"There is currently insufficient price action evidence to confirm a potential technical rebound. Therefore, we advise against attempting to catch a falling knife and recommend waiting for a clearer signal, specifically a decisive closing above the crucial resistance level of Rs 85," said Kushal Gandhi, Technical Analyst, StoxBox.

Rudra Murthy BV, MD at Vachana Investments, too advised against entering the counter at current levels. "In the new-age space, I will avoid Ola Electric shares," he stated.

Founded in 2017, Ola Electric is a pure-play electric vehicle player that primarily manufactures electric vehicles and certain core components for electric vehicles such as battery packs, motors, and vehicle frames at the Ola Futurefactory. As of September 2024, promoters held a 36.78 per cent stake in the E2W player.