Ola Electric Mobility shares oversold, can hit Rs 140 level in 1-3 months: Anand Rathi

Shares of recent debutant Ola Electric Mobility Ltd climb 5 per cent in Thursday's trade and if one were to go by Anand Rathi, the stock has potential to surge 46 per cent over the next 1-3 months. The domestic brokearge suggested a target of Rs 140 on the stock, which hints at a 25 per cent upside over the prevailing stock price. 

Ola Electric rallied sharply over its IPO issue price of Rs 76, before witnessing a corrective move. It retraced almost 61.8 per cent of the entire rally, Anand Rathi said. 

"Although, we don’t have much price history for the stock but for short term the stock looks oversold. Even the fundaments suggest that the stock has great potential. Thus, we advise traders to go long in the stock between Rs 107.50–112.50 with a stop loss of 95 for the upside target of 140 in the coming months," the brokerage said.

The Ola Electric, which got listed on August 9, hit a high of Rs 157.53 on August 20. Since then, it is down 35 per cent over that level. This is despite Thursday's 5 per cent jump on the counter. 

Anand Rathi said Ola Electric is a pure EV player in India and delivered seven products till date. It entered EV motorcycle segment in August and launched Roadster portfolio - Roaster X,  Roadster & Roadster Pro with prices starting from 74,000 to Rs 19,9000 per unit.

Ola Electric is investing big in battery cell manufacturing -- the backbone of  EV Infra. It is building EV hubs in Krishnagiri and Dharmapuri in Tamil Nadu  & Ola Gigafactory, Anand Rathi said adding that "growth prospects look promising with new launches in EV bike space."

HSBC last month initiated coverage on the stock with a target price of Rs 140, saying Ola is India’s market leader in electric scooters (e2Ws) and the country’s flag-bearer for EVs. That is because not only did Ola sell 49 per cent of all e2Ws in 1QFY25, but it also aims to build most of the required EV parts in India, especially the all-important battery, the foreign brokerage said. 

"Ola’s go- to-market and localisation efforts are noteworthy and should attract investors looking to play the electrification theme in India. Admittedly, there are many concerns too – first among those is EV penetration remains slow and gradual. Competition also looks set to
remain intense, especially from incumbents, while the outlook for regulatory support is
uncertain and there are battery manufacturing risks," it said.