Ola Electric shares dived 6% today; should you enter at current levels?

Ola Electric Mobility Ltd shares on Monday extended their fall for the fourth consecutive session. The stock plunged 6.09 per cent to settle at Rs 81.66. At this price, it has corrected 48.16 per cent from its record-high value of Rs 157.53, a level seen on August 20, 2024. In spite of the said drop, the scrip was up 7.45 per cent from its listing price of Rs 76.

The electric two-wheeler maker has been facing several service-related issues. The Bhavish Aggarwal-led firm was also asked to respond to a show cause notice regarding alleged violations of consumer rights, misleading advertisement and unfair trade practices. Ola Electric, on its part, said the notice has no impact on financial, operational or other activities for now.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said "Ola Electric continued its downward move. Investors with a high-risk appetite can hold on to the stock. One can also consider entering at current levels but only with a long-term view."

The market specialist mentioned that the company results remain crucial at this point of time. "Ola Electric has gained the market share but breakeven and profitability are the key parameters that will be closely watched after the recent uproar on social media over service-related issues. The stock will continue to remain weak on a medium- to short-term perspective," Bathini stated.

Atul Parakh, chief executive at Bigul, said, "Ola Electric's growth trajectory is currently influenced by its pricing and market penetration strategies in the EV segment. The company's recent clarification regarding the S1 X 2KWh model pricing, including its festive campaign offering Rs 5,000 general discounts and selective Rs 25,000 discounts on limited inventory, indicates its focus on market expansion. However, regulatory oversight from ARAI and the need for pricing transparency could present operational challenges in the evolving EV market landscape."

Technically, the counter looked 'weak' on daily charts. Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "The stock looked weak on daily charts and can slip towards Rs 75 level."

The company's consolidated net loss widened to Rs 347 crore in the April-June quarter (Q1 FY25) from Rs 267 crore in the year-ago quarter.

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.