Ola Electric shares down 34% from record high levels; is it time to enter or more downside possible?

Ola Electric Mobility Ltd shares continued their downward trend in Monday's session. The stock plunged 5.06 per cent to hit a day low of Rs 104.10. At this price, it has declined 33.92 per cent from its all-time high value of Rs 157.53, a level seen on August 20 last month. The scrip has traded lower in five out of six trading days in September so far. Also, Ola Electric's one-month lock-in period ended today as the stock was listed on the bourses on August 9.

Analysts largely suggested that the stock looked 'bearish' at current levels. Investors with a high-risk appetite and a long-term view should only consider investing, one of them said.

"If you live in the FOMO (fear of missing out) factor, please don't jump into the stock. At Rs 76, we have given a 'Subscribe' recommendation with a long-term view. After hitting a record high of Rs 157.53, the counter started correcting because there was too much hype. The company has a significant loss on its balance sheet, which will take a long time to come into black and then into blue and green. The introduction of electric motorcycles on August 15 will be available to people, in case we book it, possibly next year by Diwali. By that time, there is going to be huge competition coming in. Giga cell factory will take some time for the production to come through," Gaurang Shah, Senior VP at Geojit Financial, told Business Today TV.

In a nutshell, the market veteran underscored that investors with a high-risk appetite and long-term view could consider investing in Ola.

Technically, support on the counter could be seen at Rs 100 level. "After a stellar run-up despite a consistently negative bottomline and high debt, not surprisingly, Ola Electric Mobility looked very overvalued and bearish at current price levels with strong support now at Rs 100. A daily close below this support could lead to a target of Rs 76 in the near term. Strong resistance will be at Rs 120," said Sebi-registered research analyst AR Ramachandran.

"The stock looked weak on daily charts and can slip towards Rs 100 level. So, one should not buy at current levels," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.

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

Ola Electric was founded in 2017. It 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 August 8, 2024, promoters held a 36.78 per cent stake in the E2W player.