Ola Electric shares down 4% to slip below Rs 100 mark; should you 'capitalise' on this dip?

Ola Electric Mobility Ltd shares fell 4.26 per cent to hit a day-low value of Rs 97.85 in Monday's trade. The stock was last seen trading 1.81 per cent lower at Rs 100.35. At this price, it has declined 36.30 per cent from its record high of Rs 157.53, a level seen on August 20, 2024. Despite the mentioned drop, the scrip has gained 32.04 per cent from its initial public offering (IPO) price of Rs 76.

The company recently said it will double its company-owned service network to 1,000 centres by December 2024. It also announced its EV Service Training Program with the aim of training 1 lakh third-party mechanics under the 'Network Partner Program'.

"Starting on October 10, 2024, the company will provide a quick-service guarantee, in a phased manner. Customers – whose service case takes longer than one day – will be provided with a backup Ola S1 scooter, giving them a stress-free service experience," Ola stated. The move came at a time when the EV maker has been facing service-related issues.

An analyst recommended that investors should not look to 'capitalise' on this dip and referred to Ola Electric's stock downward move as 'profit-booking'. "For the medium- to short-term, one must keep trailing stop loss," the other analyst said.

"Ola Electric has been in a consolidation phase after giving over 100 per cent returns post-listing. We need to monitor the next quarterly results. Investors with a long-term view can continue to hold on to it. For the medium- to short-term, one must keep trailing stop loss," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"The current market behaviour of Ola Electric's share price indicates a profit-booking rally and aligns with what is commonly called 'IPO disease'. This term describes the tendency for newly public companies to initially experience a substantial surge in stock price, followed by a rapid decline or a struggle to maintain momentum after the initial trading period. As such, we advise against attempting to capitalise on the stock's lowest point and recommend exercising patience until confirmation indicates limited drawdowns," said Kushal Gandhi, Technical Analyst at StoxBox.

"The stock has witnessed a decent erosion from its peak zone of Rs 157. It can further slip towards Rs 94 level in the near term. For the bias to improve, the stock needs to cross above Rs 112 decisively, and thereafter, we can anticipate a further rise," said Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.

On the stock-specific front, around 58.91 lakh shares changed hands on BSE at the time of writing this story today. The figure was lower than the two-week average volume of 70.64 lakh shares. Turnover on the counter came at Rs 58.64 crore, commanding a market capitalisation (m-cap) of Rs 44,284.73 crore.

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 August 8, 2024, promoters held a 36.78 per cent stake in the E2W player.