Shares of new debutant Ola Electric Mobility Ltd rose 5% on Thursday, and according to Anand Rathi, the stock has the potential to increase by 46% over the next 1-3 months. The local brokerage proposed a target price of Rs 140 for the shares, which represents a 25% increase over the current stock price.
Ola Electric surged over its IPO issue price of Rs 76 before experiencing a correction. It retraced over 61.8 percent of the rise, according to Anand Rathi.
"While we don't have much price history for the stock, it appears to be oversold in the short term. Even the fundamentals indicate that the stock has significant potential. Thus, we recommend that traders go long in the stock between Rs 107.50-112.50 with a stop loss of 95 for an upside objective of 140 in the coming months," the brokerage said.
Ola Electric, which was launched on August 9, reached a high of Rs 157.53 on August 20. Since then, it is down 35% from that level. Despite a 5% increase in the stock price on Thursday.
Anand Rathi stated that Ola Electric is a pure EV player in India, having delivered seven items to far. It joined the EV motorbike category in August, launching the Roadster portfolio, which includes the Roaster X, Roadster, and Roadster Pro, with costs ranging from Rs 74,000 to Rs 19,9000 per unit.
Ola Electric is investing heavily in battery cell production, which is the backbone of EV infrastructure. It is establishing EV hubs in Krishnagiri and Dharmapuri in Tamil Nadu, as well as the Ola Gigafactory Anand Rathi stated that "growth prospects look promising with new launches in the EV bike space."
Last month, HSBC launched coverage of the stock with a target price of Rs 140, stating that Ola is India's market leader in electric scooters (e2Ws) and the country's EV flag-bearer. That is because, in addition to selling 49% of all e2Ws in 1QFY25, Ola plans to manufacture the majority of the essential EV parts in India, including the all-important battery, according to the international brokerage.
"Ola's go-to-market and localization initiatives are significant, and they could attract investors interested in the electrification subject in India. Admittedly, there are numerous worries, the first of which is that EV uptake remains slow and gradual. Competition is also expected to continue fierce, particularly from incumbents, while the prognosis for regulatory support is unknown, and there are battery production challenges," it stated.
