Ola Shares Surge Over 20%, Give Over 72% Returns Within A Week After IPO

Ola Electric Mobility's share price has experienced a notable rise, surging 20% on friday to reach Rs 132.76 on the BSE. This increase marks a 72.39% gain in the past week since the company's IPO debut on august 9.

The boost in ola Electric's stock price follows the company's announcement on thursday of its expansion into the electric motorcycle market, introducing three new models with plans for two additional models in the future. The shares were initially listed on august 9 at Rs 75.99 each, slightly below the issue price of Rs 76. Since then, the stock has soared over 72% within a week.

On Wednesday, ola Electric reported a higher consolidated loss of Rs 347 crore for the April-June quarter of 2024-25, compared to Rs 267 crore in the same period the previous year. However, its revenue for the quarter increased to Rs 1,644 crore from Rs 1,243 crore year-over-year. Despite the losses, the company noted significant improvement in the EBITDA margin of its electric two-wheeler (E2W) segment, approaching breakeven.

Since its IPO, ola Electric's shares have gained over 60%. The company has attracted considerable interest, including its first 'buy' recommendation from brokerage HSBC, which set a price target of Rs 140. HSBC predicts a potential drop in EV manufacturing costs by FY27/28 and an increase in the cost of internal combustion engine scooters due to stricter emission standards. The firm also suggests that while the transition to electric two-wheelers may become easier, Ola’s battery venture has strong potential for success.In its recent report, Nomura said motorcycles have been a tougher segment for electrification and the last few launches including Tork, Revolt, Ultraviolette and more have not been successful. However, it estimates 25 per cent on EVs in two-wheelers by FY30.

“With multiple price points and range options from ola, it would be interesting to watch how customers respond to them,” Namura added.
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Balasahana Suresh

16/08/2024 03:59 PM