Dream run continues for Ola as stock zooms another 20%


Shares of Ola Electric Mobility Ltd surged 20 per cent on Friday to hit the upper circuit limit on the BSE at ₹132.76 after the Bhavish Aggarwal-led EV maker announced its foray into the electric motorcycle segment with the launch of three models and two more in the pipeline.

Investors in the IPO must be laughing all the way, as shares of the pure electric vehicle company jumped nearly 75 per cent against the IPO price of ₹76.

According to HSBC Global Research, despite its conservative view on EV penetration in India along with other uncertainties, the global advisory firm believes Ola is still worth investing in.

The company announced plans to integrate its own cells into its vehicles starting in Q1 FY26. Bhavish Aggarwal, Founder and CMD of Ola Electric, said two-thirds of the two-wheeler market comprises motorcycles. He emphasised that Ola’s entry into the motorcycle segment will further accelerate EV penetration, building on its success in the scooter segment.

Loss widens YOY

Meanwhile, Ola Electric Mobility on Wednesday reported revenue from operations of ₹1,644 crore for Q1 — up 32.3 per cent from ₹1,243 crore in the corresponding quarter last year. However, its consolidated loss widened to ₹347 crore (₹267 crore). But, on a sequential basis, the net loss narrowed from ₹416 crore.

The June quarter has been a “good quarter” in terms of growth and profitability, Aggarwal said in a post-earnings call.

The group has also rebranded its ride-hailing service as Ola Consumer announced a partnership with Open Network of Digital Commerce (ONDC) and launched automated warehousing solutions to cater to quick commerce requirements.

Ola’s artificial intelligence arm, Krutrim, will be manufacturing a set of chips called Bodhi for AI, Sarv for General Compute and Ojas for Edge. The company plans to design and produce India’s first AI silicon chip by 2026, tailored for complex AI workload, it further said.

Brokerages upbeat

HSBC, which initiated Ola with a Buy call and a target price of ₹140, said: Ola is India’s market leader in electric scooters (e2Ws) and the country’s flag-bearer for EVs. That’s because not only did Ola sell 49 per cent of all e2Ws in 1QFY25, but it also aims to build most of the required EV parts in India, especially the all-important battery, it said.

“Ola’s goto-market and localisation efforts are noteworthy and should attract investors looking to play the electrification theme in India. Admittedly, there are many concerns too – first among those is EV penetration remains slow and gradual. Competition also looks set to remain intense, especially from incumbents, while the outlook for regulatory support is uncertain and there are battery manufacturing risks,” it added.

HSBC used a DCF methodology to value Ola Electric. “We use a WACC of 10 per cent and a long-term growth rate of 7.5 per cent . Our target price implies FY28e price/sales of 2.9x and an EV/EBITDA of 39x. We also provide sensitivity matrix to gauge the sensitivity of Ola’s valuation to different parameters.”

Key risks

Slower-than-expected penetration of e2Ws in the country, battery plant issues including failure to expand capacity, loss of market share due to increasing competition, negative movement in battery prices and removal of incentives/subsidies by the government are key risks for its bullish call, the foreign brokerage said.



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