Ola Electric Mobility: From 57% Gains to Volatile Trading – What’s Next?

Shares of Ola Electric Mobility rose from INR 76 to a high of INR 157.53 within a week, briefly outpacing Tesla's valuation.

However, the profit-making process caused the following session to drop 22%. Today, the stock rebounded 7.7%, with the lock-in period ending tomorrow.
 

One of the most perplexing stock market listings in recent times is Ola Electric Mobility, a modest debut company. It registered at a high bar price of Rs 76, but the share price has soared. It doubled in just 7 days to an all-time high of Rs 157.53. At its peak, Ola Electric’s valuation briefly surpassed that of Tesla, listed on Wall Street.
 

The stock, which was listed in August, has already provided investors with a turbulent experience. Not long after that, it also came under heavy pressure, falling 22% over five trading sessions amid profit-taking.
 

Intraday Surge, Lock-In Period Expiry, and Broker Insights

Shares of Ola Electric Mobility fell in the latest session but rose 7.7% during the latest intraday trade.
 

Moreover, the lock-in period for 50% of the company's shares—about 18.18 crore shares, or 4% of the total outstanding shares, held by Nuwama. Additionally, the 6th of September was the last date to anchor lock-in period for 50% of the company’s shares.
 

Even with limited price history, domestic broker Anand Rathi expects a 54% upside for the stock and sets a price target of Rs 170.
 

"Although we don't have much of a price history for the stock for the short term, the stock looks oversold. Even the fundamentals suggest that the stock has great potential," said the domestic brokerage firm in its report.
 

To this end, Anand rathi advises traders to consider going long on the stock in the range of INR 107.5 – 112.5 with a stop-loss set at INR 95 and an upside target of INR 140 upcoming.
 

Shortly after the listing, global brokerage HSBC began reporting on the company. The target price is set at 140 rupees.
 

"We use a DCF methodology to value Ola Electric. We use a WACC of 10.0% and a long-term growth rate of 75%. Our target price implies FY28e price/sales of 2.9x and 39x. We also provide a sensitivity matrix to gauge the sensitivity of Ola's valuation to different parameters. On ESG, Ola's Future factory is all women with a capacity of 20,000 employees," said HSBC's Yogesh Aggarwal.
 

For the first quarter ended June 2024, the company's revenue rose 32% year-on-year. However, the quarterly loss widened to Rs 3470 crore as compared to Rs 267 crore in the year-ago quarter.
 

The stock has been down 11.84% over the past two weeks, but it traded 6.86% higher at INR 118.35 around 3:00 PM in BSE state.

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