This recently listed IPO has zoomed 75% against its issue price in 5 days

This recently listed IPO has zoomed 75% against its issue price in 5 days

Ola Electric Mobility share price today was locked in the 20-per cent upper circuit of 20 per cent at Rs 133.08, also its new high, on the National Stock Exchange (NSE) on Friday. Ola Electric is, now, valued at Rs 58,664 crore ($6.99 billion),

The rally in Ola Electric share price was aided by heavy volumes after the company, on Thursday, announced new products, including the 'Roadster' motorbike, and presented a future roadmap across the electric vehicle (EV) and energy verticals.

According to reports, global brokerage firm HSBC has initiated coverage on the stock with a 'buy' rating and a target price of Rs 140 per share.

 

Till 11:32 AM, 251 million equity shares had together changed hands on the NSE and BSE, and there were pending buy orders for 9.53 million shares on the exchanges. With today's rally, Ola Electric is trading 75 per cent higher against its issue price of Rs 76 per share. The company had made its stock market debut on August 9, 2024.

Ola Electric is a leading electric vehicle (EV) manufacturer in India, specialising in the vertical integration of technology and manufacturing for EVs and their components, including battery cells.

On August 15, Ola Electric entered the electric motorcycle segment as it launched 'Roadster', 'Roadster X' and 'Roadster Pro', and further announced the integration of its cells in its own vehicles starting Q1FY26.

Built on the scalable, modular, integrated Ola Motorcycles platform, the various 'Roadster' motorcycles sport a minimalist, futuristic and monolithic design language. Additionally, Ola Electric teased two of its upcoming models, 'Sportster' and 'Arrowhead'.

The company also announced integration of its own cells in its electric vehicles starting Q1FY26, giving it a strong competitive edge with highly efficient cost structures. The cell is currently under trial production at Ola’s Gigafactory.

Meanwhile, in the June 2024 quarter (Q1FY25), Ola Electric registered its highest-ever quarterly revenue of Rs 1,718 crore with 48.63 per cent market share. The revenue grew 34.2 per cent year-on-year (Y-o-Y) from Rs 1,279 crore reported in the previous year quarter (Q1FY24).

However, the company's Q1FY25 loss widened Y-o-Y to Rs 346 crore from Q1FY24 loss of Rs 268 crore. On a quarter-on-quarter (QoQ) basis, however, the company’s loss came down from Rs 418 crore.

At 125,198 units, the company witnessed the highest-ever deliveries of vehicles in Q1FY25 as against 70,575 units delivered in the same period last year. The company ramped up deliveries of its mass market scooter portfolio (S1 X portfolio) during the quarter which helped accelerate growth. The existing product portfolio (S1 Pro, S1 Air, S1 X+) also saw strong demand which continued growth momentum throughout the quarter.

In Q1FY25, company’s Automotive segment (E2W) posted a strong improvement in earnings before interest, tax, depreciation and amortisation (Ebitda) margin and is close to Ebitda breakeven. Automotive segment Ebitda margin for the quarter was (1.97) per cent, up 632 bps Y-o-Y from the (8.29) per cent in Q1FY24. The increasing scale of operations has benefited the company in the form of lower manufacturing costs and supply chain optimizations.

According to HSBC, Ola is worth investing in given sustained regulatory support. "Ola has the ability to reduce costs, with positive risk-reward in its battery venture. Slower penetration of e2-wheelers and battery plant issues are key downside risks," the brokerage firm reportedly said.

Meanwhile, the India 2-wheeler industry is projected to grow at a CAGR of 11 per cent, reaching a market size of Rs 2.8 trillion to Rs 3.6 trillion by FY28.

"With the current market share of 38 per cent year-to-date (YTD) and robust capex plan, Ola Electric is likely to act as a catalyst for boosting investors' confidence and could help accelerate the growth and adoption of electric two-wheelers across the country," according to Saji John, senior research analyst, Geojit Financial Services.

Ola Electric is the only automaker in India which has received approval for PLI schemes for both advanced automotive technology and cell chemistry batteries. Despite profitability challenges and a loss in FY24, the company is poised to enhance profitability in the long term through improved scalability and by vertical integration, the brokerage firm said.