Ola Electric Mobility Share Price Slumps Nearly 10% — Should You Sell Or Buy?

Ola Electric Mobility share price slumped nearly 10% in Friday's session as its net loss doubled in fourth quarter because of one-time warranty costs. The share price is currently trading near three-week low.

The firm reported a 109% year-on-year increase in its consolidated net loss in the fourth quarter. Its net loss stood at Rs 870.00 crore versus Rs 416.00 crore in the corresponding period a year ago.

Ola Electric Mobility's net loss increased during January–March as it announced a one-off warranty cost of Rs 250 crore. However, the company does not expect any more one-off warranty costs from here on.

Its revenue declined 61.8% on the year to Rs 611.00 crore from Rs 1,598.00 crore, as its sales dwindled during January–March. Operating profit declined 123% on the year to Rs 695.00 crore versus Rs 312.00 crore.

Following the disappointed numbers, Goldman Sachs cut its target price on the stock to Rs 70 from Rs 75 apiece. The current target price implied 31.5% upside from Thursday's close price. The brokerage maintained a 'buy' rating.

Of the eight analysts tracking the company, four maintain a 'buy' rating on the stock, two recommend a 'hold', and two suggest a 'sell', according to Bloomberg data. The return potential on Ola Electric Mobility is 21.8%.

Kotak Securities and Ambit Capital recommend a 'sell' for Ola Electric Mobility, while HSBC Global Research and Investec maintain 'hold' on the stock.

Ola Electric Mobility share price declined 9.73% to Rs 48.06 apiece, the lowest level since May 9. It pared losses to trade 5.33% lower at Rs 50.43 apiece as of 10:29 a.m., as compared to a 0.30% decline in the NSE Nifty 50.

The stock declined 33.97% in 12 months, and 41.5% on year-to-date basis. Total traded volume so far in the day stood at 4.8 times its 30-day average. The relative strength index was at 44.46.