Ola Electric Mobility Ltd. falls on the bearish side for HSBC, even as the brokerage acknowledged a fast acceleration of its battery manufacturing and localisation.
The brokerage has a 'Reduce' rating on Ola Electric's stock, with its target price of Rs 24 implying a 37.6% downside from the last closing price as it priced in weaker-than-expected performance and low confidence in the company's estimates.
On the upside, HSBC noted Ola Electric's battery ramp-up and expects the company's yields to improve to around 90% from 70% over the next 6-9 months.
After visiting Ola Electric's Giga factory (battery plant) and future factory (electric vehicle plant), the brokerage underlined that its Gigafactory capacity has reached 6 gigawatt-hours (GWh).
"Ola future factory reflects automation and vertical integration supporting management's claim of better operating margins," HSBC stated, adding that rebuilding of brand image and management's commitment to delivery remain key monitorables for the company's journey.
The brokerage also praised the EV giant's localisation push, diversification attempts beyond China for equipment sourcing, and higher energy density and yield among many other factors.
It highlighted Ola's 4680 cell with proprietary dry-cathode technology as a cost cutter. The company believes that the technology can reduce operating costs by 20–30% versus wet-cathode processing. Further, Ola Electric's dealer count is set to jump from 30 to about 150 by Navratri, with HSBC not viewing unsold inventory as a red flag.
Ola Electric Q1 FY27 Recap
Ola Electric reported a narrower consolidated net loss for the first quarter of FY27, even as revenue declined sharply from a year ago, reflecting the company's ongoing transition following a major operational reset undertaken in FY26.
The electric two-wheeler maker posted a consolidated net loss of Rs 336 crore in quarter ended June, compared with a loss of Rs 428 crore in the corresponding quarter last year. Revenue from operations fell 45% year-on-year to Rs 455 crore from Rs 828 crore, while Ebitda loss narrowed to Rs 165 crore from Rs 237 crore a year earlier. Other income also declined to Rs 29 crore from Rs 68 crore.
Despite the year-on-year decline, Ola Electric highlighted a strong sequential recovery in its automotive business, describing first quarter of this fiscal as the first full quarter after its operational restructuring efforts.
Ola Share Price
The company's stock took a hit in trade on Monday and fell as much as 3.5% to Rs 36.53, compared to a 0.86% fall in the benchmark Nifty index and a 0.7% fall in the entire auto sector.
The shares traded 3.3% lower at Rs 36.62 apiece as of 10:11 a.m. on the NSE. It has fallen 32.39% in the last 12 months, but risen over 1% year-to-date.
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