Ola Electric shares skid 7% after 2-day rally as VAHAN data cools sentiment

Time of India

19 hours ago

Shares of
Ola Electric Mobility
fell as much as 7.2% to Rs 49.48 on the BSE on Thursday, as fresh
VAHAN registration data
cooled investor sentiment after a two-day rally that drove the stock up 29% to a near three-month high.
The pullback came after VAHAN registration data showed
Ola Electric
trailing rival
Ather Energy
in August sales. As of August 20, Ola Electric had recorded 9,522 registrations compared with Ather's 10,248. If the trend persists, Ola's market share is set to slip below that of its competitor.
Ola shares had surged 9% on Tuesday and another 20% on Wednesday, marking gains in four of the past five sessions before Thursday's reversal.
GST uncertainty
The weak showing comes amid uncertainty over the Goods and Services Tax (GST) policy. Prime Minister Narendra Modi said last week that the government plans to lower GST rates on several goods and services by Diwali, with proposals including a cut on small cars to 18% from 28%.
HSBC Global Research said the move 'may positively impact auto demand, though OEM-wise impact may vary,' while cautioning it could hurt
electric vehicles
if states respond by raising road taxes. Nomura added, 'if the GST cut on ICE happens, it is likely to significantly impact EV adoption… as the price gap between EVs (taxed at 5%) and ICE (taxed at 28% plus cess) would increase sharply.'
Earnings picture
Ola's first quarter results reflected year-on-year weakness but showed sequential improvement. The company narrowed losses and improved revenue compared with the previous quarter, with gross margins expanding by 1,100 basis points quarter-on-quarter and 740 basis points year-on-year to reach 26% by June-end. Management has guided gross margins of 35% to 40% for the full year and expects its auto business to turn EBITDA positive in the second quarter, with full-year EBITDA margins likely above 5%.
Still, challenges remain. For the June quarter, Ola Electric posted a consolidated net loss of Rs 428 crore, up 23% year-on-year, as revenues halved to Rs 828 crore. EBITDA losses widened to Rs 237 crore, with margins slipping to -28.6% from -12.5% a year earlier.
Market view
Some analysts argue investors are focusing on Ola's long-term potential despite near-term volatility. 'The stock's performance underscores the market's focus on operational execution and the company's expansion trajectory rather than short-term policy noise,' said Anirudh Garg, Partner and Fund Manager at INVasset PMS.
Garg said that a GST cut on small cars and two-wheelers could pose 'a near-term challenge' by making ICE vehicles cheaper, but noted that Ola's Gen-4 platform across electric cars, rickshaws and light commercial vehicles supports its long-term strategy.
Technicals still stretched
Shares of Ola Electric are down 42% so far in 2025 and 64% over the past year. The stock continues to trade below long-term averages, with a Relative Strength Index of 79.8, above the 70 mark considered overbought, signalling potential for further pullback. However, the MACD at 0.7 remains above its centre and signal lines, pointing to a bullish bias.
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(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)