Ola Electric, the electric vehicle arm of ride-hailing giant Ola, saw its stock plummet to an all-time low. The company's shares were trading at Rs 103 apiece on Wednesday morning, marking a drastic 35% drop from its peak value of Rs 157.40. This significant downturn has been attributed to a combination of factors, including speculative valuation, increasing competition, and a declining market share.
Ola Electric, spearheaded by Bhavish Aggarwal, has been facing stiff competition from rivals such as TVS Motor and Bajaj Auto. This has resulted in a steady erosion of the company's market share, which fell to 31% last month. The company's sales have also taken a hit, with the firm recording its lowest monthly sales last month, a sequential drop of 34% to 27,506 units.
Market analysts have been cautioning individual traders against bullish investment in Ola Electric's stock, citing its speculative valuation amid the rising competition. The stock is currently loss-making and trading at high valuations, which has raised concerns among investors and market watchers.
Santosh Meena, Head of Research at Swastika Investmart Ltd., echoed these sentiments, stating, While the growth outlook remains strong, concerns over valuation and competition mean only aggressive investors should consider staying invested. This advice underscores the inherent risks associated with investing in a company like Ola Electric, which is currently grappling with multiple challenges.
The company's woes have been compounded by a recent incident in Karnataka, where an aggrieved customer set fire to an Ola Electric showroom. The customer, who had recently purchased an Ola electric scooter, was reportedly frustrated with the repeated breakdowns of his vehicle and the subsequent visits to the showroom for repair work. This incident has highlighted the growing dissatisfaction among Ola Electric's customers, with the company reportedly receiving around 80,000 complaints monthly, overwhelming its service centres.
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