HSBC has initiated coverage of Ola Electric Mobility Ltd. with a ‘buy’ rating and a target price of Rs 140, implying a 26.2% upside potential. The brokerage firm is optimistic about Ola Electric’s competitive pricing strategy against petrol-burning scooters and its promising battery venture.
As the market leader in electric scooters, Ola Electric faces challenges like slower EV adoption and potential battery plant hurdles. However, HSBC anticipates that improved costs of ownership and increased consumer awareness will drive further growth.
The company’s plans to build an in-house battery manufacturing plant in Tamil Nadu by mid-2026 are crucial. If successful, this venture could reduce battery costs and increase profitability.
Despite the positive outlook, HSBC identifies risks like slower-than-expected adoption, challenges in expanding capacity, intensifying competition, and potential removal of government incentives.
Ola Electric’s shares rose 18.76% to Rs 131.71, with a 44% increase since listing. The stock’s relative strength index stood at 89.2, indicating a strong uptrend.
