Goldman Sachs Cuts Ola Electric Share Price Target Amid Falling Market Share
Goldman Sachs, a multinational investment bank, has reduced its share price target for Ola Electric Mobility Ltd., citing a moderation in market share in electric two-wheelers. The company’s market share has fallen from 20% to sub 15% over the last six months, which analysts have factored into their second-quarter earnings estimates, according to a client note.
Market Share Decline and Competition
Hero MotoCorp has overtaken Ola Electric to become the fourth-largest EV seller in India, according to the latest Vahan retail data. Bajaj Auto, TVS Motor, and Ather Energy are the other leaders in the electric two-wheeler market. This increased competition has led to a decline in Ola Electric’s market share, prompting Goldman Sachs to revise its price target.
The 12-month price target for Ola Electric has been reduced from Rs 72 to Rs 62 per share. Despite this, the firm has retained its ‘buy’ rating on the company, indicating a positive outlook on Ola Electric’s long-term prospects. To learn more about the Indian stock market and its trends, visit our website.
Ola Electric’s Foray into Lithium-Ion Battery Energy Storage
Ola Electric has announced its entry into the lithium-ion battery energy storage market, which is expected to be a significant growth area for the company. The company launched ‘Ola Shakti’, a residential BESS solution, this month. The system will scale from residential applications to grid-scale deployments, all anchored by the same 4680 Bharat Cell technology platform and produced at the Ola Gigafactory.
With its entry into the BESS market, Ola Electric expects its annual consumption for BESS to scale up to 5 GWh in the next couple of years. However, as noted by Goldman Sachs, Ola Electric will be a standalone battery energy storage provider competing with players who can offer integrated solutions for power backup, so it remains to be seen how strong the market share pickup can be in this segment. For more information on electric two-wheelers in India, click here.
Share Price Movement and Fundraising Plans
Ola Electric share price settled 0.5% higher at Rs 53.67 on the BSE on Thursday, compared to a 0.15% rise in the benchmark Sensex. The stock has fallen 41% since listing in August 2024. It is down 38% so far this year. The board is due to meet on Saturday to discuss fundraising plans via equity, which may help the company to invest in new growth areas and bolster its market share.
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Conclusion
In conclusion, Goldman Sachs’ reduction of Ola Electric’s share price target is a significant development for the company and its investors. While the decline in market share is a concern, Ola Electric’s entry into the lithium-ion battery energy storage market and its plans for fundraising via equity may help the company to regain its momentum. As the Indian stock market continues to evolve, it is essential for investors to stay informed and adapt to the changing trends and developments. For more information on Indian stock market trends, visit our website.
