New Delhi, Aug 24: Bhavish Aggarwal-led recently listed Ola Electric is fast losing market share to its rivals amid increasing competition in the domestic electric two-wheeler market and market analysts have warned investors to remain “cautious” amid the volatile stock.
According to a recent report by Jefferies, TVS and Bajaj have expanded their portfolios to include more affordable electric two-wheelers. The move has helped them gain between 4 and 7 percent market share each, with TVS now holding 19 percent and Bajaj 18 percent.
According to the report, Ola Electric’s market share in the electric two-wheeler market has declined month-on-month from 49 percent in the June quarter (Q1 FY25) to 33 percent in August.
Market observers said that while Ola Electric’s long-term potential could be attractive, especially given the favorable outlook for the electric vehicle market, the current valuation appears quite speculative.
“Investors should be cautious, especially given the company’s ongoing losses and high volatility in its share price. For new investors, it may be wise to wait for a more stable entry point or consider the stock as a long-term investment with a high risk-reward ratio,” said Saji John, senior research analyst at Geojit Financial Services.
According to analysts, the introduction of cheaper electric vehicles and aggressive price discounts by established manufacturers TVS and Bajaj are helping them take market share from their rival Ola Electric.
Ola Electric shares continued to fall, closing at Rs 126.26 apiece on Friday. The stock is now trading about 20 percent lower from its all-time high.
To boost its prospects, the company unveiled electric motorcycles in various price ranges last week.
While motorcycles dominate the broader two-wheeler market in India, their share in the electric vehicle segment currently stands at just 1 percent.
Jefferies stressed that the success of Ola Electric’s new model will depend on its performance on the road and the overall profitability of electric bikes in India. Motorcycles dominate the Indian two-wheeler market, accounting for 63 percent of the total volume.
Jefferies expects the market share of electric two-wheelers to increase from the current 5.6 percent to 13 percent by the 2027 fiscal year.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor.
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