Ola Electric share price: After a robust rally on the bourses and hitting an upper circuit of 20 per cent twice on exchanges, investor sentiment made a U-turn on the bourses. Ola Electric declined by nearly 10 per cent on Tuesday.
This came after nearly 3.1 crore shares of the company were traded on Tuesday, which represents 0.7 per cent of the total equity. The deal was valued at around Rs 468.3 crore, with each share priced at Rs 146, according to CNBCTV18.
On Tuesday, the shares of the company closed at Rs 137, down nearly 6 per cent on the National Stock Exchange.
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"Fundamentally, the stock does come across as weak, and this decline could signal that there is very little steam left in its upward trajectory. Although it's an exceptional name within the ride-hailing industry, Ola is trading at valuations that don't seem entirely justified by its financials. The firm remains in an unaudited loss position, and the weak book size it holds is an indication of struggles in reaching profitability," said Dr. Ravi Singh SVP - Retail Research Religare Broking Ltd.
While market sentiment has been largely positive recently owing to the robust listing of the automobile company, D-street analysts remain skeptical of the stock movement. Lack of profit figures and a negative PE ratio seem to erode investor confidence.
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What should investors do?
"Investors should be cautious, especially given the company's ongoing losses and the high volatility in its stock price. For new investors, it may be wise to wait for a more stable entry point or consider the stock as a long-term play with a high risk-reward ratio," said Saji John, Senior Research analyst, Geojit Financial Services.
Last week, the company launched three new motorcycles—Roadster X, Roadster and Roadster Pro in an event.
John believes that the launch is expected to have a positive impact owing to the first-mover advantage in the electric motorcycle segment.
"Ola is likely to see enhanced revenue visibility over the long term. This strategic move could further strengthen its position in the EV market, contributing to sustained growth in its share price," John added.
