Ola Electric's recent market share loss a cause of worry, says HSBC

Brokerage firm HSBC is worried about the recent market share loss for the recently listed Ola Electric Mobility. The brokerage sees a 15-20 percent downside risk to its FY25/26 volume estimates for Ola if the current market share trend sustains.

This comes after the company clocked in its lowest monthly sales for 2024, at 27,506 units in August, down 34 percent on month. The decline in monthly sales also eroded Ola Electric's market share to 31 percent as compared to the 49 percent share it held at the end of the June quarter.

On the other hand, rivals TVS and Bajaj Auto held their ground, commanding a 20 percent and 19 percent market share in electric two-wheelers in August. HSBC attributed the recent market share loss for Ola to the ramp-up of low cost variants from its competitors. Other EV two-wheeler models--TVS iQube and Bajaj Chetak--witnessed a surge in volumes in August.

Nonetheless, despite the recent blip in sales, HSBC still remains hopeful of a recovery for Ola and hence, retained its 'buy' call on the stock, with a price target of Rs 140, implying a 24 percent upside potential from the previous close.