Fundamentals will not justify Ola Electric's share price, says Raamdeo Agrawal

Raamdeo Agrawal said he remains bullish on the two-wheeler space, and sees sustained and buoyant demand.

The relentless rally in Ola Electric's shares after a strong listing last week has made it difficult to justify the valuations, Veteran investor Raamdeo Agrawal has said.

"Current fundamentals will not justify the price," Raamdeo said on CNBC-TV18, however, the market is pricing in Ola's strong positioning in the EV space, and seems excited about its leadership in electric mobility. Ola claims to have near 49 percent market share in the electric two-wheeler space, though it is yet to become a profitable.

Ola Electric embarked on an ambitious electric motorcycle rollout, launching the 'Roadster' series, at a starting price of Rs 74,999. CEO Bhavish Aggarwal said the delivery of the Roadster Pro will begin by Diwali next year, while the Roadster X will be available from January 2025.

Raamdeo, however, is not writing off the incumbents of the two-wheeler business - Hero Moto and Bajaj Auto, and expects them to become strong players in the EV space at 'some point of time'. With so much focus on electric mobility, Raamdeo said if the transition from ICE to EVs is slow, one can expect the leading players to have the 'entire pie to them', as there is no new competition coming into ICE any more.

India's top two-wheeler player by market share - Hero Motocorp - has announced plans to start Brazil operations by early next year. The dispatch to Philippines have already begun in March 2024.

Bajaj Auto recently launched the world's first CNG-powered bike, claiming approximately 50 percent savings in terms of lower fuel expenses compared to similar-sized petrol motorcycles, and has more launches planned later this year.

On the whole, Raamdeo Agrawal said he remains bullish on the two-wheeler space, and sees sustained and buoyant demand. "As the bottom of the pyramid picks up, the demand for two-wheelers will pick up too. A lot of replacement demand will happen," he said.

The above average rainfall this year along with upcoming festive season is expected to drive the demand for two wheelers, SIAM has said.