The relentless sell-off in Ola Electric Mobility shares continued unabated on Friday, December 5, with the stock tumbling another 4% to touch a historic low of ₹34.81 per share. This marks the sixth straight session of decline, resulting in a cumulative 15% drop over this period.
A Steep and Sustained Decline
The stock has faced severe downward pressure since reaching a one-year peak of ₹71.25 in September. From that high, it has now lost a staggering 51% of its value, representing one of the most significant sustained corrections since its market debut. While the stock managed a brief 31% recovery in August—its largest monthly gain on record—the rally proved fleeting. The shares concluded the last two months with double-digit losses, erasing those gains entirely.
Revised Guidance and Market Share Erosion
Investor confidence in the Bhavish Aggarwal-led company has been shaken following its decision to revise sales guidance downward, signaling a tough path forward. Intensifying competition in India's electric two-wheeler segment has been a key factor, causing Ola Electric to surrender significant market share after once being a dominant force in the space.
In response to weakening vehicle sales, the company is pivoting focus toward its Battery Energy Storage System (BESS) business. It recently launched 'Ola Shakti,' a storage solution designed for residential use capable of powering appliances like air conditioners, refrigerators, and induction cookers. Ola Electric anticipates its annual BESS capacity consumption will reach 5 GWh in the coming years. However, this strategic shift has so far failed to alleviate the pressure on its stock price.
Financial Performance and Analyst Outlook
Despite narrowing its net loss for the September quarter to ₹418 crore from ₹495 crore a year earlier, the company made deep cuts to its full-year sales and revenue projections, citing weaker-than-expected demand. Ola Electric now expects to sell around 100,000 vehicles in the second half of the fiscal year, bringing the full-year estimate to roughly 221,000 units. This is a dramatic reduction, over 40% below its earlier forecast of 325,000–375,000 units.
Second-quarter sales nearly halved to 52,666 units. Consequently, the full-year revenue guidance has been slashed to ₹3,000–3,200 crore, down from the previous forecast of ₹4,200–4,700 crore. Notably, while cutting sales targets, the company has maintained its core automotive margin guidance, emphasizing a focus on profitability over volume and banking on growth in energy storage to counter the vehicle sales slowdown.
Market analysts paint a cautious picture. Anshul Jain, Head of Research at Lakshmishree, noted, "Ola Electric has broken below a tight bearish flag on the daily chart, with rising volumes confirming the breakdown. The slip through the 40.5 level signals strong seller control." He indicates that immediate pattern targets are near ₹27, with a further extension toward ₹12 possible if selling intensifies. Jain cautions that any rebound attempts will likely face resistance until the stock reclaims the ₹40.5 zone.
The company's challenges are further highlighted by actions of major investors; SoftBank recently reduced its stake in Ola Electric by 2.15%, and now holds 15.7%.
