Business News Desk – Two foreign brokerage firms have started covering the shares of electric vehicle company Ola Electric Mobility with a ‘buy’ rating. Due to this news, the company’s shares rose by 5% in early trade today on 17 September. Both BofA Securities and Goldman Sachs have expressed hope of great returns from Ola Electric shares. BofA Securities has given a target price of Rs 145 to Ola Electric shares, which indicates a possibility of an upside of about 35% from Monday’s closing price.
At the same time, Goldman Sachs has also advised to buy this stock and has given a target price of Rs 160, which can give investors a potential profit of up to 50%. Ola Electric shares have been seeing a decline for some time now. The stock is now trading 30% below its record high of Rs 157. In such a situation, these new price targets can once again increase the movement in the stock.
What BofA Securities says
According to BofA Securities, electric vehicles currently contribute 6.5% to India’s two-wheeler segment. Electric scooters are now priced lower than petrol scooters, which could prove to be a turning point for the EV market. He said Ola Electric has strengthened its hold in this segment and has handled key aspects such as product portfolio, funding access and brand distribution well. The brokerage expects EV penetration rate to reach 18% by 2028 and 25% by 2030.
What is Goldman Sachs’ opinion?
Goldman Sachs also believes that Ola Electric can gain a sustainable lead in India’s electric two-wheeler market in the long term. They have estimated that the company’s revenue could grow at a rate of 40% CAGR between FY 2024 and 2030, allowing the company to reach break-even on free cash flow levels even without subsidies by 2030.
Also, the company’s EBITDA margin can reach 11.9% and RoIC 27%. However, Ola Electric faces many potential challenges such as competition, future of in-house sales manufacturing and direct-to-consumer network. At around 10 am, shares of Ola Electric Mobility were trading 4.60 per cent higher at Rs 112.55 on NSE.
