HSBC has changed its rating for Ola Electric Mobility. Originally, they had a “buy” rating, but now they think investors should “hold” their stocks. This change happened because Ola Electric has not been selling as many bikes as expected, and competition is increasing.
They also lowered their price target for Ola Electric shares from Rs 100 to Rs 70. This means they think the stock could go up just a little bit, by about 2.5%. On the day the news broke, Ola Electric shares rose by 4.7% to Rs 68.27, but the stock has dropped 15% over the last three months and nearly 13.44% in the past week.
HSBC pointed out that after the company had its initial public offering (IPO) last year, they have had trouble selling bikes, mainly because of issues with the quality and service of their products. They did mention that Ola Electric is fixing these service problems and plans to launch an electric motorcycle soon, but other companies are catching up fast.
Ola Electric’s share of the market has fallen from 49% in early FY25 to just 23% now. This makes analysts concerned about the company’s future growth. The downgrade in the rating happened even though Ola is trying to expand its product range and improve customer service. After their market debut in August last year, they have faced difficulties gaining investor trust.
In contrast, HSBC upgraded ratings for TVS Motor Company and kept its “buy” rating for Bajaj Auto. The company emphasized that, even though the growth in the two-wheeler market has slowed, they expect some recovery soon.
Despite the challenges, analysts are optimistic that demand in rural areas is picking up again, and the export market is also improving.
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