Ola Electric’s market share has dwindled to 23% from a peak of 49% in the first quarter of FY25, HSBC said, highlighting concerns over the company’s medium- to long-term growth prospects.HSBC downgraded Ola Electric Mobility to a “hold” rating from “buy” on Wednesday, citing persistent volume disappointments and mounting competition in the electric two-wheeler space. The brokerage also slashed its target price for the stock to INR 70 from INR 100, implying a potential upside of just 2.5% from the current levels.
Ola Electric shares rose as much as 4.7% to INR 68.27 on the BSE on Wednesday, paring some of their recent losses. The stock has fallen 15% over the past three months and 13.44% in just the past week.
"Since the IPO, Ola Electric has consistently disappointed on volumes, largely led by quality and service issues," HSBC said in a note. While the company has addressed service issues and is set to launch an EV motorcycle soon, competition has been aggressive in catching up, the brokerage noted.
Ola Electric’s market share has dwindled to 23% from a peak of 49% in the first quarter of FY25, HSBC said, highlighting concerns over the company’s medium- to long-term growth prospects.
The downgrade comes despite Ola’s plans to expand its product lineup and improve customer experience. The company, which made its market debut in August last year with a flat listing at INR 75.99 on the BSE, has struggled to gain investor confidence amid volatile trading and operational challenges.
While the EV maker remains a key player in India’s growing electric mobility segment, analysts are wary of near-term headwinds, including intensifying competition from legacy automakers and startups.
Meanwhile, HSBC upgraded TVS Motor Company shares to 'buy' from an earlier 'hold' rating and the brokerage retained its 'buy' rating on Bajaj Auto. The brokerage noted that two-wheeler valuations now appear relatively attractive following the recent correction and expects limited earnings downside after EPS revisions in the December quarter.
HSBC said the two-wheeler industry growth has slowed in recent months but the brokerage still expects high-single-digit growth in FY26. Over the past decade, the sector’s CAGR has remained below 3%, trailing most other auto segments. Despite substantial government incentives, electrification has progressed at a sluggish pace, the brokerage noted, adding that on a positive note, rural demand is rebounding, and the export market is also showing signs of recovery.
