Ola Electric Shares Dip 1% After Kotak Initiates Coverage With "Reduce" Call
- Kotak Securities initiated coverage on Ola Electric, rating it as a 'reduce' with concerns about market share loss due to growing competition.
- The firm faces escalating complaints regarding its products and after-sales service, which have reportedly surged to 80,000 per month.
- Despite these challenges, Kotak anticipates positive growth in the electric vehicle sector and expects Ola Electric to achieve a 30% revenue growth rate by FY28.
In India, Ola Electric experienced a 1% drop in share price following a coverage initiation by Kotak Securities, who recommended a 'reduce' action. Kotak expressed concerns over the company's declining market share, attributing this to heightened competition and a spike in product complaints, which reportedly reached 80,000 per month. These complaints have adversely affected the brand's reputation and have drawn criticism from customers and public figures alike. Despite these challenges, Kotak remains optimistic about Ola Electric's prospects, forecasting a 30% annual revenue growth from FY24 to FY28 and an increase in electric two-wheeler penetration in the Indian market. As of October 4, the company’s market capitalization had significantly decreased, resulting in a loss of around ₹7,000 crore in just a few trading sessions. The current state of Ola Electric’s stock reflects these troubles, though there is optimism regarding future growth within the electric vehicle sector in India.