'Buy' rating, 50% upside: Goldman Sachs bullish on Ola Electric
What's the story
Goldman Sachs, a leading global investment banking firm, has projected a significant growth trajectory for Ola Electric over the next three years.
The firm anticipates that Ola Electric's revenue will expand at a rate 2.5 times faster than its competitors in India's two-wheeler market.
This surge is expected to be fueled by the company's concentrated efforts on the rapidly growing electric two-wheeler segment.
Stock prediction
Goldman Sachs initiates coverage on Ola Electric
Goldman Sachs has also initiated coverage on Ola Electric, assigning it a 'buy' rating with a target price of ₹160 per share.
This projection represents a potential 50% increase from the current stock price of ₹110 per share.
The firm's analysis suggests that Ola Electric is set to outperform its market peers in terms of both revenue and volume growth rates.
Growth forecast
Ola Electric's projected annual growth outpaces competitors
Goldman Sachs predicts that Ola Electric's revenues will grow more than 40% annually from FY24 to FY27E.
This growth rate surpasses those of TVS Motor, Bajaj Auto, and Hero MotoCorp at +16%, +19%, and +10%, respectively.
The firm also forecasts a substantial annualized volume growth of +57% for Ola Electric during the same period, outpacing TVS, Bajaj, and Hero at +9%, +12%, and +6%, respectively.
Market leadership
Ola Electric's financial performance and market position
Despite reporting a net loss of ₹347 crore, an increase of approximately 30% year-on-year, Ola Electric's consolidated revenue from operations rose by 32% to ₹1,644 crore.
The company has managed to retain its market leadership due to its value-for-money proposition and lower running costs per kilometer.
As of August, Ola Electric held a substantial 31% market share with cumulative sales reaching 297,695 units over eight months.
Future plans
Ola Electric's product roadmap influences Goldman Sachs's rating
Goldman Sachs has identified Ola Electric's product roadmap as a key factor in its 'buy' rating.
The report highlights the planned rollout of Ola Electric's motorcycle portfolio starting from the March quarter of 2025.
Additionally, the company's entry into another new fast-growing market, electric three-wheelers in mid-CY25, is seen as a potential catalyst for further growth and investment appeal.