Ola Electric‘s share price has climbed down over 27% from its all-time high of ₹157.40. Analysts at Ambit Capital see further slide ahead for the electric vehicle (EV) major.

The Ola Electric Analyst: The analyst team at Ambit Capital initiated coverage on the stock with a “sell” rating and a target price of ₹99.6. The target reflects around 14% downside from the stock’s current market price fo around ₹115.

The Ola Electric Thesis: The brokerage said that Ola Electric is capitalising on the shift to EVs, aiming to capture a large portion of the domestic two-wheeler market, with the total addressable market and EBITDA pool estimated at ₹2.2 lakh crore and ₹24,000 crore, respectively, by FY29.

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Ambit expects electric two-wheeler penetration to increase from 5.7% in FY25 year-to-date to around 23.5% by FY29, fuelled by the launch of e-motorcycles from FY26.

However, competition is set to intensify as existing players expand their portfolios, and major brands like Honda and Suzuki enter the market with e-two wheeler models by Q4. As a result, Ambit predicts Ola Electric's market share to decline from 35% in FY24 to 27.5% by FY29, and further to 25% by FY31, as production-linked incentive (PLI) benefits expire.

Ola Electric's tech-focused business model sets it apart, with the company being the only electric two-wheeler player producing motors, battery management systems (BMS), and lithium-ion cells (from 1QFY26), and owning its sales network.

While this gives it a competitive edge and exclusive incentives, it also requires higher capital expenditure, the brokerage firm noted. Ola is expected to become EBITDA positive by FY27, but margins could be tight, with a projected 1.5% EBITDA margin by FY29 as the production-linked incentive benefits phase out.

Price Action: Ola Electric’s share price was down 1.08% to trade at ₹114.25 in early trade on Wednesday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.