Goldman Sachs and BofA Securities have reportedly started coverage on Ola Electric Mobility Ltd, assigning ‘Buy’ ratings and projecting up to a 50% potential increase in the stock’s value. This follows Ambit Capital’s recent coverage, which issued a ‘Sell’ recommendation, citing significant opportunities but warning that growing competition could reduce Ola’s market share.

Goldman Sachs has reportedly projected that Ola Electric will reach EBITDA breakeven by FY27, with an expected revenue growth of over 40% compounded annually from FY24 to FY30. The brokerage also anticipates Ola achieving a free cash flow breakeven by FY30, along with an 11.9% EBITDA margin and a 27% return on invested capital (ROIC) by that year.

Goldman Sachs believes the company is well-positioned to benefit from long-term structural trends in India’s electric two-wheeler market and has set a target price of Rs 160 for the stock, as reported by ET NOW. This implies a 49.53% upside from Monday’s closing price of Rs 107.

Meanwhile, BofA Securities has set a price target of Rs 145, citing Ola’s technological and cost leadership as key factors for success. Despite skepticism surrounding battery production, BofA believes it is a worthwhile bet, with a potential 36% upside over Monday’s closing price.

HSBC, which recently initiated coverage on Ola Electric with a ‘Buy’ rating, expressed concerns over the company’s recent market share decline. The brokerage suspects that the drop may be due to competitors launching more affordable variants. Despite maintaining its ‘Buy’ rating with a Rs 140 target price, HSBC warned of a potential 15-20% downside risk to volume estimates for FY25 and FY26 if this trend continues.

Ambit Capital, on the other hand, predicts that Ola Electric’s market share will decrease from 42.4% in FY25 to 25% by FY31, as new competitors like Honda and Suzuki enter the market and other electric two-wheeler manufacturers expand their product offerings and reach. Additionally, Ambit noted that Ola’s incentives could be fully utilized by then.

Ambit Capital highlighted several risks for Ola Electric, including potential changes in government policies, increased competition, and slim profitability in a capital-intensive business model. As a result, the brokerage initiated coverage with a ‘Sell’ rating and a target price of Rs 99.60.