Posted on March 21, 2025, by Niftynews
Ola Electric stock saw a significant surge of 9.46% on March 21, 2025, reaching a day high of ₹56.55. This increase followed a clarification from the company about the sales backlog in February. But with ongoing legal challenges, should investors consider buying Ola Electric stock for a short-term play?
Ola Electric Stock Price Boosted by Backlog Clarification
The surge in Ola Electric stock can be attributed to the company’s clarification regarding the temporary sales backlog. The company explained that the backlog was due to ongoing negotiations with vendors responsible for vehicle registrations. Ola Electric stated that the issue is being resolved quickly, with registrations now surpassing 50% of average daily sales.
The firm also mentioned that 40% of the February backlog had already been addressed, with the remainder expected to be resolved by the end of March 2025.
Ola Electric Stock Faces Legal Challenges: Insolvency Petition Filed
Despite the surge in Ola Electric stock, the company is also dealing with legal challenges, including an insolvency petition filed by Rosmerta Digital Services. The petition has been submitted to the National Company Law Tribunal (NCLT) in Bengaluru, alleging payment defaults.
Ola Electric has disputed these claims, stating that it is taking appropriate legal actions to protect its interests. While this issue may cause some uncertainty, it does not seem to have impacted Ola Electric stock significantly in the short term.
Is Ola Electric Stock a Good Buy for Short-Term Gains?
When it comes to buying Ola Electric stock for short-term gains, experts have mixed opinions. Here’s a breakdown of the analysis:
Short-Term Investment Opportunities in Ola Electric Stock
Some analysts recommend playing Ola Electric shares for a short-term bounce, especially given the recent price movement. Mitesh Panchal, a Sebi-registered analyst, suggests that Ola Electric stock could see limited upside in the next few months, with a potential high of ₹65.
For those considering a short-term play, Panchal advises setting a stop-loss at ₹48 to limit risk and protect gains if the stock moves higher in the near future.
Avoid Averaging Ola Electric Shares at Current Levels
For investors already holding Ola Electric shares at higher levels, such as ₹100 or more, experts recommend not averaging the stock. Instead, they suggest selling in a partial manner and using a trailing stop-loss to secure potential profits.
Investors looking for stable growth might want to consider diversifying into other EV stocks with stronger fundamentals and less volatility.
Long-Term Concerns: Financial Losses and Customer Dissatisfaction
Although Ola Electric stock has seen a recent uptick, there are long-term concerns about the company’s financial losses—the firm has reported a ₹1,500 crore-plus loss. Additionally, issues around customer dissatisfaction and governance concerns have raised doubts about the company’s ability to sustain long-term growth.
Gaurang Shah, Senior VP at Geojit Financial, advises investors to consider established EV players instead of betting on Ola Electric stock, given its ongoing challenges.
What’s Next for Ola Electric Stock?
Ola Electric, founded in 2017, focuses on manufacturing electric vehicles and essential components such as battery packs, motors, and vehicle frames. The company is actively addressing its internal issues and has received inquiries from several government bodies, including the Ministry of Road Transport and Highways (MORTH), showing its commitment to resolving the backlog.
As of December 2024, Ola Electric stock is still heavily held by its promoters, who own 36.78% of the company’s shares.
Conclusion: Is Ola Electric Shares a Short-Term Buy?
While Ola Electric shares has shown a significant rebound in recent days, short-term investors should exercise caution. The stock could offer a small bounce at current levels, but potential investors should set realistic expectations.
Given the legal issues, financial losses, and sales backlog, many experts recommend avoiding long-term investment in Ola Electric stock and instead focusing on more stable and established players in the electric vehicle market.
For those willing to take on some risk, a short-term investment could be considered with a clear exit strategy, but it’s important to monitor developments closely.
