Shares of Ola Electric Mobility Ltd surged nearly 20% on Thursday, closing at Rs 36.34 on the BSE, as investors reacted to early signs of a demand recovery after months of sustained decline.
The stock is now up around 25% in April, marking a sharp reversal after six straight months of losses. The trigger has been a turnaround in March sales, which has helped shift sentiment.
“Ola Electric shares have risen sharply mainly because the market is reacting to the first visible sign that demand may be stabilizing after a long period of disappointment,” said Abhinav Tiwari, Research Analyst at Bonanza.
Vehicle registrations rose to about 10,117 units in March from 3,973 units in February, while daily orders reportedly crossed 1,000 units in the last week of the month.
“That gave the market confidence that demand had not collapsed permanently,” Tiwari said.
Despite the sharp rebound, analysts are not convinced the turnaround is fully in place.
“However, saying that the worst is fully over may still be too early,” Tiwari cautioned, pointing to the reasons behind the stock’s prolonged decline.
“Over the last six months, the stock corrected because investors were worried not only about weak volumes, but also about falling market share, heavy cash burn, widening losses and execution issues,” he said.
The financials continue to reflect those pressures. In Q3 FY26, the company reported revenue of about Rs 470 crore, while net loss widened to around Rs 487 crore.
“That shows profitability remains under pressure even if sales improve,” he added.
The recent recovery in volumes has also been supported by aggressive pricing.
“Recent price cuts can definitely help Ola push volumes in the near term and recover some lost market share, especially because the electric two-wheeler market remains highly price sensitive,” Tiwari said.
However, he warned that this comes with a trade-off.
“Lower pricing alone is not enough if margins remain weak, because aggressive discounting may improve volume but delay profitability,” he said.
Execution remains another key factor to watch.
“The bigger issue still remains operations, especially service quality. This has been the main reason customer confidence weakened earlier,” he noted, adding that improvements in service turnaround and parts availability are positive if sustained.
Given these uncertainties, Tiwari suggests a cautious approach for investors.
“It may be wiser to wait for another one or two months of consistent sales data before concluding that a recovery trend is firmly in place,” he said.
“If April and May also show stable volumes, improving market share and fewer service complaints, confidence can improve further.”
For now, the rally signals improving sentiment, but the underlying fundamentals still need to catch up. Whether this turns into a sustained recovery will depend on consistency in demand, execution on the ground and a clearer path to profitability.